India tops the list, says World Bank report.
By Deepak Chitnis
WASHINGTON, DC: A World Bank report estimates that India will receive somewhere around $71 billion worth of remittances by the end of 2013, the most by any country in the world.
Coming in second place is China, which will receive around $60 billion. Together, the two countries’ total ($131 billion) is roughly one-third of the total amount of remittances sent to all developing countries in 2013.
India’s remittance total for this year is especially noteworthy when considering the fact that it nearly triples the amount of Foreign Direct Investment (FDI) the country received in 2012.
India’s 2013 estimate is an increase from last year’s number, which was $69 billion, indicating growth of almost 3%. The annual growth rate for developing countries as a whole is expected to be around 9%, which puts total remittances for developing countries through 2016 at close to $540 billion. In terms of all countries put together, total remittances by 2013 could be as high as $707 billion, which be a record-setting amount.
In terms of 2013 specifically, the growth rate for developing countries is expected to be just over 6% and total $414 billion, while the overall sum for all countries will be around $550 billion.
Some developing countries rely on remittances as a major portion of their Gross Domestic Product (GDP) each year. The World Bank report estimates that remittances sent to Tajikistan will comprise an astonishing 48% of its 2013 GDP.
Remittances have increased internationally except in Latin America, which has been affected by the state of the US economy and has therefore seen less money being sent to its nations. Despite the setback, however, Mexico is still estimated to receive $22 billion this year via remittances.
The World Bank report also states that the cost of sending money averages to about 9% of the value of each transaction, and urges governments to find a way to decrease fees so that remittances can increase even more.
Remittances to other south Asian countries — Pakistan, Bangladesh, Sri Lanka, Nepal — have also increased. Nepal in particular benefits greatly from remittances, as 25% of its GDP comes from such transactions. Pakistan has also instituted incentives to increase remittances coming into the country.
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