India highest recipient of remittances at $69 billion

• India retained the top position as recipient of remittances with its diaspora sending about USD 69 billion back home last year according to the World Bank.

• Remittances to India picked up sharply by 9.9 percent, reversing the previous year’s dip, but were still short of USD 70.4 billion received in 2014.

• India continued to top in terms of receiving remittance and was followed by China (USD 64 billion), the Philippines (USD 33 billion), Mexico (USD 31 billion), Nigeria (USD 22 billion), and Egypt (USD 20 billion).

• The upsurge is likely to continue into 2018 on the back of stronger economic conditions in advanced economies (particularly the US) and an increase in oil prices that should have a positive impact on the GCC countries.

=> Global Scenario

• In its latest Migration and Development Brief, the World Bank estimated that officially recorded remittances to low-and-middle-income countries reached USD 466 billion in 2017.

• This was an increase of 8.5 percent over USD 429 billion in 2016.

• Global remittances, which include flows to high-income countries, grew 7 percent to USD 613 billion last year, from USD 573 billion in 2016, the bank said.

• Remittances are expected to continue to increase in 2018, by 4.1 percent to reach USD 485 billion. Global remittances are expected to grow 4.6 percent to USD 642 billion in 2018.

=> Neighbour countries

• Flows to Pakistan and Bangladesh were both largely flat in 2017, while Sri Lanka saw a small decline (-0.9 percent). In 2018, remittances to the region will likely grow modestly by 2.5 percent to USD 120 billion.

• Pakistan received USD 20 billion in remittances, whereas Bangladesh received USD 13 billion.

=> Reasons

• Major barriers to reducing remittance costs are de-risking by banks and exclusive partnerships between national post office systems and money transfer operators. These factors constrain the introduction of more efficient technologies such as internet and smartphone apps and the use of cryptocurrency and blockchain-in remittance services.

=> About Remittance

• A remittance is a transfer of money by a foreign worker to an individual in his or her home country.

• Money sent home by migrants competes with international aid as one of the largest financial inflows to developing countries.

• Workers’ remittances are a significant part of international capital flows, especially with regard to labour-exporting countries

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