Asia receives $114bn remittances in 2006
RAWALPINDI, Oct 18: Asia was the top destination of remittances, receiving more than $114 billion in 2006, while Pakistan remained at position No. 3 among Asian countries with $6,242 million or 4.8 per cent of the GDP, according to a study released on Wednesday by the International Fund for Agricultural Development (IFAD) and the Inter-American Development Bank (IDB).
India and China are the top recipients, receiving $24.5 billion and $21 billion dollars, respectively. Transfers make up 23 per cent of regional per capita income. On average, remittances in Asia are two per cent of GDP and 15 per cent of exports.
The flow of remittances into rural areas in Asia is among the highest. This is partly because half of Asian countries are 65 per cent rural. The impact of remittances among Asian developing countries is greater than in other parts of the world: in Asian countries 65 per cent or more rural, the ratio of remittances per capita to per capita GDP is 23 per cent and the highest in the world.
There are over 50 million migrants from Asia and the Pacific worldwide. Their main destinations are the United States, the Russian Federation and, in the case of the Pacific, New Zealand. Emerging destination countries from India – the region’s main exporter of migrants, with 22 per cent of total migrant – include Malaysia and the Arab oil exporting countries. There is also a significant intra-regional migration to Australia, China (Hong Kong), Japan and Singapore, while Central Asian migrants go predominantly to the Russian Federation and Kazakhstan. Migrants working in industrialised countries sent more than $300 billion to developing nations in 2006.
“This figure, according to the study is a conservative estimate, and shows that the seemingly small sums sent home by migrant workers when added together dwarf official development assistance,” said Kevin Cleaver, IFAD’s Assistant President. Remittances, the portion of migrant workers’ earnings sent back home to their families, have been a critical means of financial support for generations. But, for the most part, these flows have historically been “hidden in plain view”, often uncounted and even ignored. All that is now changing – as the scale of migration increases, the corresponding growth in remittances is gaining widespread attention, the study says.
Today, the impact of remittances is recognised in all developing regions of the world, constituting an important flow of foreign currency to most countries and directly reaching millions of households, totaling approximately 10 per cent of the world’s population. The importance of remittances to poverty alleviation is obvious, but the potential multiplier effect on economic growth and investment is also significant, says the study.
The driving force behind this phenomenon is an estimated 150 million migrants worldwide who sent more than $300 billion to their families in developing countries during 2006, typically 100 dollars, 200 dollars or 300 dollars at a time, through more than 1.5 billion separate financial transactions.
These funds are used primarily to meet immediate family needs (consumption) but a significant portion is also available for savings, credit mobilisation and other forms of investment.
In other words, the world’s largest poverty alleviation programme could also become an effective grass roots economic development programme, particularly in the rural areas that present some of the greatest challenges to financial inclusion.
The IFAD study was carried out in collaboration with the IDB, which based its figures on official data from governments, banks, and money transfer operators as well as on estimates of informal flows, such as money carried home.
IFAD, a specialized United Nations agency dedicated to fighting poverty and hunger in rural areas in developing countries, underscored the finding that more than one third of these remittances flow to families in rural areas, where poverty tends to be worse than in cities.
Asia receives $114bn remittances in 2006 -DAWN - Business; October 19, 2007