Remittances by international migrants from the Caribbean and other developing countries are on course for strong growth this year, while at the same time forced migration due to violence and conflict has reached unprecedented levels, according to the World Bank’s latest issue of Migration and Development Brief.
The report, which was released in Washington, D.C. on Monday, recorded remittances to developing countries, stating that they are expected to reach US$435 billion this year, an increase of five percent over 2013.
The growth rate this year is substantially faster than the 3.4 percent growth recorded in 2013, driven largely by remittances to Asia and the region, the World Bank said.
It said remittances to developing countries will continue climbing in the medium term, reaching an estimated US$454 billion in 2015.
Global remittances, including those to high-income countries, are estimated at US$582 billion this year, rising to US$608 billion next year.
“Remittances remain an especially important and stable source of private inflows to developing countries, as they bring in large amounts of foreign currency that help sustain the balance of payments,” the report says.
It says that, in 2013, remittances were significantly higher than foreign direct investment (FDI) to developing countries and were three times larger than official development assistance.
“Remittances to developing countries grew this year by 5 percent,” said Kaushik Basu, senior vice president and chief economist of the World Bank Group.
“Remittance inflows provided stable cover for substantial parts of the import bill for such countries as Egypt, Pakistan, Haiti, Honduras, and Nepal. India and China lead the chart with projected remittance inflows of, respectively, US$71 and us$64 billion in 2014,” he added.
The brief notes that the global average cost of sending remittances continued its downward trend in the third quarter of 2014, falling to 7.9 percent of the value sent, compared to 8.9 percent a year earlier.
In a special analysis on forced migration, the brief notes that forced migration due to conflict is at its highest level since World War II, affecting more than 51 million people.
An additional 22 million people have been forced to move due to natural disasters, bringing the total affected by forced migration to at least 73 million, according to the latest available data.
“Despite the encouraging outlook for remittance flows, the circumstances of many migrants are troubling. With so many people on the move against their will and many others undertaking desperate and dangerous journeys, it is clear that more effort is needed to make migration safer and cheaper by exploring economically viable policy options,” said Dilip Ratha, Lead Economist, Migration and Remittances, at the World Bank’s Development Prospects Group and Head of the Global Knowledge Partnership on Migration and Development (KNOMAD).
Forced migration is typically viewed as a humanitarian issue but affects growth, employment and public spending for both origin and destination countries. The issue needs to be examined also through a development lens, says the brief.
The report says remittance flows to the Latin America and the Caribbean (LAC) region are “likely to bounce back this year, following a weak 2013.”
It says that remittances to the region are expected to increase by 5 percent this year, compared to 1 percent last year, to US$64 billion, rising to US$67 billion in 2015.