Why India remains top of remittances league

 
Pakistani and Indian employees of subcontracters working for British oil giant BP in Algeria listen to a man giving informations as they wait for their flight back to Dubai at the Palma de Mallorca airport on January 18, 2013. South Asian migrant workers are sending home more money than ever before

Indians working abroad continue to send more money home than their counterparts from other countries.

In 2012, India topped the list with $70bn (£47bn) of remittance inflows, followed by China ($66bn), the Philippines and Mexico ($24bn each), Nigeria ($21bn), according to the latest World Bank figures on migration and remittances.

Nothing surprising about that: India has been the top recipient of remittances in the world for 15 of the past 23 years and the past five years in a row.

I asked Dilip Ratha, economist and manager of the World Bank's migrations and remittances unit, how migrant Indian workers continued to send so much money home despite the global slowdown.

What he said gave me an interesting insight into the resilience of migrant workers.

Mr Ratha said the global financial crisis actually resulted in a small and brief decline in remittance flows to India in 2009.

The crisis, he says, seems to have affected new migration flows from India. But most of the existing workers stayed put and stuck it out.

They cut consumption, saved on rent and continued to send money home. A large number of Indians working in the construction sector in Gulf countries, for example, moved to retail trade and building maintenance after the downturn there.

The depreciation of the rupee against the US dollar in 2008 and 2009, and in late 2011 also helped, Dr Ratha explained.

This resulted in a fall in the dollar prices of Indian goods, services and assets like housing, bank deposits and stocks - making them more attractive to migrants and encouraging remittances.

"Although migrant workers are to a large extent adversely affected by the slow growth in the global economy, remittance volumes have remained remarkably resilient, providing a vital lifeline to not only poor families but a steady and reliable source of foreign currency in many poor remittances recipient countries," agrees Hans Timmer, director of the bank's Development Prospects Group.

Overall migrant workers are sending more money home than ever.

Worldwide remittance inflows, according to the World Bank, are expected to touch $534bn in 2012 and grow to $685bn in 2015. Remittance flows to developing countries are now actually more than three times that of official development assistance.

More than 200 million people live and work outside their countries, according to the United Nations. Indian migrant workers, like many of their counterparts from developing countries, must be some of the most resilient around.

 
Soutik Biswas Article written by Soutik Biswas Soutik Biswas Delhi correspondent

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  • rate this
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    Comment number 57.

    Some of the large value foreign remittances are nothing but crime, 'hawala'.

    "US Justice dept asked permission to force London-based bank, HSBC to turn over the names of wealthy Indian-American (NRI) clients suspected of evading taxes through offshore accounts at the bank’s affiliate in India"- http://www.deccanherald.com/content/152657/us-tax-authority-seeks-names.html.

  • rate this
    +1

    Comment number 56.

    Agree with the conclusion of another analysis article on Indian migrant labour capital flows on http://b24.in/201302107/india-migrant-remittance-statistics/ - as the world moves towards more of a knowledge economy, foreign remittances might decrease but only because Indians will be able to earn dollars by working at home.

  • rate this
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    Comment number 55.

    Many foreign remittance (private or through NGOs) are destroying socio-religious harmony in many places, mainly in rural India.

    In last few decades I can see many sprawling palaces, palaces of worship are built in a otherwise poor area. Such 'development' hardly benefit local community but used to spread 'holy thou' attitude and corruption, sometimes even religious hatred.

  • rate this
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    Comment number 54.

    14.nicky - You say people spend on drugs/ alcohol and women abroad-how many? Foreigners pay for charity to other countries,PSUNAMI etc, isn't THAT saving and SACRIFICE for humanitarian grounds? Don't be a cat with eyes closed.Are you totally blind to crime in India public RAPE/ CORRUPTED POLITICS AND LAW, 498a and woman protection rights ABUSE, torture and pressure relatives abroad for money?

  • rate this
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    Comment number 53.

    17. ConnorMacLeod - I concur 100% with your reply.
    14.nicky - I am an Indian too. Remember Indian culture is valuable DOES NOT mean all Indians are valuable and are right.
    For starters, first learn to credit and respect the West too, on whose land these immigrant Indians are able to make more money which is not possible in homeland India even if they save n sacrifice there.

 

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