We released the new Migration and Development Brief earlier today. Remittances to developing countries are estimated at $404 billion in 2013, up 3.5 percent compared with 2012. Growth in remittance flows to developing countries is expected to accelerate to an annual average of 8.4 percent over the next three years, raising flows to $436 billion in 2014 and $516 billion in 2016.
The main messages of the Migration and Development Brief 22 are as follows:
Rising anti-immigrant sentiment in many developed destination countries, as evident from deportation of migrants, is a growing concern. Saudi Arabia deported more than 370 thousand migrants in the 5 months since November 2013, many of whom come from Ethiopia, Egypt and Yemen. In the US, over 368 thousand people were deported in 2013 (mostly migrants seeking entry into the US and apprehended at the border), with Mexico and Central American countries the main places of origin.
The average total cost of sending remittances fell in the first quarter of 2014, dipping below 8.4 percent (simple average of country-specific corridors), compared with over 9.0 percent a year earlier. The dollar-value weighted average dropped a full percentage point to 5.9 percent at the end of 2013, from 6.9 percent the previous year, confirming the importance of remittance volume and competition to maintaining downward pressure on fees. The average cost of remittances to Sub-Saharan Africa has remained stubbornly high around 12 percent. Also South-South remittances are either not permitted or very costly due to outward capital controls in many developing countries.
Efforts are underway to mobilize diaspora savings for development purposes, including through diaspora bonds. Migrants living in high-income countries hold savings in excess of $500 billion, and several countries, such as Nigeria, are readying diaspora bonds to tap into this large pool of funds.
With nearly 1 out of 7 persons in the world being either an international or an internal migrant, there is a growing awareness of the importance of migration in the post-2015 development agenda, especially the need for reducing migration costs (such as recruitment costs) and improving migrant rights. In addition, diaspora remittances and savings can be leveraged to boost financing for development. The UN High-Level Dialogue on migration and development concluded successfully in October 2013, with unanimous support for a declaration of an 8-point action plan.
- The closure of bank accounts of money transfer operators serving Somalia and other fragile countries is a matter of concern. Remittances provide a lifeline to ‘fragile and conflict-affected’ countries where they are more than 5 times larger than foreign aid, FDI and other sources of international currency. Anti-money laundering and countering the financing of terror (AML/CFT) regulations have to be carefully balanced with the development objective of helping the poor.
To read the press release click here. To view related infographic, click here.