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Sunday, 12 December 2010

Remittances update

Officially recorded remittance flows to developing countries are estimated to increase by 6 percent to $325 billion in 2010. This marks a healthy recovery from a 5.5 percent decline registered in 2009. Remittance flows are expected to increase by 6.2 percent in 2011 and 8.1 percent in 2012, to reach $374 billion by 2012.

It should be noted that the World Bank’s definition of developing countries has changed. As an example Poland, which is estimated to have received $9.1 billion in 2010, is no longer classified as a developing country.

This outlook for remittance flows, however, is subject to the risks of a fragile global economic recovery, volatile currency and commodity price movements, and rising anti-immigration sentiment in many destination countries.

From a medium-term view, three major trends are apparent:

  • a high level of unemployment in the migrant-receiving countries has prompted restrictions on new immigration; 
  • the application of mobile phone technology for domestic remittances has failed to spread to cross-border remittances; and 
  • developing countries are becoming more aware of the potential for leveraging remittances and diaspora wealth for raising development finance.