Remittances and the Top 10 countries that rely on them most

At the end of 2015, the total number of international migrants is estimated to have exceeded 250 million. That’s just over 3.4 percent of the world population.

Climate change, internal conflict, and natural disaster are a few of the reasons for this increase in migration. However, for most, the opportunity to work abroad, combined with the chance to support their loved ones by sending a monthly remittance to their country of origin, is what drives their relocation.

Last year, international migrant workers sent $601 billion in remittances to countries across the world. Of this global figure, an estimated $451 billion flowed to developing countries. This figure represents 75 percent of the total global volume remitted or three times more than the amount of Official Development Aid.

These figures can also be found in the Advance Edition of the World Bank’s 2016 edition of the Migration and Remittances Factbook which was released in December 2015, on International Migrants Day.

 

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A customer and Teller from a Ria Store. For many customers, sending remittances is more than just a transaction, it’s a personal experience. 

 

In this press release, Dilip Ratha, co-author of the Factbook summarised the importance of these flows: “At more than three times the size of development aid, international migrants’ remittances provide a lifeline for millions of households in developing countries. In addition, migrants hold more than $500 billion in annual savings. Together, remittances and migrant savings offer a substantial source of financing for development projects that can improve lives and livelihoods in developing countries.” 

A World Bank Migration and Development Brief, released in October 2015, confirms the increase in remittances to developing nations. It forecasts that by the end of 2017, the relative increase in migration will mean that developing countries will see an estimated $471 billion in remittances while $493 billion has been forecast for 2018. When remittance flows to higher-income countries are also considered, the latter figure climbs to $665 billion.

Where does the money flow?

In 2014, as well as being the top international migrant worker destination, the United States was also the largest source of remittance outflows sending an estimated $56 billion. This was followed by Saudia Arabia at $37 billion and Russia, with $33 billion. Other countries which featured as strong remittance sources include the United Kingdom, Germany, and the UAE, where 88% of the population are international migrants.

India retained its spot as the primary recipient of migrant remittances of the top 10 countries, with an estimated $72 billion flowing to the world’s fastest growing economy in 2015. China remained at number two, receiving $64 billion while the Philippines received $30 billion in 2015.

For many developing nations on the receiving end, these remittances support millions of people to exit poverty. In Tajikistan, their reliance on remittances places them in the first position, with remittances accounting for 41.7 percent of GDP.

For developing countries like Nepal, where remittances are responsible for almost 30 percent of their GDP, these person to person transfers will continue to be a lifeline. Following the earthquakes in 2015, money transfers from friends and family abroad are believed to have played a key role in the recovery of many families.

Top 10 Countries Most Reliant on Remittances

Rank Country Remittance Inflows
as a % of GDP in 2014
1 Tajikistan 41.7
2 Kyrgyz Republic 30.3
3 Nepal 29.2
4 Tonga 27.9
5 Moldova 26.2
6 Liberia 24.6
7 Bermuda 23.1
8 Haiti 22.7
9 Comoros 20.2
10 The Gambia 20.0
Source: Migration and Remittances Factbook 2016, page 30

 

Every month, millions of people worldwide choose Ria to securely transfer their dollars with care. We recognise that remittances play a crucial role in the lives of many and are grateful our customers trust us to ensure these are delivered safely and quickly.

We’re proud to be in a business which helps provide those living in developing nations with opportunities. That’s why we will always offer high-quality, affordable, money transfer services to all of our customers, so they can continue to improve the lives of their loved ones back home.