India on track for record $100bn in remittances: World Bank
Retaining its spot as the world's top recipient of remittances, migrant workers from India are set to send home a record $100 billion in 2022, despite global headwinds like rising prices.
In its latest Migration and Development Brief, the World Bank said remittance flows to India will rise 12 per cent, putting its inflows ahead of China, Mexico and the Philippines.
"Growth in remittance flows is estimated at 9.3 per cent for Latin America and the Caribbean, 3.5 per cent in South Asia, 2.5 per cent in the Middle East and North Africa, and 0.7 per cent in East Asia and the Pacific. In 2022, for the first time a single country, India, is on track to receive more than $100 billion in yearly remittances," the World Bank said in a statement.
Not just in India, remittances to South Asia grew an estimated 3.5 per cent to $163 billion in 2022. However, there is a large disparity across countries, from India's projected 12 per cent gain to Nepal's 4 per cent increase, to an aggregate decline of 10 per cent for the region's remaining countries.
According to World Bank, the easing of flows reflects the discontinuation of special incentives some governments had introduced to attract flows during the pandemic, as well as preferences for informal channels offering better exchange rates.
Remittances to India were enhanced by wage hikes and a strong labour market in the United States and other Organisation for Economic Co-operation and Development (OECD) countries, it added.
Remittances are a vital source of household income for low- and middle-income countries (LMICs). They alleviate poverty, improve nutritional outcomes, and are associated with increased birth weight and higher school enrolment rates for children in disadvantaged households.
According to World Bank, studies show that remittances help recipient households to build resilience, for example through financing better housing and to cope with the losses in the aftermath of disasters.
Remittance flows to developing regions were shaped by several factors in 2022. A reopening of host economies as the Covid-19 pandemic receded supported migrants' employment and their ability to continue helping their families back home.
In a special feature on climate-driven migration, the Brief notes that rising pressures from climate change will both drive increases in migration within countries and impair livelihoods. The poorest are likely to be most affected as they often lack the resources necessary to adapt or move.
"People throughout history have responded to deteriorating climates by moving to survive. Planning for safe and regular migration as a part of adaptation strategies will be required for managing displacement in the affected regions as well as the influx of people in the receiving communities," said Dilip Ratha, lead author of the Brief and head of the Global Knowledge Partnership on Migration and Development (KNOMAD).
"National and regional development strategies should be viewed through a climate migration lens," he added.