Global Remittances’ Rearguard Routing
The World Bank’s developing country remittance tally was $400 billion last year and medium-term 8 percent annual growth is a “strong outlook” despite immigrant and money transfer crackdowns, according to a spring meeting briefing. The flows’ balance of payments importance lagging only FDI is illustrated by comparisons to main export earners as they outstrip India’s IT and Egypt’s Suez Canal revenue, and are big chunks of Bangladesh’s textile and Nigeria’s oil sales. India and China were the biggest absolute recipients followed by Mexico and the Philippines, while as a fraction of GDP workers from Tajikistan and the Kyrgyz Republic in Russia led the pack. All regions with the exception of Latin America and North Africa experienced a 2013 increase, and Asia got $150 billion on both low and high-skilled employee migration. Europe-Central Asia after a $45 billion result faces post-Crimea “uncertainty” over ruble depreciation, the survey cautions. Economic weakness in Europe and US deportations cut lines to Mexico and Peru and in the Gulf Saudi Arabia expelled 350,000 nationals from the Middle East and South Asia. In Sub-Sahara Africa Nigeria took two-thirds the $30 billion total as the continent’s official aid continues to outstrip it. Weighted average cost was 8.5 percent of the sum sent and additional fees also apply which compromise the G-20 goal of 5 percent expense. Africa’s burden was double Latin America’s and competition has been limited by anti-terror and money laundering controls that have closed operators in conflict zones like Somalia. Nigeria and Trinidad and Tobago are issuing diaspora bonds to direct savings into formal capital markets with the global pool available estimated at half a trillion dollars. US securities registration has been an obstacle and past efforts in Ethiopia, Kenya, Nepal and the Philippines have foundered on government mistrust. South-South remittances have picked up and intra-African corridors should be helped by new cross-border payment systems. European popular sentiment has swung toward anti-immigrant parties in Austria, France, the Netherlands and elsewhere at the same time asylum applications have jumped particularly after Syria’s strife.
The crisis there has been “staggering” and displaced one million refugees into Lebanon alone as international organizations look for secure remittance means. Morocco has become a transit hub and Tunisia and the EU recently forged a Mobility Partnership to facilitate legal movement. Egypt as the Arab Spring country with the biggest inflows saw a 10 percent drop last year as hundreds of thousands of citizens left Saudi Arabia. Nepal, Pakistan and Sri Lanka were also forced to accept returnees, and initiatives are underway to encourage banks to lower charges in response. US and UK legislation has resulted in the severing of correspondent links with money service businesses in Somalia that have diverted relationships through Kenya, with its advanced mobile platform, and Dubai as a world offshore center. South Africa has also come under pressure for ties with sanctioned Zimbabwe institutions stretching the extraterritorial remit, experts added.
