Singapore, December 5, 2018 (ANI): Last week’s World Bank report revealed that India’s migrant workers are bringing in USD100 billion worth of remittances. This is a record year. The country is expected to remain the top recipient of remittances, with a 7.5% increase in remittances in 2021 compared to a year ago. These remittances account for almost 3 percent of India’s GDP. They grew by 3.5 percent to USD163 billion at a regional level in 2022. There is a wide range of countries affected by this disparity. There is a wide range of countries affected by this disparity. Remittances to India are expected to rise 12 percent, while those to Nepal will grow 4%. The remaining countries, including Sri Lanka, Pakistan, and Bangladesh, will see an overall decline of around 10%. This is due to the withdrawal of some special incentives that governments introduced during the pandemic. The year 2022 marks the beginning of several long-term and short-term trends that have been obscured by the pandemic and were instrumental in stimulating remittance flow to India. Firstly, it was noticed that Indian migrants’ main destinations changed from low-skilled, informal jobs in the Gulf Cooperation Council countries (GCC), to a dominant part of high-income countries like the United States and the United Kingdom, as well as countries in Asia-Pacific such Singapore, Australia, Japan, New Zealand, and New Zealand. The share of remittances coming from the United States, United Kingdom and Singapore increased from 26% to 36% between 2016-17 and 2020-21. While the share from the five GCC countries (Saudi Arabian Gulf Cooperation Council, Kuwait, Oman and Qatar) dropped from 54% to 28%, the United States was the top source country for remittances in 2020-21 with a share of 23%. Around 20% of Indian emigrants live in the United States or the United Kingdom. The US Census shows that 43% of Indian-born Americans in America have a degree. This compares to just 13% of US-born citizens.
A structural shift in qualifications has led to a rapid increase in remittances linked to high-salaried jobs in services, particularly. Large fiscal stimulus packages were available to Indian migrants who worked in high-income countries during the pandemic. Wage hikes and record-high employment conditions helped remittance growth despite high inflation. Secondly, India was also benefited by the economic conditions in GCC (30 percent of India’s remittances). Most of the GCC’s Indian migrants come from blue-collar workers, who returned to India during the pandemic. In 2022, more migrants were able to return to work due to vaccinations and the resumption or travel. GCC’s price support policies inflated inflation in 2022. Higher oil prices and increased demand for labour allowed Indian migrants to resume work in 2022 than in 2021. In 2022, several factors influenced remittance flows to developing countries. Many migrants saw the need to support their families at home as a reason for their increased income and improved employment. However, rising prices negatively impacted migrants’ real incomes, and remittances. As GDP growth slows in high-income nations, this could lead to a decrease in remittances. There are still significant downside risks, such as a worsening of the conflict in Ukraine, volatile oil prices, currency exchange rates and a deeper than expected downturn in high-income countries. Remittance flows from South Asia are expected to slow down to 0.7% in the second quarter 2022. This is twice the Sustainable Development Goal (SDG), target of 3%. The World Bank’s Remittance Price Worldwide Database shows that the average global cost to send USD200 was 6% in the second quarter 2022. This is not much different than the previous year. The cost of sending USD200 to developing countries was the lowest in South Asia at 4.1%, and Sub-Saharan Africa at 7.8%. This is not much different from the previous year.
“Migrants are a great way to help ease tight labour markets in their host countries and support their families with remittances. Workers have been able to weather the uncertainty in their incomes and work opportunities created by the COVID-19 pandemic. These policies have global remittances and should be maintained,” Michal Rutkowski is the World Bank Global Director for Social Protection and Jobs. (ANI)