Migration and Development Brief Report of World Bank: Key Facts
On October 30, 2020, the World Bank released the migration and development brief report. According to the report the remittances of India will fall by 9% by the end of 2020. India’s remittances will drop down to 76 billion USD due to covid-19 crisis and the Global economic recession .
The report says that the top five countries that will receive lowest foreign remittances will be India, China, Mexico, Philippines and Egypt. The amount of money the migrant workers sending home is expected to reduce by 14% in 2021 as compared to that of 2019.
Remittance flows to the low income and middle income countries are predicted to fall by 7% in 2020. This will be around 508 billion USD. Further remittance is to decline by 7.5% in in 2021. This has been predicted as 470 billion USD.
Factors affecting the declining remittances
The major factors that are driving the reduction in remittances are weak oil prices and depreciation of currencies as against the US dollars.
Region wise predictions
The major decline is to be found in regions such as Central Asia and Europe. This will be followed by East Asia and Pacific, Middle East and North Africa, sub Saharan Africa, South Asia and Latin America and the Caribbean. Remittances of South Asia is to decline by 4% in 2020.
Pakistan and Bangladesh
In South Asia, the Global economic slowdown impact on remittances of these countries was minimal. This is mainly because of the diversion of remittances from informal to formal channels as people in these countries faced difficulties in carrying money by hand due to travel restrictions. Pakistan on the other hand introduced tax incentives and withholding of taxes was exempted from July 2020.Remittances of Bangladesh increased after the July 2020 floods.
Remittances in India
According to the World bank report, in 2019 India received 83.1 billion USD remittances.