Publication: Outlook for Remittance Flows 2010-11 : Remittance Flows to Developing Countries Remained Resilient in 2009, Expected to Recover During 2010-11
Date
2010-04
ISSN
Published
2010-04
Author(s)
Abstract
Officially recorded remittance flows to
developing countries reached $316 billion in 2009, down 6
percent from $336 billion in 2008. With improved prospects
for the global economy, remittance flows to developing
countries are expected to increase by 6.2 percent in 2010
and 7.1 percent in 2011, a faster pace of recovery in 2010
than our earlier forecasts. The decline in remittance flows
to Latin America that began with the onset of financial
crisis in the United States appears to have bottomed out
since the last quarter of 2009. Remittance flows to South
Asia (and to a smaller extent East Asia) continued to grow
in 2009 although at markedly slower pace than in the
pre-crisis years. Flows to Europe and Central Asia and
Middle-East and North Africa fell more than expected in
2009. These regional trends reveal that: (a) the more
diverse the migration destinations, the more resilient are
remittances; (b) the lower the barriers to labor mobility,
the stronger the link between remittances and economic
cycles in that corridor; and (c) exchange rate movements
produce valuation effects, but they also influence the
consumption-investment motive for remittances. The
resilience of remittances during the financial crisis has
highlighted their importance in countries facing external
financing gaps. Remittances are now being factored into
sovereign ratings in middle-income countries and debt
sustainability analysis in low-income countries. Countries
are also becoming increasingly aware of the income and
wealth of overseas diaspora as potential sources of capital.
Some countries are showing interest in financial instruments
such as diaspora bonds and securitization of future
remittances to raise international capital.
Citation
“Ratha, Dilip; Mohapatra, Sanket; Silwal, Ani. 2010. Outlook for Remittance Flows 2010-11 : Remittance Flows to Developing Countries Remained Resilient in 2009, Expected to Recover During 2010-11. Migration and Development Brief; No. 12. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/e4c8ab6b-eae7-519f-a591-c3cb7cc0a15d License: CC BY 3.0 IGO.”