Context: Recently, World Bank has released a report titled “Migration and Development Brief, 2020” which provides information regarding remittances received by various countries.

Key Highlights

Related to India

• India has received the highest amount of remittances in 2020. This was followed by China, Mexico, the Philippines, Egypt, Pakistan, France and Bangladesh.
• India’s Remittances: India has received over USD83 billion in remittances in 2020. This was despite the pandemic that devastated the world economy.
• In 2019, India had received USD83.3 billion in remittances.
• India’s remittances fell by just 0.2% in 2020. This was due to a 17% fall in remittances from the United Arab Emirates. However, this was offset by the resilient flows from the United States and other host countries.
• Remittances outflow from India in 2020 was USD7 billion. In 2019, it was around USD7.5 billion.

Global Scenario

• China received $59.5 billion in remittances in 2020 against $68.3 billion in 2019.
• The remittance outflow was maximum from the United States. This is followed by the UAE, Saudi Arabia, Switzerland, Germany and China.
• Remittance inflows have increased in Latin America, South Asia, Middle East and North Africa.
• However, remittances have fallen for East Asia and the Pacific, Europe, Central Asia and Sub-Saharan Africa.

About Migration and Development Brief Report

• The report is prepared by the Migration and Remittances Unit, Development Economics (DEC)- the premier research and data arm of the World Bank.
• The report aims to provide an update on key developments. Especially in the area of migration and remittance flows and related policies over the past six months.
• The report also provides medium-term projections of remittance flows to developing countries.
• The report is produced twice a year.

What are Remittances?

• Remittances are funds transferred from migrants to their home country.
• They are the private savings of workers and families that are spent in the home country for food, clothing and other expenditures, and which drive the home economy.

A typical remittance transaction takes place in three steps

• The migrant sender pays the remittance to the sending agent using cash, check, money order, credit card, debit card, or a debit instruction sent by e-mail, phone, or through the Internet.
• The sending agency instructs its agent in the recipient’s country to deliver the remittance.
• The paying agent makes the payment to the beneficiary.
• The remittance flows tend to be more stable than capital flows, and they tend to be countercyclical i.e. increasing during economic downturns or after a natural disaster when private capital flows tend to decrease.