Report On Global Remittances: World Bank

• 15 May 2021

Why in News

According to the latest edition of the World Bank’s Migration and Development Brief, despite Covid-19, remittance flows remained resilient in 2020, registering a smaller decline than previously projected.

Key Points

• Remittance Inflow of India:
  
  • India being at top, received over USD 83 billion in remittances in 2020, a drop of just 0.2 per cent from the previous year, despite a pandemic that devastated the world economy.
    
    • India’s remittances fell by just 0.2% in 2020, with much of the decline due to a 17% drop in remittances from the United Arab Emirates, which offset resilient flows from the United States and other host countries.
    • In 2019, India had received USD 83.3 billion in remittances.
• Global Remittances
  
  • China is second in terms of global remittances in 2020.
    
    • China received USD 59.5 billion in remittances in 2020.
  • India and China are followed by Mexico, the Philippines, Egypt, Pakistan , France and Bangladesh.
• Remittance outflow :
  
  • Remittance outflow was the maximum from the United States (USD 68 billion), followed by UAE, Saudi Arabia, Switzerland, Germany, and China.
• Reason for the Steady Flow of Remittances:
  
  • Fiscal stimulus that resulted in better-than-expected economic conditions in host countries.
  • Shift in flows from cash to digital and from informal to formal channels.
  • Cyclical movements in oil prices and currency exchange rates.

Remittance

• A remittance is money sent to another party, usually one in another country.
• The sender is typically an immigrant and the recipient a relative back home.
• Remittances represent one of the largest sources of income for people in low-income and developing nations. It often exceeds the amount of direct investment and official development assistance.
• Remittances help families afford food, healthcare, and basic needs.
• India is the world’s biggest recipient of remittances. Remittances bolsters India's foreign exchange reserves and helps fund its current account deficit.

World Bank

• About
  
  • The Bretton Woods Conference held in 1944, created the International Bank for Reconstruction and Development (IBRD) along with the International Monetary Fund (IMF).
    
    • The IBRD later became the World Bank.
  • The World Bank Group is a unique global partnership of five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries.
• Members:
  
  • It has 189 member countries.
  • India is also a member country.
• Major reports:
  
  • Ease of Doing Business.
  • Human Capital Index.
  • World Development Report.
• Its Five development institutions:
  
  • International Bank for Reconstruction and Development (IBRD): provides loans, credits, and grants.
  • International Development Association (IDA): provides low- or no-interest loans to low-income countries.
  • International Finance Corporation (IFC): provides investment, advice, and asset management to companies and governments.
  • Multilateral Guarantee Agency (MIGA): insures lenders and investors against political risk such as war.
  • International Centre for the Settlement of Investment Disputes (ICSID): settles investment-disputes between investors and countries.

World Bank’s Migration and Development Brief

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

Source: IE