Remittances, inward: India
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2015: India, largest remittance recipient
The Times of India, April 14, 2016
India world’s largest remittance recipient in 2015: World Bank
India was the world's largest remittance recipient in 2015 despite experiencing a $1 billion drop from 2014, the first decline in its remittances since 2009, the World Bank said.
India retained its top spot in 2015, attracting about $69 billion in remittances, down from $70 billion in 2014, the World Bank said in its annual report "Migration and Development Brief".
Other large remittance recipients in 2015 were China, with $64 billion, the Philippines ($28 billion), Mexico ($25 billion) and Nigeria ($21 billion). "Remittances to India, the (South Asian) region's largest economy and the world's largest remittance recipient, decreased by 2.1 per cent in 2015, to $68.9 billion. This marks the first decline in remittances since 2009," the World Bank report said.
Officially recorded remittances to developing countries amounted to $431.6 billion in 2015, an increase of 0.4 per cent over $430 billion in 2014. The growth pace in 2015 was the slowest since the global financial crisis, the report said.
Global remittances, which include those to high-income countries, contracted by 1.7 per cent to $581.6 billion in 2015, from $592 billion in 2014, the World Bank said.
"Remittances are an important and fairly stable source of income for millions of families and of foreign exchange to many developing countries," said Augusto Lopez-Claros, Director of the World Bank's Global Indicators Group. "However, if remittances continue to slow, and dramatically as in the case of Central Asian countries, poor families in many parts of the world would face serious challenges including nutrition, access to health care and education," Lopez-Claros said. According to the report, the growth of remittances in 2015 slowed from eight per cent in 2014 to 2.5 per cent for Bangladesh, from 16.7 per cent to 12.8 per cent for Pakistan, and from 9.6 per cent to 0.5 per cent for Sri Lanka.
"Slower growth may reflect the impact of falling oil prices on remittances from GCC countries," the report said. For example, in the fourth quarter of 2015, year-on-year growth of remittances to Pakistan from Saudi Arabia and the UAE were 11.7 per cent and 11.6 per cent, respectively, a significant deceleration from 17.5 per cent and 42.0 per cent in the first quarter, the report explained.
Also, deprecation of major sending country currencies (for example, the euro, the Canadian dollar and the Australian dollar) vis-a-vis the US dollar may be playing a role, it noted.
Remittances to Nepal rose dramatically in response to the earthquake, by 20.9 per cent in 2015 versus 3.2 per cent in 2014.
Impact on Kerala
2016: Gulf remittances
The Times of India, May 06 2016
Subodh Varma
The simmering crisis in the Gulf region, an impact of plummeting oil prices and global economic woes, is sending ripples across the seas to pollbound Kerala. There are over 2.4 million Keralites working abroad of which 85% work in the Gulf region, according to the Kerala Migration Study (KMS 2014) by Centre for Development Studies, Thiruvananthapuram. That's over 2 million emigrant workers.
The remittances sent home by this huge workforce is estimated at Rs 24,374 cr while total remittances, which include investment flows etc.add up to over Rs 71,142 cr as per the study. About 19% households currently had an emigrant member while another 29% had in the past.
Remittances make up over a third of the net state domestic product -20% more than the revenue income of the state government and five times the funds the Centre gives the state.
But all this is changing. Since 2014, remittances inflow started faltering; it has since dipped by over Rs 23,350 cr in 2015 (World Bank). This follows a smaller slip in 2014. Can this likely impact the elections? The decline is not big, it will not have a big effect says S Irudaya Rajan, CDS professor and a co-author of the study . The impact will be visible if the decline continues for three to five years, he believes, adding that the emigrant Keralite does play a significant role in elections.
“In earlier elections, about 10,000 emigrants came back to vote. But more importantly , the 2.4 million Keralites working abroad have their wives, brothers, sisters and parents, estimated to be about 10 million votes in Kerala. They can change the political scenario of Kerala, if they influence their families,“ Irudaya Rajan said.
The long term trends of emigration are not very rosy says the KMS analysis. Emigration is likely to decline not because of external factors but due to Kerala's contracting youth population, better education, higher wages in India and prospects in other states.
There were an estimated seven lakh migrants living in other states of India in 2014 while about four lakh Keralites had returned back to the state after working in other states.While these numbers are small compared to emigrants going abroad, but adding the two together, the total number of Keralites seeking work outside the state is enormous. This is an indication of the severe employment crisis in the state which will cast a shadow on the electoral process.
Remittances and the global oil economy
2016
Remittances slip on oil, down $1.5 billion
Subodh Varma
Global economic slow down and turmoil has led to a decline in remittances -money sent from Indians working abroad -in 2015, an estimate by the World Bank indicates.
Although India still continues to be the topmost remittance receiving country , the flow was $68.9 billion in 2015, a dip of about $1.5 billion over 2014.
This is the first time since the global financial crisis of 2008-09 that remittances have gone down.
Falling oil prices, sluggish growth in the United States, slowing economies in Europe and adverse currency exchange rates have contributed to this decline, said DilipRatha, who heads the World Bank unit responsible for studying global migration and remittances.
“India gets remittances from all over the world but the bulk comes from the oil producing Gulf countries, US and also Europe. The effect of oil glut and resultant downswing of economies in the Gulf countries has had some delayed impact on remittances,“ he told.
The effect of global economic turmoil was becoming evident in remittance flows to India since 2013 when yearly growth plummeted to just 1.7% over 2012. In 2014, inflows increased by just 0.6% . The last time remittances had declined was in 2009.
For countries where clear data is not available, the number of migrants from a country , and the cost of living in both the source and receiving countries are used to work out an estimate of remittances, Ratha explained. The data also does not capture money flows through informal channels, like hawala.
A notable feature of India's inbound remittances is the $9 billion coming in from the neighbours. These are based on estimates made by UN of Indian born people residing in these countries.
