Indians remitted $50 billion in 2009; sent more than global counterparts

[mehboobkz]

GENEVA: Indians working overseas send more money back home than any of their global counterparts, remitting $ 50 billion in 2009 despite a worldwide economic slowdown and anti-immigration measures adopted by industrialised countries, according to a report.

In contrast, overseas workers from neighbouring China remitted $47 billion during the year, as per the World Migration Report 2010.

Together, the two Asian giants accounted for nearly half of total remittance inflows into Asia, which were pegged at $ 162.5 billion in 2009. This translated into about 39 per cent of total global remittances.

At a time when migrants are subjected to numerous difficulties, "governments have to make targeted and concerted efforts in managing migration", said the International Organisation for Migration (IOM), which brought out the report.

"The international community risks losing a historic opportunity to take advantage of this global phenomenon if adequate policies and resources are not put into place in a timely manner," the report warned.

India is one of the prominent sources of both inward and outward migration.

"The Indian diaspora numbers almost 25 million persons, 10 per cent of whom can be found in the USA," said the report, adding that the other destinations with a sizeable Indian population include Singapore, Malaysia and Gulf states.

In South-Central Asia, which includes Bangladesh, India, Nepal, Pakistan and Sri Lanka, the number of international migrants "is on the rise again, with an estimated 14.3 million migrants in 2010," as per the report.

"India remains the main country of destination in Asia, although its migrant stock decreased by 1.6 per cent between 2005 and 2010.

"India and Pakistan, as the largest economies in South- Central Asia, are less export-reliant than many economies in East Asia and South East Asia," the report notes, arguing that these two countries were spared growth shocks during the global crisis as a result.

Consequently, remittance flows to South Asia contracted by a modest 1.8 per cent in 2009, compared to a 7.5 per cent decline in other developing countries.

Global remittances , which are the mainstay for numerous developing countries, fell last year because of the economic recession and rising anti-immigration measures in several industrialised countries.


Indians remitted $50 billion in 2009; sent more than global counterparts - The Economic Times

 

[TechLahore]

Very interesting. I was trying to figure out how Pakistan is doing on this front. I think our numbers were $8.91B in FY09-10

Daily Times - Leading News Resource of Pakistan

On a per capita basis, one could project the following:

Pakistan ($8.9B/170M population) = $52.35 per person
India ($50B/1.18B population) = $42.37 per person

I believe this year Pakistan's remittance growth has been quite dramatic:

Pakistan: ?Foreign remittances to touch bn this year?

The expectation is they will grow to almost $12B this year.

But the winner in this is neither India, nor Pakistan. It is Bangladesh! They received $11B in FY09-10 and their per-capita contribution is as follows:

Bangladesh: ($11B/162M population) = $67.9 per person

Congrats to Bangladesh! This is a great achievement.

 

[Dalai Lama]

Very informative post. Thank you.

 

[KS]

Very interesting. I was trying to figure out how Pakistan is doing on this front. I think our numbers were $8.91B in FY09-10

Daily Times - Leading News Resource of Pakistan

On a per capita basis, one could project the following:

Pakistan ($8.9B/170M population) = $52.35 per person
India ($50B/1.18B population) = $42.37 per person

I believe this year Pakistan's remittance growth has been quite dramatic:

Pakistan: ?Foreign remittances to touch bn this year?

The expectation is they will grow to almost $12B this year.

But the winner in this is neither India, nor Pakistan. It is Bangladesh! They received $11B in FY09-10 and their per-capita contribution is as follows:

Bangladesh: ($11B/162M population) = $67.9 per person

Congrats to Bangladesh! This is a great achievement.

Indeed this phenomemon can be attributed to the strong belief we South Asians have in our family and social system.

BTW I think the figures for SL too would be respectable.

 

[Nalwa]

Very interesting. I was trying to figure out how Pakistan is doing on this front. I think our numbers were $8.91B in FY09-10

Daily Times - Leading News Resource of Pakistan

On a per capita basis, one could project the following:

Pakistan ($8.9B/170M population) = $52.35 per person
India ($50B/1.18B population) = $42.37 per person

I believe this year Pakistan's remittance growth has been quite dramatic:

Pakistan: ?Foreign remittances to touch bn this year?

The expectation is they will grow to almost $12B this year.

But the winner in this is neither India, nor Pakistan. It is Bangladesh! They received $11B in FY09-10 and their per-capita contribution is as follows:

Bangladesh: ($11B/162M population) = $67.9 per person

Congrats to Bangladesh! This is a great achievement.

There's a slight flaw in your analysis. Shouldn't we be measuring remittances based on the diaspora numbers rather than the internal population? After all its the diaspora that send in the money and the internal population just uses it. A true measure of productivity or remittance capability of a country would be measured by calculating it on the basis of the diaspora.

Lets see if the results are any different -


Remittances Diaspora Per capita
India 50Bn 24Mn 2083.3
Pakistan 8.9Bn 7Mn 1271.4
Bangladesh 11Bn 6.5Mn 1692.3

Turns out Indians remitt the most on a per capita basis.

Just an FYI, I just wanted to do a better analysis.

*I have used Wiki for diaspora numbers.

 

[Alphatech]

Indeed this phenomemon can be attributed to the strong belief we South Asians have in our family and social system.

BTW I think the figures for SL too would be respectable.

To be brutally honest, it also has to do with the fact by spending some of your wealth in your native country, you can significantly boost your image there. People would rather be seen as wealthy non-residents in their native countries than as a middle class immigrant in a foreign land. Most people, at least where I come from, send money home to buy up as much property as they can by exploiting the lower cost of living, rather than to invest in the development of their homeland. But, whatever the reason, any foreign exchange that comes into India is a great help to our country.

 

[KS]

To be brutally honest, it also has to do with the fact by spending some of your wealth in your native country, you can significantly boost your image there. People would rather be seen as wealthy non-residents in their native countries than as a middle class immigrant in a foreign land. Most people, at least where I come from, send money home to buy up as much property as they can by exploiting the lower cost of living, rather than to invest in the development of their homeland. But, whatever the reason, any foreign exchange that comes into India is a great help to our country.

You are not brutal --- that's the truth and it is the same all over India one of the factors behind that is to boost our family's image.

But even that helps grow our economy as more money invested is more money in circulation. So I for one is not complaining.

 

[Nalwa]

You are not brutal --- that's the truth and it is the same all over India one of the factors behind that is to boost our family's image.

But even that helps grow our economy as more money invested is more money in circulation. So I for one is not complaining.

What we are talking about is the very basis of immigration. A person immigrates because he sees greater opportunity in the prospective country vis-a-vis his won country. As such there will always be a need for sending money back as the situation back home wont be as good as the country he's currently living in.

And you're right many times, in fact most times these days, money remitted back is splurged on expensive lifestyle items. But many times it also pays for the younger brother's education and the sister's wedding. And in any case as long as the money is ploughed back into our economy, it should be ok.

 

[Nair saab]

The inflow of money is good...we also have to face the worse effect of it that is
"brain drain" from the country...

 

[KS]

And you're right many times, in fact most times these days, money remitted back is splurged on expensive lifestyle items. But many times it also pays for the younger brother's education and the sister's wedding. And in any case as long as the money is ploughed back into our economy, it should be ok.

What better way to spend than on education ?

 

[Alphatech]

What we are talking about is the very basis of immigration. A person immigrates because he sees greater opportunity in the prospective country vis-a-vis his won country. As such there will always be a need for sending money back as the situation back home wont be as good as the country he's currently living in.

But there is a difference in many situations like the South Asian scenario. In some countries where the family system is not as strong as ours, people who immigrate simply concentrate on spending everything they earn on their life in their new homes. They don't have strong ties with their extended family and they don't want to maintain an image back home. Only some people like South Asians feel the need to maintain the connection with their homeland and send money there, for whatever reason. That is where the South Asian extended family structure plays a significant role in boosting our economies.

 

[Nalwa]

But there is a difference in many situations like the South Asian scenario. In some countries where the family system is not as strong as ours, people who immigrate simply concentrate on spending everything they earn on their life in their new homes. They don't have strong ties with their extended family and they don't want to maintain an image back home. Only some people like South Asians feel the need to maintain the connection with their homeland and send money there, for whatever reason. That is where the South Asian extended family structure plays a significant role in boosting our economies.

You are absolutely right. Adding to your point, the family system is also what has encouraged a greater number of South Asians to move abroad. One sees a cousin/brother doing well abroad and we tend to follow them. Plus we South Asians don't lag behind in pushing our cousins and helping them out when they come out to a foreign country.

 

[TechLahore]

There's a slight flaw in your analysis. Shouldn't we be measuring remittances based on the diaspora numbers rather than the internal population?

Actually I completely disagree. A useful measure is how significantly the incoming funds affect your country. It doesn't affect your country at all if you have 1 guy sending in $10,000 per year even though that would yield ($10K remittance/1 size of diaspora =) $10K. This would be many times the figure you've quoted for India below, but it would be immaterial since $10K would be divided by a very large population, yielding a trivial amount of benefit for *Indians*. It would be highly beneficial for your country if you had 1B people sending in $100 each.

The real impact of remittances should be measured in terms of percentage of GDP, or on a per-capita basis where the population being considered is in the native country. Why? Because that is the population deriving the benefit from the income. NOT THE DIASPORA.

After all its the diaspora that send in the money and the internal population just uses it. A true measure of productivity or remittance capability of a country would be measured by calculating it on the basis of the diaspora.

No, I don't think this has much value in the way of calculating impact to a nations' economy. If anything, you need to multiply per-capita income of disapora X savings rate of diaspora X size of diaspora to arrive at the total remittance potential in any given year. And even if you were to do this calculation, it still doesn't say *anything* about how this potential will impact the recipient economy. To do that, you have to factor in per-capita impact on the recipient population. Which brings me to my original point.

You can spin numbers multiple ways, but they have to make logical sense in the context we are contemplating. In this particular case, the benefit to the Indian economy is what is being talked about. To that end, the per-capita numbers for India are still lower than other countries in the region. I am sure they will improve in future.

 

[Nalwa]

Actually I completely disagree. A useful measure is how significantly the incoming funds affect your country. It doesn't affect your country at all if you have 1 guy sending in $10,000 per year even though that would yield ($10K remittance/1 size of diaspora =) $10K. This would be many times the figure you've quoted for India below, but it would be immaterial since $10K would be divided by a very large population, yielding a trivial amount of benefit for *Indians*. It would be highly beneficial for your country if you had 1B people sending in $100 each.

Actually my objective wasn't to evaluate "benefit to home economy". I was trying to find out who remits the most on a per capita basis. The benefit to economy angle you have introduced now in your last post. Your previous post wasn't about that.

The real impact of remittances should be measured in terms of percentage of GDP, or on a per-capita basis where the population being considered is in the native country. Why? Because that is the population deriving the benefit from the income. NOT THE DIASPORA.

I agree. My metric wasn't good for evaluating impact on economy. But I think dividing by home population isnt an accurate metric as well. As you said factoring in GDP per capita or GDP PPP would be a better indicator. So how about remittances as a percentage of GDP? Lets see -

Remittances GDP per GDP
India 50Bn 1.23598E+12 0.04
Pakistan 8.9Bn 161,994,000,000 0.05
Bangladesh 11Bn 94602000000 0.11




Seems like BD tops again. Their diaspora might not be the best in sending the most money, but the money that they send for sure helps their economy the most.

 

[TechLahore]

Kutt@_Bimar, actually GDP or per-capita, it doesn't matter in the case of India and Pakistan. In both cases you see Pakistan roughly 20-25% ahead. And the reason is that per capita income for both countries is roughly the same, or in other words, the ratio of GDP to population is basically the same in both cases. You can pick either as the divisor and you end up at the same place.