A new report by the International Fund for Agricultural Development (IFAD) says the flow of money from migrants — commonly located in developed countries — to their families in lower income countries has doubled over the last decade.
Dubbed the remittance flow, it increased by 51 percent — from 296 billion dollars in 2007 to 445 billion in 2016 — lifting families out of poverty across the world.
Migrants in the United States typically send the largest amount of money, making the US the biggest benefactor, closely followed by Saudi Arabia and Russia, according to the report.
In fact, the top ten countries, largely in Europe and the Gulf Council, account for half of the annual flows.
The increase in flow of money brings good news. First, it increases the leverage of migrant workers all over the world. Second, it boosts sustainable development in countries which benefit from the money, notably China, India and the Philippines, which tops this list.
Asia receives nearly 55 percent of the total money sent from developed countries.
The money sent is used by families to achieve personal goals, such as improving healthcare, education and food security. This is why, despite the seemingly staggering numbers, Gilbert F. Houngbo, the President of IFAD, said “It is not about the money being sent home, it is about the impact on people’s lives.”
Still, even if the leading blocs account for half of the flow, they represent a tiny fraction of their country’s GDP.
For instance, migrant earnings in the US account for almost 4 percent of the GDP, while the money they send back to their families represents only 0.65 percent of the GDP.
Generally, 85 percent of a migrant’s income remains within the host country.
The value of the money sent back cannot be underestimated — most families rely on this income, which can make up to 60 percent of the household income in rural areas.
However, many criticize the high costs of transactions, especially in rural areas which receive the bulk of…