‘Pakistan to get more remittances from GCC unlike India, BD’
ISLAMABAD: While remittances to South Asian countries from the Gulf Cooperation Council (GCC) countries are expected to decline by 2.3 per cent in 2016, the World Bank says these are expected to grow by 5.1pc in Pakistan during the year.
The World Bank’s latest paper on ‘Migration and Development’ notes that remittances from the GCC countries continued to decline due to lower oil
prices and labour market ‘nationalisation’ policies in Saudi Arabia.
Remittances flows are expected to decline by 5pc in India and 3.5pc in Bangladesh, whereas they are expected to grow by 5.1pc in Pakistan and 1.6pc in Sri Lanka.
In 2016, the top recipients of remittances are, in nominal US dollar terms, India, China, the Philippines, Mexico and Pakistan and, in terms of remittances as a share of GDP, Nepal, Liberia, Tajikistan, Kyrgyz Republic and Haiti.
Amid a backdrop of weak global growth, remittances to developing countries are expected to increase only slightly in 2016, according to the paper.
Remittances to low and middle income countries are expected to increase 0.8pc to $442 billion. The modest recovery this year is largely driven by increases in remittances sent to Latin America and the Caribbean. In contrast, other regions seeing a decline in the earnings sent home by migrants. This follows a decline in the level of remittances recorded in 2015.
Low oil prices continued to be a factor in reduced remittance flows from Russia and the GCC countries. In addition, structural factors have also played a role in dampening remittances growth. Anti-money laundering efforts have prompted banks to close down accounts of money transfer operators, diverting activity to informal channels.
Policies favoring employment of nationals over migrant workers have discouraged demand for migrant workers in the GCC countries. Also, exchange controls in countries from Nigeria to Venezuela have disrupted the flow of remittances, it says.
The global growth of remittances to developing countries is projected to remain modest at about 3.5pc over the next two years. Developing regions other than Latin America and the Caribbean are projected to have growth of 2pc or lower.
The global average cost of sending $200 remained at 7.6pc in the second quarter of 2016. Average costs have dropped from 9.8pc in 2008. The highest-cost, region to send money to continues to be Sub-Saharan Africa at 9.6pc, while it is the least costly to send remittances to the South Asia region.
The paper notes that there are about 250 million international migrants and almost three times as many internal migrants. Out of these, there are 21.3 million refugees, including 5.2 million Palestinian refugees. Although the number of refugees has increased considerably recently, it has not reached the historically high levels seen in the early 1990s.
Intra-regional migration is substantial and South-South migration outpaces South-North migration. Inequality, demographics and climate change continue to be the main drivers of economic migration, the World Bank paper notes.
Published in Dawn, October 9th, 2016