Blue collar workers send home most of earnings

Bulk of the remittances among low-and middleincome countries was made by Indians in 2017

Abulk of remittances to the top recipient countries comes from Gulf countries, including the UAE, where blue collar workers live on shoestring budgets to support families back home.

Indian expatriates living in the UAE and abroad sent the largest amount of remittances home in 2017 among low- and middle-income countries globally, a new World Bank report said. India recorded remittance receipts of $69 billion last year, placing it ahead of other countries such as China ($64 billion), the Philippines ($33 billion) and Egypt ($20 billion), the report noted.

Social workers said bluecollar women workers from the Indian subcontinent and Africa come from very poor backgrounds. They come as cleaners, conductors, support staff and salon workers.

Grace Nannungi from Uganda earns Dh1,500 a month. “I have a son, David, and have to support my brother’s daughter and mother. I send Dh400 to my mum and Dh900 for the food, clothes and education of the kids, setting aside just Dh200 for myself,” she said.

Indian expatriates living in the UAE and abroad sent the largest amount of remittances home in 2017 among low- and middleincome countries globally, suggests a new World Bank report.

India recorded remittance receipts of $69 billion (Dh253.23 billion) last year, placing it ahead of other countries such as China ($64 billion), the Philippines ($33 billion) and Egypt ($20 billion), the report noted.

The report said remittances to low- and middle-income countries topped $466 billion last year, an increase of 8.5 per cent compared to $429 billion in 2016. Total global remittances grew 7 per cent to $613 billion in 2017, from $573 billion in 2016.

The report forecast that “global remittances are expected to grow 4.6 per cent to $642 billion in 2018”.

Promoth Manghat, CEO of UAE Exchange Group, told Gulf

News yesterday that the year’s forecast seems accurate given rebounding remittance figures.

Stable outflows from UAE

Remittances from the UAE to India remain stable by expats sending money home to support families and others who are chiefly remitting funds for savings and investments in their home country, he said.

He noted that the recent depreciation of the rupee has prompted many to send remittances now to gain extra benefits at the receiving end.

“The amount of money being sent will vary. When the rupee depreciates, they send more money naturally,” he said, adding there will always be “a need for some people to send money. They are also repatriating their savings and earnings”.

In March, fourth-quarter of 2017 figures released by the UAE Central Bank revealed that remittances from the UAE shot up by Dh1 billion to more than Dh43 billion over the same period last year.

The lion’s share of funds being transferred out of the UAE, the UAE Central Bank said, (approximately 70 per cent) landed in seven countries, with India taking the largest amount coming in at Dh14.8 billion or roughly 34 per cent.

Pakistan was reported to have received the second-largest amount of funds of Dh4.1 billion in the 2017 fourth quarter followed by the Philippines, with Dh3.1 billion.

Improved oil sales

The World Bank report, meanwhile, said other regions also witnessed growth in 2017 spurred on improved oil sales after disappointing 2016 numbers.

Remittances to the Middle East and North Africa grew 9.3 per cent to $53 billion in 2017, driven by strong flows to Egypt, the report stated.

Remittances to Sub-Saharan Africa accelerated 11.4 per cent to $38 billion in 2017, supported by improving economic growth in advanced economies and higher oil prices benefiting regional economies.

“While remittances are growing, countries, institutions, and development agencies must continue to chip away at high costs of remitting so that families receive more of the money. Eliminating exclusivity contracts to improve market competition and introducing more efficient technology are high-priority issues,” said Dilip Ratha, lead author of the report.

Remittances appear to show no sign of slowing in 2018, the report said, with countries in South Asia seeing small singledigit gains.

“Remittances to South Asia grew a moderate 5.8 per cent to $117 billion in 2017. Remittances to many countries appear to be picking up after the slowdown in 2016. Remittances to India picked up sharply by 9.9 per cent to $69 billion in 2017, reversing the previous year’s sharp decline,” stated the report.

“Flows to Pakistan and Bangladesh were both largely flat in 2017, while Sri Lanka saw a small decline (-0.9 per cent). In 2018, remittances to the region will likely grow modestly by 2.5 per cent to $120 billion.”

While remittances are growing, countries, institutions, and development agencies must continue to chip away at high costs of remitting so that families receive more of the money. Eliminating exclusivity contracts to improve market competition and introducing more efficient technology are high-priority issues.”

Dilip Ratha | Lead author of the World Bank report