Soaring remittances to developing nations overtake foreign direct investment
Remittances sent home by people who have migrated abroad have outstripped foreign direct investment in developing nations for the first time, a new report has found.
The International Organization for Migration found that international transfers increased 650% from $128bn (£102bn) to $831bn (£662bn) between 2000 and 2022.
“The growth continued despite predictions from many analysts that remittances would decrease substantially because of Covid-19,” IOM said in its World Migration Report 2024.
Money sent home by those who have emigrated from their home countries has long represented a greater source of revenue than international development aid to low- and middleincome countries.
But the sharp rise in remittances recorded by the World Bank and other data researched by IOM underlines just how significant migration has become for poorer economies.
The report shows that in 2020,
India, China, Mexico, the Philippines and Egypt were, in descending order, the top five remittance recipient countries, although India and China were well above the rest, with total inward remittances exceeding $83bn and $59bn, respectively.
The US has consistently been the top remittance-sending country with total outflow of $68bn in 2020, followed by UAE ($43bn), Saudi Arabia ($34.6bn), Switzerland ($28bn), and
Germany ($22bn).
In Europe, where migration has been one of the hottest political topics before the EU parliament elections, home affairs ministers have already started working on new migration laws aimed at curbing the flow of irregular migration.
The IOM’s director general, Amy Pope, said the report also highlighted the need to strengthen legal pathways for migrants from poorer nations.
She said research of Cuban, Haitian and Nicaraguan migration to the US showed an “immediate decrease in numbers of irregular migrants” when legal pathways were created, whether through family reunion or a boost in asylum places.
“When people know that there’s a credible way to get to safety or to get a job, that decreases what the smugglers are selling,” she said.
In Europe, the “Greeks, the Portuguese, the Italians, the Spanish, they’re all really thinking about that at this moment, because their populations are ageing”, she said after a meeting with
home affairs ministers a week ago.
“The anti-migration sentiment we’re hearing from so many different parts of Europe suggests that Europe needs to stop migration, where the evidence shows that Europe needs migration.
“But because of the politics around it, there is sometimes a reluctance to try to engage in a system to create a way for people to come in safely, to come in with dignity, and, frankly, to come in and get a job.”
The IOM report notes that people from countries with very high levels of human development can travel visafree to about 85% of all other countries worldwide.
“However, the visa restrictions in place for countries with very low levels of human development indicate that regular migration pathways are problematic for citizens,” the report says.