Support by remittances for families in developing countries, especially in Asia, has risen dramatically.
Photo: ©IFAD/ G.M.B.Akash

The importance of remittances

800 million family members globally are supported by remittances, according to a report by IFAD. Taken together, individual remittances account for far more than the combined Official Development Assistance.

The amount of money migrants send to their families in developing countries has risen by 51 per cent over the past decade - far greater than the 28 per cent increase in migration from these countries, according to a report entitled Sending Money Home: Contributing to the SDGs, One Family at a Time published by the International Fund for Agricultural Development (IFAD) in June 2017. 

While the report shows that there have been increases in sending patterns in the ten years to
almost all regions of the world, the sharp rise over the past decade is in large part due to Asia, which has witnessed an 87 per cent increase in remittances.

More than 200 million migrant workers are now supporting an estimated 800 million family members globally. The relatively small amounts of money that each migrant sends home make up about 60 per cent of the family’s household income. Approximately 85 per cent of total migrant-worker earnings remains in the host countries. The money migrants send home averages less than one per cent of their host country’s GDP.

It is forecast that in 2017 one in seven people worldwide will be either sending or receiving remit-tances, amounting to a total of more than 450 billion US dollars. Migration flows and the remit-tances that migrants send home are having large-scale impacts on the global economy and the political landscape.

Taken together, these individual remittances account for more than three times the combined Official Development Assistance (ODA) from all sources, and more than the total foreign direct investment to almost every low- and middle-income country.

The top ten sending countries account for almost half of annual flows, led by the United States, Saudi Arabia and the Russian Federation. Eighty per cent of remittances are received by 23 coun-tries, led by China, India and the Philippines. About 40 per cent of remittances are sent to rural areas, although transaction fees to remote rural areas are particularly high. 

Read more: IFAD report "Sending Money Home: Contributing to the SDGs, one Family at a time"

Author: (IFAD/ile)