The economic blogosphere is buzzing about the recent World Bank report about the worldwide rise of remittance.
Representing payments that migrants workers send back to their home countries, remittances are inching near the $500 billion mark worldwide with no sign of slowing down.
This seemingly spells both good and bad news for the economy at large, though.
On one hand, the global economy is healthy enough to sustain widespread job and wage growth; however, countries relying on remittance continue to struggle on their path toward economic independence. For example, money from those sending remittance payments to Nicaragua makes up approximately 15% of the country’s GDP.
Why Do Countries Rely on Remittance, Anyhow?
The necessity of remittance varies from country to counter, but the three common threads of necessity are typically a combination of the following three points.
- Poor social and economic climates: crowded conditions and poverty make it nearly impossible for workers to thrive
- Employment opportunities abroad: given the global economy and the need to feel a variety of low and high-skilled jobs, becoming an expat is a viable option for those with limited options
- The desire to create a better quality of life back home: of course, the ultimate goal of remittances is to either encourage families reliant on remittances to eventually go abroad themselves or improve their situation
Below are six statistics that outline the current state of remittance and migrant work in general. Hopefully this brief list sheds light not only on remittance-reliant countries, but just how truly global of an issue such payments are.
Remittance Payments Spiked to $466 Billion in 2017
Representing an all-time high and 8.5% increase from 2016, the $466 billion figure is expected to rise another 4% in 2018. The strengthening of the euro and ruble are central to the uptick, as are higher oil prices.
India Rakes in the Highest Dollar Amount at $69 Billion…
India’s status at the number one country receiving remittance should come as no surprise given their massive population and workforce abroad. That said, India is an interesting case as unlike many remittance-reliant countries they do have a sizable working population and wealth at home. In fact, payments from expats only account for 4% of the country’s GDP.
…While Remittances Make Up 35% of Kyrgyzstan’s GDP
On the flip side, over one-third of Kyrgyzstan’s GDP comes from money abroad. Not surprisingly, a shocking number of the country’s total population are unemployed (around 30%) as the country has struggled to get on their feet following the fall of the Soviet Union. Like many remittance-reliant countries, lack of a notable export represents a major economic burden.
The Majority of Remittance Payments Go to Asia
Piggybacking on the last two stats, perhaps it’s not a shock that most remittance goes to Asia. India, China and the Philippines are the top three receiving remittance, and only three countries in the top ten aren’t located in Asia (Mexico, Nigeria and Egypt). Percentage-wise, remittance to Central America was above that of Asia, definitely a stat for experts to keep their eyes on.
Remittance Flows to Approximately 214 Counties and Territories
That said, both remittance payments and migrant workers aren’t confined to a specific region of the country. There are approximately 250 million migrant workers across the globe, after all. Spreading their wealth worldwide, remittance payments genuinely impact just about every country in some way, shape or form.
50% of Remittance-Reliant Jobs are in the IT Field
While there might be some generalizations over the sorts of jobs migrant workers take, 2017 job data from CareerBuilder sheds light on the fact that many expats are taking up jobs in the tech field. In addition to the 50% of migrant workers in IT, other popular career paths include finance, manufacturing and transportation.
The takeaway here is that we shouldn’t assume that migrants are only worried about manual labor. There are endless cases of jobs worldwide that can’t be filled domestically due to a lack of qualified candidates: the global workforce helps quell such a problem and use their income as a force for good.
At the end of the day, millions of families around the world rely on remittance not just to live a more comfortable life, but also to survive.
With these payments representing a good chunk of many countries’ respective GDPs, it’s fascinating to see where migrant workers end up and what sort of roles they take to support their families. The recent rise in remittance is a trend that economists will continue to watch as more expats continue to send massive amounts of money back home.