In the year 2000, statistics revealed that
173 million people lived as migrants across the world while in 2017 there were
258 million migrants living in different parts of the world. In 17 years, migrant population increased by
49%. As a logical consequence of increase in migration there has been a stupendous rise in global remittance flows. In 2000, global remittances accounted for
USD 132 billion. However by 2017 global remittances increased 3.6 times and were valued at
USD 613 billion. These statistics present a crystal clear picture of how migration and remittances are inextricably linked.
Developing economies are unequivocally dependent on their diaspora population to spur GDP and economic growth through remittances. World Bank’s latest Migration and Development Brief records an 8.5% rise in remittances to low and middle income countries
USD 466 billion in 2017. Remittances constitute an integral aspect of the GDP of countries like
Kyrgyzstan (35%), Tonga (33%), Tajikistan (31%) and Haiti (29%). Remittances bring pecuniary benefits to individual households and the economy in general. They are a gateway for households to
exercise greater purchasing power and add value towards their overall human development. Interestingly, it is not only developing economies which stand to gain from migration. According to the International Migration Report (2017), migration has led to
42% increase in the population growth in North America. Europe too, was on the brink of seeing a dip in its population growth but the steady influx of migrants brought about
2% increase in population.
Research reports highlight that during the period 2000-2017 there has been a consistent pattern in migration. Asia saw an addition of
30 million migrants, Europe added
22 million migrants, migrants in North America increased by
17 million while Africa’s migrant population saw a rise of
10 million people. UN reports of 2017 substantiate that more than
50% of the world’s international migrants live in less than 10 countries. The consistent rise in migration from 2000-2017 is one of the key driving factors in rise of remittances.
It can be presumed that migration and remittances are here to stay for the long haul. In that case, it is imperative to gain a microeconomic view of how remittances are consumed in the home country. Most statistics or research findings highlight the channels
through which remittances are consumed. Recently Xpress Money had commissioned a survey in the UK to gain insight into the remittance and spending patterns of migrants in the UK. The survey findings led to a better understanding of the surge of millennial
migrant workers in the realm of remittances and their liberal remittance behaviour. Remittances, if channelized towards long term investments and entrepreneurial ventures would be a value-add towards economic growth. Financial literacy and planning may be
the way forward for migrants to ensure their remittances contribute to economic progress in the long haul.
In 2018 global remittances are expected to generate
USD 616 billion. Without an iota of doubt, global remittances are expected to go a notch higher. If we were to analyse the matrix of migration and remittances, it might be concluded that remittances would cease to exist if international migration were to
come to a standstill. The intelligent way forward would be to ensure maximum utilisation of remittance inflows from a long term investment perspective. A move in this direction would signify a quantum leap that would result in accelerated economic and human
External | what does this mean?