Migration and Development Brief
Author

Dilip Ratha, Supriyo De, Ervin Dervisevic, Sonia Plaza, Kirsten Schuettler, William Shaw, Hanspeter Wyss, Soonhwa Yi, Seyed Reza Yousefi

April
2015
Thematic Working Groups
Data and Demographics
Remittances and Diaspora Resources
Regions
Africa
East Asia and Pacific
Europe and Central Asia
Latin America and the Caribbean
Middle East and North Africa
North America
South Asia
The World Region
Abstract:
  • Using newly available census data, the stock of international migrants is estimated at 247 million in 2013, significantly larger than the previous estimate of 232 million, and is expected to surpass 250 million in 2015.
  • Migrants’ remittances to developing countries are estimated to have reached $436 billion in 2014, a 4.4 percent increase over the 2013 level. All developing regions recorded positive growth except Europe and Central Asia (ECA), where remittance flows contracted due to the deterioration of the Russian economy and the depreciation of the ruble.
  • In 2015, however, the growth of remittance flows to developing countries is expected to moderate sharply to 0.9 percent to $440 billion, led by a 12.7 percent decline in ECA and slowdown in East Asia and the Pacific, Middle-East and North Africa, and Sub-Saharan Africa. The positive impact on flows of a robust recovery in the US will be partially offset by continued weakness in Europe, the impact of lower oil prices on the Russian economy, the strengthening of the US dollar, and tighter immigration controls in many source countries for remittances. Remittance flows are expected to recover in 2016 to reach $479 billion by 2017, in line with the more positive global economic outlook.
  • The global average cost for sending money remained broadly at 8 percent in Q4 2014, with the highest average cost (about 12 percent) in Sub-Saharan Africa. Concerns over money laundering are keeping costs high by increasing compliance costs for commercial banks and money transfer operators, and delaying the entry of new players and the use of mobile technology.
  • In the context of the global deliberations on financing the implementation of Post-2015 development goals, migration and remittances can be leveraged to raise development financing via reducing remittance costs, lowering recruitment costs for low-skilled migrant workers, and mobilizing diaspora savings and diaspora philanthropic contributions. Remittances can also be used as collateral, through future-flow securitization, to facilitate international borrowings with possibly lower costs and longer maturities. And they can facilitate access to international capital markets by improving sovereign ratings and debt sustainability of recipient countries.