India has retained its position as the highest recipient of global remittance flow at $52 million in 2008, the World Bank said in a report.
Other than India, China and Mexico, the top 10 recipients of remittances include the Philippines, Poland, Nigeria, Romania, Egypt, Bangladesh and Vietnam.
Remittance flow to South and East Asia has continued to post strong growth, largely on the fact that the gulf countries, a major destination for Asian migrants, have not significantly reduced hiring migrants.
According to the World Bank Migration and Development brief, India with $52 million, China ($40.6 million) and Mexico ($26.3 million) have retained their positions as the top recipients of migrant remittances among the developing countries despite the fact that remittances have slowed down in many corridors since the last quarter of 2008.
Growth of remittances to South and East Asia is also because of the switch in motivation for remittances from consumption to investment: falling asset prices, rising interest rate differentials and a depreciation of the local currency.
However, the World Bank observed that the outlook for this year looks bleak because of deterioration in the economic and employment situation in the migrant - destination countries in the first half of this year.
A lagged response in remittance flow to South and East Asia may arise from the current slowdown in economic activities in the Gulf Cooperation Council (GCC) countries. This is especially relevant for Kerala (India), Bangladesh, Sri Lanka and the Philippines that have migrant workers in construction sectors in Dubai.
According to the revised projections by the World Bank, global economic growth is also expected to be negative, with an expected 2.9 per cent contraction of the global GDP in 2009.
"In line with this outlook, we expect that remittance flow to developing countries could decline by 7-10 per cent in 2009, with a possible recovery in 2010 and 2011," the World Bank said.
As per the World Bank Development Prospects Group Lead Economist Dilip Ratha, "...Even a small decline of 7 or 10 per cent can pose significant hardships to the people and to governments, especially those facing external financing gaps."
He further said, "Reducing remittance fees and developing innovative tools to leverage remittances for financial inclusion and capital market access should be a part of our response to the financial crisis."
