ISLAMABAD: The Pakistan Remittance Initiative is helping exert downward pressure on costs of making remittances to the South Asian region, and the trend is likely to continue, says a World Bank report.
In its latest issue of migration and development brief, the World Bank says that total average cost of making remittances in the South Asian region fell to 6.6 per cent in the first quarter of 2014, from 7.2pc a year ago.
The US is a larger corridor from US to Pakistan which attracts more remittance service providers and typically is more competitive that leads to some of the lowest remittance costs in the world.
The adoption of improved technology, like cellphone services that enable remittances, are helping exert downward pressure on costs of making remittances to the region, the report says.
It says that Pakistan Remittance Initiative remains a central part of the government’s efforts to encourage inflows from Pakistani diaspora.
As part of the initiative, the government in March made payments to financial institutions of almost $100 million to pay for charges due to banks and cover outstanding dues.
The initiative launched in 2009 aiming to facilitate remittance flows to Pakistan, and additional efforts under preparation include establishment of a dedicated remittance complaint resolution mechanism and encouraging migrants to open bank accounts before they depart.
The report says that remittances to Pakistan grew rapidly in the second half of 2013, and continued to provide essential support to the balance of payments, and they were equivalent to 284pc of international reserves.
The report says that the outlook for remittances in the South Asian region is strong, and growth is projected to accelerate to an annual average of over 7pc in 2014-2016.
Remittances remain the largest source of external flows in the region, exceeding foreign aid and substantially more stable than FDI and private flows.
Growth in remittances to the South Asia region slowed, rising by a modest 2.3pc to $111bn in 2013, compared with an average annual increase of more than 13pc during the previous three years.
Remittances to developing countries are estimated at $404bn in 2013, up 3.5pc compared with 2012.
Growth in remittance flows to developing countries is expected to accelerate to an annual average of 8.4pc over the next three years, raising flows to $436bn in 2014 and $516bn in 2016.
Rising anti-immigrant sentiment in many developed destination countries, as evident from deportation of migrants, is a growing concern. Saudi Arabia deported more than 370,000 migrants in the five months since November 2013. In the US, over 368,000 people were deported in 2013.
According to new data released by UN, there were 232 million international migrants in 2013, up from 175 million in 2000.