ISLAMABAD, Nov 9: Pakistani migrants abroad responded positively to the calls for help from their families and friends back home as flow of remittances recorded a surge following devastating monsoon floods, according to World Bank's latest “Migration and Remittances Factbook 2011.”This surge during the first three months (July-September) of the current fiscal year was a contrast against the steadily falling remittances for India and Bangladesh, says the report.
New figures published by the State Bank of Pakistan confirmed that remittances during July-September witnessed a surge.
In July, remittances were recorded at $791 million; in August $933 million and in September $922 million.
“Remittances lead to more investment in health, education and small business. With better tracking of migration and remittance trends, policy-makers can make informed decisions to protect and leverage this massive capital inflow which is triple the size of official aid flows,” says Hans Timmer, director of Development Prospects at the World Bank.
In South Asia, the top five remittance recipients in 2010 were: India ($55.0 billion), Bangladesh ($11.1 billion), Pakistan ($9.4 billion), Sri Lanka ($3.6 billion), and Nepal ($3.5 billion).
These countries are also the top five immigration countries. The remittance flows to South Asia are facing the risk of a lagged effect of the slowdown in construction in the GCC countries.
More recently in 2010, the appreciation of local currencies of remittance-receiving countries against the dollar (and GCC currencies tied to the US dollar) may have reduced the incentive to send remittances for investment motives, the Factbook states.Newly-available data show that officially recorded remittance flows to developing countries fell to $307 billion in 2009, registering a 5.5 per cent decline.
The decline in remittances during the global financial crisis was modest compared to a 40 per cent decline in foreign direct investment (FDI) between 2008 and 2009 and an 80 per cent decline in private debt and portfolio equity flows from their peak in 2007.
The World Bank report says that the recorded remittance flows to developing countries are estimated to have fully recovered to the pre-crisis level of $325 billion in 2010.
In line with the World Bank's outlook for the global economy, remittance flows to developing countries are expected to increase by 6.2 per cent in 2011 and 8.1 per cent in 2012, to reach $346 billion in 2011 and $374 billion in 2012, respectively.According to the report, the top remittance sending countries in 2009 were the United States, Saudi Arabia, Switzerland, Russia and Germany. Worldwide, the top recipient countries in 2010 are India, China, Mexico, Philippines and France.
As a share of GDP, however, remittances are more significant for smaller countries - more than 25 per cent in some countries.
According to the Factbook 2011, the top migrant destination country is the US, followed by Russia, Germany, Saudi Arabia, and Canada. The top immigration countries relative to population are Qatar (87 per cent), Monaco (72 per cent), UAE (70 per cent), Kuwait (69 per cent), and Andorra (64 per cent). Mexico-US is expected to be the largest migration corridor in the world this year, followed by Russia-Ukraine, Ukraine-Russia, and Bangladesh-India. The report points out that many destinations of migrants have seen increasingly hostile and anti-immigration sentiments that are coinciding with high unemployment rates and sluggish economic recovery.
Parties calling for stricter restrictions on immigration or ethnic groups have either received higher votes or are getting a bigger following in countries, such as Netherlands, Austria, Bulgaria, Denmark, France, Germany, Hungary, Italy, Norway, Sweden, and Switzerland.
Increasing negative attitudes towards immigrants are being observed in many European countries. One survey on Germany found that a third of Germans want foreigners to be repatriated. Nearly 60 per cent of Finns now feel that Finland should not increase the number of migrants; only 35 per cent felt so three years ago.
The global remittance market is undergoing a major structural change with the increasing popularity of mobile phone-based (and internet-based) remittances. There have also been significant changes in the regulatory environment for remittances in the US and Europe that are aimed at increased competition, transparency, and consumer protection in remittance markets.
Discussing the Diaspora bonds which are issued by countries often in times of liquidity crisis, the report listed 24 countries, including Pakistan, which can potentially consider issuance of Diaspora bonds which have several advantages, both for the issuer and for the emigrant who buys the bond.
However, countries with political insecurity and weak institutional capacity would find it hard to market Diaspora bonds unless credit enhancements are provided by more creditworthy institutions, the report points out.