Why India remains top of remittances league

 
Pakistani and Indian employees of subcontracters working for British oil giant BP in Algeria listen to a man giving informations as they wait for their flight back to Dubai at the Palma de Mallorca airport on January 18, 2013. South Asian migrant workers are sending home more money than ever before

Indians working abroad continue to send more money home than their counterparts from other countries.

In 2012, India topped the list with $70bn (£47bn) of remittance inflows, followed by China ($66bn), the Philippines and Mexico ($24bn each), Nigeria ($21bn), according to the latest World Bank figures on migration and remittances.

Nothing surprising about that: India has been the top recipient of remittances in the world for 15 of the past 23 years and the past five years in a row.

I asked Dilip Ratha, economist and manager of the World Bank's migrations and remittances unit, how migrant Indian workers continued to send so much money home despite the global slowdown.

What he said gave me an interesting insight into the resilience of migrant workers.

Mr Ratha said the global financial crisis actually resulted in a small and brief decline in remittance flows to India in 2009.

The crisis, he says, seems to have affected new migration flows from India. But most of the existing workers stayed put and stuck it out.

They cut consumption, saved on rent and continued to send money home. A large number of Indians working in the construction sector in Gulf countries, for example, moved to retail trade and building maintenance after the downturn there.

The depreciation of the rupee against the US dollar in 2008 and 2009, and in late 2011 also helped, Dr Ratha explained.

This resulted in a fall in the dollar prices of Indian goods, services and assets like housing, bank deposits and stocks - making them more attractive to migrants and encouraging remittances.

"Although migrant workers are to a large extent adversely affected by the slow growth in the global economy, remittance volumes have remained remarkably resilient, providing a vital lifeline to not only poor families but a steady and reliable source of foreign currency in many poor remittances recipient countries," agrees Hans Timmer, director of the bank's Development Prospects Group.

Overall migrant workers are sending more money home than ever.

Worldwide remittance inflows, according to the World Bank, are expected to touch $534bn in 2012 and grow to $685bn in 2015. Remittance flows to developing countries are now actually more than three times that of official development assistance.

More than 200 million people live and work outside their countries, according to the United Nations. Indian migrant workers, like many of their counterparts from developing countries, must be some of the most resilient around.

 
Soutik Biswas Article written by Soutik Biswas Soutik Biswas Delhi correspondent

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  • rate this
    +4

    Comment number 17.

    14.nicky

    And I think people like you should try thinking a little more carefully before you post such ignorant comments which stereotype "the west". Many Indians send money home because their families need it.
    Many in the west also save hard for houses, education etc.

    Also, our parents tend to be more affluent and don't need their kids to provide financial support for them.

  • rate this
    +5

    Comment number 16.

    India is top of the list as there are more migrant Indian workers than any other nationality, hardly surprising given the size of the population. The more interesting and telling statistic would be value of remittance per migrant. Giving the essentially slave labour conditions many Indians are trapped into in the GCC and elsewhere I'm sure India would not be topping this table.

  • rate this
    -1

    Comment number 15.

    Sautik, your conversion from dollars to GBP is wrong.
    1£ = $1.5
    so $70bn = ~£47bn
    not £840m

    and around £20k of that remittance was from me. just because the Rupee has been so weak lately and interest rates are relatively higher in india.

  • rate this
    +2

    Comment number 14.

    Saving money and invest at home is typical of Indian culture, unlike in the west where people have no hesitation to spend money on alcohol, drugs and women. I think the west should learn from the Indians and the Chinese, or else their economic doom is quite near.

  • rate this
    +4

    Comment number 13.

    Why is someone jealous if the highest remittances are from India& China because people work very hard and earn and save more than the rest and send back to their loved families.USA land of immigrants since independence the largest economic power &UK have Indians sending large remittances apart from Middle East whose only qualification is Exporting Oil of their Land and they truly deserve credit.

  • rate this
    +8

    Comment number 12.

    The negative comments on this article are probably by those who are not Indian.

    1) Indians will make sacrifices for their family at great personal cost. 2) Indians will scrimp and save and send money home to help not just their immediate family, but also their extended family.

    We take pride in our culture of giving without taking. It is a sign of our humanity, of our sacrifice. Think it over.

  • rate this
    +2

    Comment number 11.

    The RBI recently released some data showing that remittances brought more Forex to India than any other single economic activity, including our gigantic IT Services industry! That was stunning for me. Imagine how much larger the relative contribution must have been earlier when we didn't export anything!

    It is food for thought at the least.

  • rate this
    0

    Comment number 10.

    "The-Picture" is yet to get "Bigger" to see everything clearly. Many things have been said about the hardship and the "ghettoship" of the indian living outside to feed their family a square meal, But, one must not overlook the family bond it needs to feel for your kith and kins through thick and thin. It could have been much easier for them to indulge into a luxurious life with all they earn.

  • rate this
    0

    Comment number 9.

    Can you blame them, it's hardly going to be the Indian government who will be helping the families, with no social system in place.

    As a matter of fact, it's the fault of the Indian government in the first place that indians have to leave their families in order to earn some money to survive on, even if it is abroad.

  • rate this
    0

    Comment number 8.

    Ever been to any of the airports in the Arab countries? All the cleaners on all airports are exclusively indians. They live in terrible conditions and send almost all the money they earn to their big families back home

  • rate this
    -1

    Comment number 7.

    It is not surprising when India has more poors than combined in all African countries

  • rate this
    -3

    Comment number 6.

    "Why India remains top of remittances league"

    It's simple: Everybody from an overly populated thirld world country takes every chance to get out of it and once abroad, send most of their savings to too many and too poor relatives back home.

    Result of over-population, rife poverty, extended families and corrupt sytem which does very little for its poor masses

  • rate this
    -2

    Comment number 5.

    i just love righteous people like kev(#3)..they are so much fun for the rest of us ...ty kev:)))) India thx you & your good manners too..

    :)))))))

  • rate this
    0

    Comment number 4.

    It is interesting that the Indian government offers favorable exchange rate and banking terms to those who go abroard to work and send money home to India.

  • rate this
    -1

    Comment number 3.

    They HAVE to send money home because most have so many kids to support and sadly most families are the poorest of the poor! Developing for the wealthy NOT the poor!

  • rate this
    -6

    Comment number 2.

    The news is hard.y surprising. Indians live in cramped immigrant ghettos and compromise all comfort just to hang on at a foreign land. This wilful behaviour of self-torture is mentioned as resilience in the article.

  • rate this
    +1

    Comment number 1.

    India the land of fascination for the west and north. The Hun's came, The Central Asian's came, Alexander and Changeze Khan came. All European powers came. Why Should The Indians staying away stay behind every one wants a little piece of the pie

 

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