WASHINGTON, November 30 – Remittances to developing countries will reach an estimated $240 billion in 2007, according to new data released today by the World Bank. The brief, “Remittance Trends 2007,” goes on to say that the true size of remittances including unrecorded flows is even larger. The release was timed to coincide with a November 28-30 G8 Outreach meeting on remittances in Berlin.
“Recorded remittances are more than twice as large as official aid and nearly two-thirds of FDI flows received by developing countries,” explained Dilip Ratha, Senior Economist in the Development Prospects Group of the World Bank.
The brief describes broad regional and country specific trends in remittance flows worldwide, and highlights some structural changes that will affect future flows.
According to the analysis, a near stagnation in remittance flows to Mexico and a deceleration in other Latin American countries contributed to a slowdown in the rate of growth of remittances in 2007. Nevertheless, the growth of remittances to developing countries remains robust because of strong growth in Europe and Asia.
The remittance industry is experiencing some positive structural changes with the advent of cell phone and internet-based remittance instruments. These changes, however, are slowed down by a lack of clarity on key regulations (including those relating to money laundering and other financial crimes).
“Remittance costs have fallen, but not far enough, especially in the South-South corridors,” said Uri Dadush, Director of the World Bank’s Development Prospects Group and International Trade Department. Mr. Dadush chairs the World Bank’s Working Group on Migration.