Remittances Compared with Other Resource Flows Remittances to Developing Countries Are Large and More Stable Than Other External Financing US$ billions
800 700
FDI Remittances ODA Private debt and portfolio equity
600 500 400 300
19 9 19 0 9 19 1 9 19 2 9 19 3 9 19 4 9 19 5 9 19 6 9 19 7 9 19 8 9 20 9 0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 2 1 20 1 1 20 3 1 20 4 1 20 5 16 20 f 17 f
200 100 0
Resource Flows to Developing Countries US$ billions 1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e Remittances FDI ODAa Private debt and portfolio equity
29 19 53
73 125 54
194 284 108
229 361 105
280 480 105
325 541 123
303 385 121
336 529 129
378 630 135
401 583 127
416 671 135
16
32
134
228
334
122
197
309
250
376
422
431 662 135
441 – –
443b
–
Sources: World Bank 2015; and World Bank Development Prospects Group (DECPG). Note: Remittances are based on IMF BPM6. Private debt includes only medium- and long-term debt. FDI = foreign direct investment; ODA = official development assistance; and — = data not available. a. OECD Development Assistance Committee (DAC) online database (http://www.oecd.org/dac). b. Estimated flows.
1. Remittances resulting from migration constitute reliable sources of foreign exchange earnings, and cushion households’ income during bad times. Remittance inflows to developing countries are more than three times official development aid (ODA); and even bigger than foreign direct investment inflows once China is excluded. Remittances have been growing steadily, showing their resilience to global headwinds, while other types of capital flows to the developing economies sharply respond to fluctuations of interest rates in advanced economies or growth prospects in developing countries. 2. Remittances are less volatile and more stable than all other external flows. Therefore, remittances help counter-balance fluctuations caused by weakening of capital flows to developing countries. 3. Small developing economies tend to show remittance dependency and need to upgrade their human capital to insulate themselves from external turbulence. For instance, remittances in 2014 accounted for 42 percent of GDP in Tajikistan, 30 percent in Kyrgyz Republic, and 29 percent in Nepal.
Migration and Remittances Factbook 2016
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