UAE remittances to India drop on migrant exodus
Kerala worst-hit as 1.2M Gulf workers returned to the state in the aftermath of Covid-driven layoffs
Remittances from the UAE — the world’s second-largest source country — to India recorded a sharp 17 per cent decline in 2020 following the repatriation of more than a million expatriates due to pandemic induced job losses, the World Bank said.
Globally, the US was the main source country for remittance outflow ($68 billion) in 2020, followed by the UAE ($43 billion), Saudi Arabia ($34.5 billion), Switzerland ($27.9 billion), Germany ($22 billion) and China ($18 billion).
In 2019, expatriates from the UAE remitted Dh165 billion ($45 billion), according to the Central Bank of the UAE.
From across the world, India received over $83 billion in remittances in 2020, a drop of just 0.2 per cent from the previous year, despite the pandemic’s devastating impact on the global economy, a World Bank report said. In 2019, India had received $83.3 billion in remittances.
In sharp contrast, global remittances to Pakistan rose by about 17 per cent, with the biggest growth coming from Saudi Arabia, followed by the European Union countries and the UAE.
Remittances to Bangladesh also showed a brisk uptick in 2020 (18.4 per cent), while Sri Lanka witnessed remittance growth of 5.8 per cent.
Kerala has been the worst-hit by the drop in remittances from the Gulf countries from where about 1.2 million workers returned to the South India state in the aftermath of Covid-driven layoffs, said the Washington-based bank.
Pre-pandemic, Kerala had an estimated four million expatriates working in the GCC countries contributing 30 per cent of the state’s income. Low-skilled workers were the hardest hit. The monthly remittances to families receiving them in Kerala fell on average by $267, the World Bank said.
For 2021, the bank projected the remittances to the region to dip slightly to 3.5 per cent “due to a moderation of growth in high-income economies and a further expected drop in migration to the GCC countries”.
The main factor in the level of remittances holding up was family loyalties and the stimulus payments in some countries where the workers were located.
“The resilience of remittance flows is remarkable. Remittances are helping to meet families’ increased need for livelihood support,” said Dilip Ratha, lead author of the report on migration and remittances.
“They can no longer be treated as small changes. The World Bank has been monitoring migration and remittance flows for nearly two decades, and we are working with governments and partners to produce timely data and make remittance flows even more productive,” Ratha said.
Remittances outflow from India in 2020 was $7 billion, against $7.5 billion in 2019, according to the World Bank.
For the South Asian region, remittances rose by about five per cent because of increased flows to Bangladesh, Pakistan, Bhutan and Sri Lanka, according to the brief.
Although India’s remittances from the UAE recorded a steep decline of 17 per cent, it was offset by resilient flows from the US and other host countries, said the report.
However, India remains the world’s top recipient of remittances in total value, a status it reached in 2008, according to the brief.
China, which received $59.5 billion in remittances in 2020 against $68.3 billion the previous year, is a distant second in terms of global remittances for the year gone by, as per the latest World Bank data released.
India and China are followed by Mexico ($42.8 billion), the Philippines ($34.9 billion), Egypt ($29.6 billion), Pakistan ($26 billion), France ($24.4 billion) and Bangladesh ($21 billion), it showed.
Remittances to Nepal fell by about two per cent, reflecting a 17 per cent decline in the first quarter of 2020.
The World Bank, in its latest Migration and Development Brief, said despite Covid-19, remittance flows remained resilient in 2020, registering a smaller decline than previously projected.
Officially recorded remittance flows to low- and middle-income countries reached $540 billion in 2020, just 1.6 per cent below the 2019 total of $548 billion.
“As Covid-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable,” said Michal Rutkowski, global director of social protection and jobs global practice at the World Bank.
“Supportive policy responses, together with national social protection systems, should continue to be inclusive of all communities, including migrants,” Rutkowski added.
Remittance inflows rose in Latin America and the Caribbean (6.5 per cent), South Asia (5.2 per cent) and the Middle East and North Africa (2.3 per cent).
However, it fell for East Asia and the Pacific (7.9 per cent), for Europe and Central Asia (9.7 per cent) and for Sub-Saharan Africa (12.5 per cent), the report showed.
The decline in flows to Sub-Saharan Africa was almost entirely due to a 28 per cent decline in remittance flows to Nigeria. Excluding flows to Nigeria, remittances to Sub-Saharan Africa increased by 2.3 per cent, demonstrating resilience.
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