Countries That Lead In Outward Remittances

In this section, we aim to bring a series of country led insights on their immigration and remittances. Based on the World Bank Report, these nations have been contributing immensely to the GDPs of numerous developing nations and providing valuable foreign exchange.

We start this series with United States, ranked No. 1 in the remittance outflow at US$ 48.3 billions (as per 2009).

United States

It is classified as one of the high-income countries. Following are certain interesting facts regarding this country: –

Population (2009) 307 million
Population growth (avg. annual %, 2000–09) 1.0
Labor force (2008) 156.3 million
GDP growth (avg. annual %, 2005–09) 1.2

IMMIGRATION, 2010

  • Immigrants: 42,813.3 thousands
  • Immigrants as percentage of population: 13.5%
  • Females as percentage of immigrants: 49.9%
  • Refugees as percentage of immigrants: 1.3%
  • Countries from where citizens migrate to the United States: Mexico, China, the Philippines, India, Puerto Rico, Vietnam, El Salvador, the Republic of Korea, Cuba, Canada.

Outward remittances from the United States have increased on a YOY basis, apart from 2009, which was marginally affected due to the economic slowdown.

Do you think this trend of outward remittance would continue to grow from the US?

Australia

Having analyzed United States of America, now lets take a look at Australia.

 

Population (2009)

 

21.9 million

 

Population growth (avg. annual %, 2000–09)

 

1.4

 

Labor force (2008)

 

10.9 million

 

GDP growth (avg. annual %, 2005–09)

 

2.9

IMMIGRATION, 2010

  • Immigrants: 5,522.4 thousands
  • Immigrants as percentage of population: 25.7%
  • Females as percentage of immigrants: 43.8%
  • Refugees as percentage of immigrants: 0.8%
  • Countries from where citizens migrate to Australia: the United Kingdom, New Zealand, China, Italy, India, Vietnam, the Philippines, Greece, South Africa, Germany

Although the labor force is less as compared to the United States of America, we can see that population is growing at a good pace. The average annual GDP is growing at a faster rate as compared to the United States of America.

Also, from the above table, one may assume that Australia attracts immigrants and thus, may be the outflow of remittances has been increasing on a YOY basis.

Do you think that this trend of outward remittance would continue to grow from  Australia?

 

United Kingdom

 

Population (2009)

 

61.8 million

 

Population growth (avg. annual %, 2000–09)

 

0.5

 

Labor force (2008)

 

31.4 million

 

GDP growth (avg. annual %, 2005–09)

 

0.6

IMMIGRATION, 2010

  • Stock of immigrants: 6,955.7 thousands
  • Stock of immigrants as percentage of population: 11.2%
  • Females as percentage of immigrants: 49.7%
  • Refugees as percentage of immigrants: 4.3%
  • Countries from where citizens migrate to United Kingdom: India, Poland, Pakistan, Ireland, Germany, South Africa, Bangladesh, the United States, Jamaica, Kenya

Based on the data presented above, it can be noted that the population growth in the UK is less as compared to that of the United States of America and Australia. Also outward remittances have been declining post 2007 for 2 consecutive years. One may attribute the steady drop in outward remittances to the economic slowdown in 2009. The labor force is much more as compared to Australia, but the GDP growth is rather slow. But, a noteworthy point is the stock of immigrants which stands at 6955.7 thousands.

Will this factor lead to a steady increase in remittances?

Germany

 

Population (2009)

 

81.9 million

 

Population growth (avg. annual %, 2000–09)

 

0.0

 

Labor force (2008)

 

41.4 million

 

GDP growth (avg. annual %, 2005–09)

 

0.5

IMMIGRATION, 2010

  • Immigrants: 10,758.1 thousands
  • Immigrants as percentage of population: 13.1%
  • Females as percentage of immigrants: 46.7%
  • Refugees as percentage of immigrants: 5.5%
  • Countries from where citizens migrate to Germany: Turkey, Italy, Poland, Greece, Croatia, the Russian Federation, Austria, Bosnia and Herzegovina, the Netherlands, Ukraine

Germany is ranked as no. 5 in the list of top remittance sending countries in 2009. It managed to accumulate 15.9 US$ billions as outward remittances. One very interesting fact to be noted is that Germany has more immigrants as compared to United Kingdom and Australia. There has been no growth in Germany’s population since 2000-09. Hence, one could assume the birth and death rates to be at par in this country.

Other interesting fact to be observed would be the ever-growing outward remittances. The remittances outflows were unaffected even during the economic slowdown in 2009.

Do you think that this trend of outward remittance would continue to grow from Germany?

 

The Boom in Remittances

What accounts for the rise in remittances? A combination of factors explains the growth of remittances into India, including some important government initiatives that have had significant impacts on their flow: –

 India’s extensive economic reforms of the early 1990s provide an important context. In 1990, India faced ‘balance of payments’ crisis. Its foreign currency assets were depleting and international confidence in Indian economy was eroding. In response, the government instituted a set of structural reforms. The resultant economic liberalization, which began in 1991. It progressively ended the state monopoly on a range of industries. It allowed foreign capital in most sectors of the economy and thereby lowered taxes and tariffs. These reforms opened new avenues for the Indian economy and presented India with a host of new opportunities.

 If the migration of skilled Indian workers to the Gulf was the dominant story of the 1970s and the 1980s, the migration of information technology (IT) workers, principally to the United States, has been the trend since the mid-1990s. Indian migration to the United States almost doubled in the 1990s. Indian software engineers became an important element of the US IT boom. This provided more scope for foreign currency in flows to India thereby increasing the amount of remittances.

 India’s progressive growth attracted money from NRIs. It provided both appreciation in assets such as property and stable interest rates on long term deposits.

The boom in remittances can be largely contributed to the above aspects.

For a decade we’ve seen steady appreciation and trends seems to continue.

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