World Bank: $400 billion in remittances in 2012
World Bank: $400 billion in remittances in 2012
Developing countries are expected to receive more than US$400 billion in remittances in 2012, according to the World Bank Migration and Development Brief published last week.
Officially recorded remittance flows to developing countries in 2012 are estimated to reach $406 billion, an increase of 6.5 per cent from $381 billion in 2011, the brief said. Remittance flows to developing countries are now more than three times the of official development assistance. Considering unrecorded flows through formal and informal channels, the true of remittance flows is believed to be notably bigger, the brief said.
“Although migrant workers are, to a large extent, adversely affected by the slow growth in the global economy, remittance volumes have remained remarkably resilient,” said Hans Timmer, director of the bank’s Development Prospects Group.According to the World Bank’s Migration and Remittances Factbook 2011, the World Bank estimated that Cambodian migrants sent home $364 million in remittances in 2010.
A 2007 study by the International Labour Organization (ILO) on remittances from migrant workers in Thailand said the median amount of money sent home by Cambodian migrants in Thailand in the two years prior to the survey was 20,000 baht ($650). The figure is lower than the amount sent home by migrant workers from Laos and Myanmar, it said.
Ly Thay, senior vice president and head of operation division at ACLEDA Bank, said “we see that there is an increase of the remittance flow from Cambodian migrant workers abroad”.
“According to our notice, we see that there is the growth around 33 per cent if we compared the figures in 10 months of year 2012 to the whole year of 2011.” He said most of the remittance flow is from Korea.
Anna Olsen, technical officer at the ILO Triangle Project at the ILO regional office for Asia and the Pacific, said migrant workers from Cambodia travel predominately to Thailand and Malaysia and a smaller number to South Korea.
“Cambodia migrant workers work in factories in manufacturing, on plantations and in agribusiness, in construction, in the fishing industry and as domestic workers,” she said.
“There has been a ban on sending domestic workers to work in Malaysia since last year,” she added.
Olsen said the World Bank estimates there are 350,000 Cambodians abroad. But “given that many people migrate through irregular channels and data is not recorded about these migrations, it is impossible to say exactly how many Cambodians are working abroad,” she said.
The Migration and Development Brief also said remittance costs are still high, averaging 7.5 per cent in the top 20 remittance corridors, while the worldwide average cost is about 9 per cent.
Anna Olsen said one of the big challenges for Cambodians sending remittances through regular channels, like banks or money transfer businesses, is the lack of branches in rural areas, the costs involved and individual comfort with using these services.
“It seems that most migrants and their families are more accustomed to informal channels of sending money and remittances are often sent by a network of informal bankers based in Cambodia and the destination country, through middlemen or brought by the workers themselves,” she said. “Of course, this can be risky.”
The World Bank Brief said channeling international remittances through mobile phones has the promise to expand access and lower costs but it has yet to be fulfilled, despite skyrocketing mobile phone use in developing countries.
According to Anthony Perkins, CEO of mobile payment service provider WING, Cambodian migrant workers do not use WING from abroad to send money to Cambodia as WING does not have the regulatory approval to process inward bound international remittances.
“However, we are optimistic to obtain approval and start processing such transactions early next year to assist the NBC to formalise what is currently a very difficult channel to obtain accurate data for, particularly for cross-border remittances,” Perkins said.
“What we have seen in a few cases however are migrant workers coming across the border where possible with their cash and then using WING to transfer domestically at our nationwide network before returning across the border to continue their work,” he said.
“Obviously this is not ideal, but demonstrates a need for migrant workers to be able to send their money home to Cambodia safely and at a fair price.”
According to the World Bank Brief, remittance flows to developing countries are estimated to rise, reaching $534 billion in 2015.
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