Sending money ‘home’ is big business


by Sunny
18th November, 2005 at 2:44 am    

We all know people who ‘send money back home’ to their country of origin. Ok, I don’t but I’m sure you do. Hopefully. Care to guess how much it adds up to? $232 billion dollars annually. That’s right, billions, according to a World Bank report published yesterday.

You may yawn and think “and what?”, but this means a lot. The World Bank is interested because $160 billion of that $232 billion goes to developing countries. That is more than twice the level of development aid they get from all sources. Those big bucks means a lot to them. And guess who is on top of the list.

The countries receiving the most in recorded remittances are India ($21.7 billion), China ($21.3 billion), Mexico ($18.1 billion), France ($12.7 billion), and the Philippines ($11.6 billion). Those for which remittances account for the largest proportion of gross domestic product are Tonga (31%), Moldova (27.1%), Lesotho (25.8%), Haiti (24.8%), and Bosnia and Herzegovina (22.5%).


There are other very interesting other conclusions the WB makes.
1) The report says greater emigration of low skilled emigrants from developing to industrial countries could make a “significant contribution” to poverty reduction.

2) An increase in the number of migrants which raises the work force in high income countries by three percent by the year 2025, could increase global real income by 0.6 percent or $356 billion.

3) The gains would then be high for developing countries – so much so that they would rival the potential gains from increased global trade.

4) Remittances through informal channels could add at least 50 percent to the official estimate, making remittances the largest source of external capital in many developing countries.

It also siginificantly dents the idea that all these countries only survive through international handouts.

The report argues the most feasible means of increasing such emigration would be through managed migration programs between the developing and developed countries, which combine temporary migration of low skilled workers with incentives for return.

Migration is truly a global phenomenon,” said Dilip Ratha, one of the co-authors of the report. “Many countries, both developed and developing, both send and receive migrants, and both send and receive remittances.”

I read an article few years ago stating that money sent to Bangladesh by British Bengalis was estimated to be twice its foreign aid. I’m surprised Pakistan and Bangladesh are not on that list, and it is probably due to the report’s global than UK focus.

As a university project or something it would also be interesting to see how much assistance British Pakistanis provided for the recent earthquake in money and actual help.

The report also asks the companies facilitating money transfer to reduce their charges but I doubt the bastardos from Western Union will care.


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Filed in: Economics,South Asia






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  1. Bikhair — on 18th November, 2005 at 3:43 am  

    Big up Haiti! Woop Woop!

  2. blue mountain — on 18th November, 2005 at 8:02 am  

    Never trust a World Bank and IMF report.Remember how they fucked up Latin Americans and the role they played in South East Asian Crisis in 1997. As the Chinese and South Koreans have repeated shown that you must do the opposite to what the World Bank and IMF people say.

    This report forgets to mention a vital fact. From a UN report More wealth get remitted from developing countries to developed countries not the other way round Every economist knows this fact and still keep mum.

  3. blue mountain — on 18th November, 2005 at 8:09 am  

    They want you NRI people feel good about the great remittances and the favour your host country is doing by giving you the opportunity to do the same.

  4. Vikrant — on 18th November, 2005 at 8:12 am  

    Hooray our Indian diaspora has outclassed even the mighty Chinese diaspora.

  5. blue mountain — on 18th November, 2005 at 8:20 am  

    Not so fast dude…

    Chinese diasopora is the largest FDI investor In China outclassing the mighty US and European countries. The reason they are second because i guess that are consuming all money in China itself helping it to become a first world nation.

  6. Vikrant — on 18th November, 2005 at 9:23 am  

    hmm… i forgot to add… Hooray our Indian diaspora has outclassed even the mighty Chinese diaspora atleast at some thing.

  7. Jay Singh — on 18th November, 2005 at 9:52 am  

    Punjab in India is a relatively prosperous state compared to the rest of the country and much of the prosperity you see is as a result of Sikhs oversees sending money back ‘home’ to help their families.

  8. rizwand — on 18th November, 2005 at 11:21 am  

    Whoah, I didn’t realise the sums were so great. Of course, if you think about it there are so many immigrants saving every penny possible to give their families back home a better life.

    Blue Mountain, I’ll agree that the IMF and WB played a hand in screwing up the development of many countries but that doesn’t mean everything they say or do is wrong.

    You say a UN report says : More wealth get remitted from developing countries to developed countries not the other way round. Please can you provide a link to this report. I am sure the definition of remitted wealth will be different and would like to reconcile the two.

    Thanks

  9. blue mountain — on 18th November, 2005 at 12:41 pm  

    Damn. I cant find it. The UN site is such a nonsense. Probably Kofi Annan is too busy seeking a job for his son.I read in the Economist

    Of course “wealth” includes natural resources,banking credit, Investments of Central Banks of Developing countries like Reserve Bank of India, People’s Bank of China in US treasury bonds etc.

    ….but that doesn’t mean everything they say or do is wrong.

    I agree.Avail credit facility from them and repay on time but never listen to them like India and China does.

  10. blue mountain — on 18th November, 2005 at 1:10 pm  

    No Jay Singh

    Malayalis beat Sikhs in this remitance game.

  11. Vikrant — on 18th November, 2005 at 1:43 pm  

    guys guys lets not descend into crude jingoism..
    Jay Singh, states like Maharshtra,Gujarat, Karnataka (pardon me if i missed a few), are way ahead of Punjab in industrialisation,education and sex ratio. I read somewhere that these states are reponsible for 76% of all taxes going to New Delhi. A certain city called Mumbai cotriutes 42% of all corporate taxes collected in India. Oh yes Indias incredible foreign exhange rate is because of both Malyalis in Gulf and Punjabis,Gujaratis in UK and US.

  12. Sunny — on 18th November, 2005 at 1:43 pm  

    Bluey – How does wealth go from developing to develped countries? It could be that the profits that multi-nationals make get sent to the country of origin, but in real terms that wouldn’t be much, and would be overshadowed by FDI.

  13. blue mountain — on 18th November, 2005 at 2:00 pm  

    Nope. Iron ores, coal and virtually all raw material and agricultural products get transported from developing countries to developed countries who add value to the raw products and corner all profits.

    America is the largest recipient of FDI.

  14. blue mountain — on 18th November, 2005 at 2:08 pm  

    All West European Countries impose nil duty on raw cocoa necessarly to produce chocolate but there is a hefty duty on finished chocolates. Why ? They dont want African’s to produce Chocolates. They are happy letting African be farmers forever !!!

  15. Sunny — on 18th November, 2005 at 3:00 pm  

    Yeah i see that point, but if a country does not have the processing capacity, or the skills to use the raw material – it will be exported.

    Look at China now. It’s built the capacity, and now makes most of the world’s clothes..

  16. blue mountain — on 18th November, 2005 at 3:11 pm  

    India is not far behind. It will too capture a good slice of global textile market after the dismantling of quotas.

  17. Rohin — on 18th November, 2005 at 4:59 pm  

    It’s pointless to speculate on which state sends most money back. India is one country, let’s not divide ourselves along yet MORE lines. Oooh we’re more prosperous than you ner ner ner (etc).

    I wonder what proportion of the money going to India gets channeled into fundraising for Khalistan/RSS/VHP/SS/any number of Islamist groups?

  18. Vikrant — on 18th November, 2005 at 5:33 pm  

    good job Rohin! Putting, Islamists Kahlistanis and RSS under one category. Others are sepratist-terrorists RSS isnt. I’m not defending Gujarat, Ayodhya and other stupidity indulged in by RSS but they have done some good things. Oh yea they’re communal, which Indian political party isnt? Left parties which continually bat for Islamists (why are Taslima Nasrin’s books banned in Bengal?) or Congress whih i daresay does have blood on its hands are never singled out for condemnation.. why RSS?. Though most Hindutva guys are pure bullshit RSS sometimes talks sense like with Vanvasi Kalyan Ashrams.

  19. Rohin — on 18th November, 2005 at 6:33 pm  

    That comment cocked up. The quote went missing. They can’t do maths:

    “Sudarshan leaned on some bizarre mathematics. He said that a couple with 12 sons were likely to be survived by a 1,200-strong progeny after 120 years. The one with 11 sons would have 1,100 successors. Those with three sons, would have 38 descendants, while couples with two sons would show a zero increase. ”

    And Narendra Modi (care to defend him?) is a former pracharak of the RSS.

    Oooh and the RSS joined hands with the VHP to launch the ambitious Sabhari Kumbh.

    Let’s not beat around the bush. Just because some positive characters like Vajpayee have been RSS members, they’re no saints.

  20. Vikrant — on 18th November, 2005 at 6:37 pm  

    O yea lets points out RSS’s rubbishness and laugh at them the silly barbarians… Its just the case of tongue shooting faster than their brains. But still they DO sometimes make valid points (remeber Shah Bano?
    My point is why is RSS singled out for condemnation here. If JW’s selective condemnation of Islamists is xenophobia to many here, then isnt it exactly what your doing… If i condemn the Islamists or Leftists i guess i’m a some sort of Islamophobe.

    Again dont lefties qualify for “tits” with their support for Iran and all the heck they raised up on the issue of Indo-American air exercises. Arent they responsible for wholescale demographic invasion of border districts of West Bengal and Assam.. lastly why was India the first country to ban Satanic Verses or Taslima Nasrin’s books.

    Mister it you whos beating round the bush. Indian “secularists” are upto no good. Lets accept the fact that ALL Indian political parties have their own regional, religious or casteist agenda and move on.

  21. Vikrant — on 18th November, 2005 at 6:39 pm  

    Who says Sudharsan knows maths… but equating him with likes of OBL and Imam Bukhari is stupid.

  22. Rohin — on 18th November, 2005 at 7:12 pm  

    Snore…Yes plenty of Indian politicians are tits, from all walks of life. The simple point I was making is that when it comes to groups with outlandish views, much of the cash comes from the NRI diaspora. I personally know of a few large student groups who have raised money in the UK purportedly for ‘good causes’ which has been sent to the VHP. Again, the VHP – like the RSS – have some good initiatives. But how do I know where my money is going when I send it to them? If we can’t trust Oxfam then how can we have faith that Indian politicians are going to use this money altruistically?

    I don’t know why India was the first to ban the Satanic Verses, but I feel you’re asking it in a rhetorical manner, so can you tell me?

    I could’ve included commies, Maoists, the LTTE etc in that list, but it wasn’t meant to be exhaustive. At no point did I equate Sudarshan with OBL.

  23. Sunny — on 19th November, 2005 at 2:20 am  

    Yes there are apologists in India, but considering there is a 127 million population of Muslims in India, you can imagine there would be a lot of unrest over a book that was essentially, unremarkable.

    Not that the Hindutva record is any good, they forced the Oxford PRess to not publish that book Shivaji last year, right? The fact is, religious politics in India are still all over the place.

    Everyone has the right to point fingers at each other, I’m not really going to take sides. The bloody commies are as bad as the Hindu right, which are as bad as the Muslim right (in India).

  24. blue mountain — on 19th November, 2005 at 5:14 am  

    Yeah i see that point, but if a country does not have the processing capacity, or the skills to use the raw material – it will be exported.

    Not necessarily. In a globalised world you dont need to have your own skill to make money.Suppose an Indian or Chinese entrepreneur says to an African Government I will use your raw materials employ your people give you one third of my profits as taxes in addition to other taxes give African shareholders dividend but you try to give me access to markets…Will the Europeans open their markets for such African products?

    This is what the fuss over agricultural subsidies about

  25. blue mountain — on 19th November, 2005 at 5:42 am  

    I don’t know why India was the first to ban the Satanic Verses, but I feel you’re asking it in a rhetorical manner, so can you tell me?

    This is because some educated muslim intellectuals informed their mullahs that if this book is allowed to remain in print the entire religion of Islam would be under threat. The mullah started road demonstrations and threatened Congress(I) that muslims wont vote for Congress and there would be a fatwa against it unless this book is banned. Congress(I) and Rajiv Gandhi panicked and capitulated as they did with Shah Bano case.The left parties actively supported Congress on banning of the book as they did with Tasleema nasreen’s books later.

  26. blue mountain — on 19th November, 2005 at 5:46 am  

    If this is the record of so called “progressive” parties why blame bigots like Shiv Sena and VHP ?

  27. Vikrant — on 19th November, 2005 at 7:13 am  

    Not that the Hindutva record is any good, they forced the Oxford PRess to not publish that book Shivaji last year, right?

    You are dead wrong again dude… those protests against Shivaji book were handiwork of Sambhaji Brigade which is NOT A HINDU ORGANISTAION They’re followers of some new religion called “Shiv Dharma”.

    check out this link:http://www.the-week.com/24apr25/currentevents_article1.htm

    They also mention Laine somewhere in the middle.

  28. Vikrant — on 19th November, 2005 at 7:14 am  

    http://www.the-week.com/24apr25/currentevents_article1.htm

    for those of u lazy enuf not to copy and paste.

  29. blue mountain — on 19th November, 2005 at 7:17 am  

    This report is dubious. What the fuck France is doing in the list ? Why would it be one of the largest receipient of foreign remittances ? Considering the number of immigrants,remittances should flow out of France .

    If France is way up there what prevents other industrialised nations like Germany, UK,Canada,Italy etc. from being there in the list ?

  30. Vikrant — on 19th November, 2005 at 7:18 am  

    Your mentioning of Muslim right implies that theres a Muslims left which sadly isnt the case. Indian Muslims remain a captive of mullahs and imams for leadership.

  31. Vikrant — on 19th November, 2005 at 7:19 am  

    2:20 am !! Sunny me boy do you ever sleep?

  32. Sunny — on 19th November, 2005 at 1:46 pm  

    those protests against Shivaji book were handiwork of Sambhaji Brigade which is NOT A HINDU ORGANISTAION They’re followers of some new religion called “Shiv Dharma”.

    I’m pretty sure the Shiv Sena were involved, otherwise there wouldn’t have been a ban. Anyway, if they call themselv Shiv Dharma, its a good chance they’re an ofshoot sect right? Who says they’re not Hindu?

    Indian Muslims remain a captive of mullahs and imams for leadership.
    Gross exaggeration and you’re assuming you know all Indian Muslims and how they think.

  33. Vikrant — on 19th November, 2005 at 1:47 pm  

    Care to read my link?

  34. Vikrant — on 19th November, 2005 at 1:49 pm  

    BTW The ban was put up by Congress/NCP govt. in the state not SS. SS is now like a tootless tiger.

  35. Vikrant — on 19th November, 2005 at 1:51 pm  

    Shiv Dharma explicitly states that it is an anti-Brahminical religion with Jijabai and Shivaji as their main deities. They dont believe in Hindu Vedas, Trimurti… lets take their word for it… they arent Hindus.

  36. Sunny — on 19th November, 2005 at 1:57 pm  

    Khedekar asserted that their embracing Shiv Dharma cannot be termed as conversion. “Hinduism is not a religion, it is a way of life,” he said. “So it will be wrong to say that we will be converting. We just want to form our religion.”

    That’s what I meant. These guys ain’t becoming non-Hindu, they’re just rebelling against Brahminism.

  37. Vikrant — on 19th November, 2005 at 2:20 pm  

    1stly… Shiv Dharma has Muslim members also as the article states. So they arently a Hindutva group.

    2nd.. these guys dont believe in Vedas nor Puranas , nor trimurti so they arent Hindus/Sanatanis by definition.

  38. Sajn — on 19th November, 2005 at 11:42 pm  

    Didn’t Rushdie also have problems in India over Midnight’s Children? And with Bal Thackeray over another book?

  39. Vikrant — on 20th November, 2005 at 1:31 am  

    Well with Midnights Children i think the problems were due to a character remniscent of Indira Gandhi in the books. The book also talks about Nehru’s probable illegitimate child… Blashphemy the Congressmen cried. Man but the book was a runawayhit in India. I think same goes with Moors Last Sigh and Bal Thackeray who was understandably angry at Rushdie for demonising him out of proportions. For many he is a Hitler but i think SS was a legitimate outlet of dissent by a people who have been turned into a minority in their own land and have been forced upon to adopt an alien culture.

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