Photo: blog.siasat.pk
By Isaac Cohen*
The World Bank has recognized as too pessimistic its projection of a fall in remittances to low- and middle-income countries, made at the start of the pandemic. The release last week of the Bank’s yearly Migration and Development Brief (34) reveals the total amount of remittance flows “reached $540 billion in 2020, 1.6 percent below the 2019 total of $548 billion.”
Despite the smaller decline, remittances remained the main source of foreign exchange for many of the recipient economies. Given a fall of 30 percent in foreign direct investment excluding China, in 2020, remittance flows exceeded both total foreign direct investment of $259 billion and total development assistance of $179 billion.
The major recipients of remittances in 2020 remained India ($89 billion), China ($60 billion), Mexico ($43 billion), Philippines ($35 billion) and Egypt ($30 billion). In Latin America remittance flows increased in 2020 by 6.5 percent to $103 billion, with Mexico leading, followed by Guatemala ($11.4 billion), Dominican Republic ($8.3 billion), Colombia ($6.9 billion), El Salvador ($5.9 billion) and Honduras ($5.6 billion).
As a percentage of Gross Domestic Product, remittances amount to more than 20 percent for El Salvador, Honduras, Haiti and Jamaica; around 15 percent for Guatemala and Nicaragua; and over 10 percent for the Dominican Republic.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
