This presentation describes the remittance and development correlationship. It also provide some information about the remittance data sources and present Remittance flow trends.

1. Role of Remittance
in Development
Presented by: Mihir Adhikary
International Institute for Population Sciences

2. What is Remittance?
A remittance is a transfer of money, often by a foreign worker to an individual in their home
country. The term is derived from the word remit, which means to send back.
There are two types of foreign remittances — outward remittance and inward remittance.
Workers' remittances are a significant part of international capital flows, especially with
regard to labor-exporting countries.
Money sent home by migrants competes with international aid as one of the largest financial
inflows to developing countries.

3. Few facts about migration related to
Remittance
Three notable facts about migration are often drowned in the stringent debate surrounding
migration policies.
1. First, the contribution of migrants to their host and home countries is enormous.
2. Second, South-South migration is actually larger than South-North migration, implying
that not only emigration, but also immigration matters for the developing countries.
3. Third, internal migration is nearly four times the size of international migration and is
an integral part of an economy’s structural change and development process.
Yet, movement of people is rarely included in the development strategies of countries.

4. Why migration and remittance
matters?
Migration to a richer destination can provide a fast path to reducing poverty not only of the
migrant but also of the family members left behind. After migration, a person’s income
multiplies rapidly, often by a factor of 10, and the income gains are shared with family
members and friends back home through remittances.
These remittances are used for purchasing food, housing and health care for the family,
education for children, and business investments.

5. Continued..
Over time, migrants facilitate exports and imports between countries. The more skilled ones
also share their knowledge and expertise with people back home. Some of them return home
after years of working abroad, bringing with them skills and savings.
In the destination community, migrants provide cheap labour and scarce skills for their
employers and, over time, many of them invest in real estate, businesses and new
enterprises that create employment.

6. How remittance help in development?
Poverty elevation
A measurable portion of
countries GDP
New investments in small
businesses
Higher consumption
Improves credit constraints
And in many other ways (directly or indirectly)

8. Global inflow and out flow of
remittance (2018)

9. Top recipients of remittance (2019)

10. Trend in annual remittance flow in India
and it's share in GDP

11. Outflow of remittance towards LMICs

12. Remittances on track to overtake FDI
flows

13. Covid-19 pandemic effect
on remittance

14. Global remittance flows are expected to
fall 20% this year
Remittance flows are expected
to fall across all World Bank
Group regions, most notably in
Europe and Central Asia (27.5
percent), followed by Sub-
Saharan Africa (23.1 percent),
South Asia (22.1 percent), the
Middle East and North Africa
(19.6 percent), Latin America
and the Caribbean (19.3
percent), and East Asia and
the Pacific (13 percent).

15. Thank you
For your kind attention