About 250 million people – or 3.4% of the world’s entire population - send their money home to friends, family, business partners or others. In many countries, remittance inflow outranks the amount that the country receives from both tourism and national exports combined. The funds build roads, establish schools, launch businesses, patch floundering ones, send children to school, feed and shelter families, establish hospitals and health care institution and so on.
The following five countries, at least, would flounder if not for remittance.
Five Countries That Thrive on Remittance
- Mexico is one of the largest remittance-receiving countries. According to the National Population Council, more than one out of ten Mexican families in approximately 1.3 million homes survive on remittance. In Feb. 2016, the central bank reported that the money sent home by Mexicans overseas hit almost $24.8 billion last year, overtaking oil revenues as a source of income for the first time.
- In India, remittance flow recently mounted to over 70 billion USD. In 2015, more than 25 million people send US$72.2 billion as remittance money, according to the Ministry of Overseas Indian Affairs (MOIA). The Indian government values the money to the point that the Reserve Bank of India considers such money tax-free since it is “maintenance of relatives”.
- Sri Lanka gets much of its profit from remittance that US migrant workers send home to their family and friends. In 2013, the Central Bank of Sri Lanka thanked foreign workers for helping the country wipe out its recent trade deficit with their remittance support, and for improving Sri Lanka’s foreign reserves that, to a large extent, rely on foreign aid.
- Pakistan continues to be one of the top 10 countries in the world to receive an attractive amount of remittance from migrant workers in key countries including the U.S. In 2015, the World Bank rated it as one of the top seven.
- In 2014, Nepal was rated the third largest recipient of remittances after Tajikistan and Kyrgyz Republic. Remittance helped Nepal recover from various crises that included an earthquake in 2015. Dilip Ratha, Manager of Migration and Remittances at the World Bank, thanked remittance for giving Nepalese shelter, food and education as well as helping them launch businesses. Remittance inflow has been credited for strengthening all sorts of industries in Nepal and for helping the country through cycles of recessions. In the last three years, remittance inflow to Nepal has exceeded the amount that the country received from both tourism and national exports combined.
The numbers are compelling. For 25 countries, remittances provide more than 10% of their GDP, aside from which expats also contribute a form of social remittance in the form of innovation that converts into business development. The money merges with the skill sets and ideas that expats picked up in their country of work and that they then transferred to their country of origin when they visited, chatted with family or friends, or retired.