Do you send money to Pakistan or your home country? Remittance is defined by Wikipedia as “a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland”.
Remittances flow into labor-exporting countries. More the labor, bigger the remittance’s volume!
A large part of the global economy is supported by remittances one way or the other.
There are two basic components of remittance. Let’s take a look.
The International Monetary Fund (IMF) defines remittances as the sum of two main components in their Balance of Payments Statistics Manual.
Compensation of employees: – “The income of border, seasonal, and other short-term workers who are employed in an economy where they are not resident and of residents employed by nonresident entities.”
Personal Transfers: – “These are all the current transfers in cash or in-kind made or received by residents (ne it migrants or non-migrants) from or to individuals in other countries (all current transfers between residents and nonresident individuals).”
According to the World Bank data, global remittances were expected to reach 702 billion USD in 2020, down from 719 billion USD in 2019 with a decrease of -2.4%, of that 540 billion USD were expected to flow into the third world countries down from 548 billion USD in the preceding year with a decrease of -1.6%. Money transfers to Pakistan some other countries are increased despite the prediction of a reduction.
Now let’s take a look at the world’s top recipients of remittances.
India: – India grabbed the first position with a whopping 83.1 billion USD, down by -0.2 billion USD from the year 2019. India’s large diaspora sends money to India online is a big factor behind this achievement.
China: – China grabbed the second position with 59.5 billion USD, down by -13.0 billion USD from the year 2019.
Mexico: – Mexico grabbed the third position with 42.9 billion USD, up by +9.9 billion USD from the year 2019.
Philippines: – Philippines grabbed the fourth position with 34.9 billion USD, down by -0.7 billion USD from the year 2019.
Egypt: – Egypt grabbed the fifth position with 29.6 billion USD, up by +10.5 billion USD from the year 2019.
Pakistan: – Pakistan grabbed the sixth position with 26.1 billion USD, up by a +17.4 billion USD increase in online money transfer to Pakistan from the year 2019.
France: – France grabbed the seventh position with .5 billion USD, down by -8.8 billion USD from 2019.
Bangladesh: – Bangladesh grabbed the eighth position with 21.8 billion USD, up by +18.4 billion USD from 2019.
Germany: – Germany grabbed the ninth position with 17.9 billion USD, down by –2.8 billion USD from the year 2019.
Nigeria: – Nigeria grabbed the tenth position with 17.2 billion USD, down by -27-7 billion USD from the year 2019.
Conclusion: – This latest list of countries with large diasporas spread across the world shows their people send money to Pakistan online and to their respective countries, which is why they are the top ten biggest remittance recipients in the world. And India’s huge population spread globally resorts to sending online money to India, thus making it hold the top slot on the list of remittance recipient countries of the world.