15 October 2019

A visual guide to remittances, the lifeblood of developing economie

John Letzing, Andrew Berkley

When Amnesty International interviewed Santhosh, a migrant worker from Kerala, India about his experiences in Saudi Arabia, he described 18-hour days at a metal fabrication company punctuated by beatings. After months of unpaid work, he fled without any money to send home to his wife, son and ageing parents.

Santhosh and others like him are willing to put themselves at risk because their loved ones rely so heavily on their foreign earnings. According to Amnesty, remittances account for nearly a third of Kerala’s net domestic product. While the individual amounts are often small, remittance payments can add up in a big way.

People working abroad sent more money home to low- and middle-income countries in 2018 than ever before, and the biggest individual chunk went to India: a total of $79 billion, equal to nearly 3% of the country’s GDP. The Philippines, meanwhile, received an equivalent of about 10% of its GDP in remittances. Excluding flows to China, remittances to low and middle-income countries in 2018 were significantly larger than the $344 billion in total foreign direct investment flows that year. This year, these remittances are poised to grow even further, to $550 billion - making them the single biggest source of external funding for recipient economies.


The World Economic Forum has used World Bank data to build a visualization of global remittance flows, to help convey both their magnitude and their necessity for the less-fortunate all over the world. India regularly tops the list of remittance-receiving nations due to its big diaspora and migrant workforce. The figure below illustrates remittance flows to India between 2010 and 2017, with each dot - white at its origin and green at its destination - equal to $1 million.

Remittance flows to India 2010-2017 (World Economic Forum, World Bank)

Vital for the Philippines

This year, the Philippines led an effort to adopt a UN General Assembly resolution marking the International Day of Family Remittances as a tribute to the roughly 10 million Filipinos working overseas (of a total population of roughly 107 million). The bulk of remittances to the Philippines tends to come from the US, Gulf states such as the United Arab Emirates and Qatar, and Asian countries like Singapore and Japan.

Remittance flows to the Philippines 2010-2017

Prohibitive pricing

The importance of remittances earned them a place in the United Nations’ Sustainable Development Goals. SDG 10 - which aims to reduce inequality within and between countries - includes a target to limit the cost of a remittance to less than 3% of the total sent, and eliminating remittance corridors where transaction costs are higher than 5%. Currently, remittance costs across many African corridors are more than 10%. That affects a vital lifeline for many countries in the region; remittances to sub-Saharan Africa increased by nearly 10% in 2018 compared with the previous year, to $46 billion, according to the World Bank.

Remittance flows to sub-Saharan Africa 2010-2017

Potential solutions

One way to reduce the costs of sending money home might be blockchain. Blockchain-based technology and digital currencies could theoretically make remittance transactions both cheaper (by cutting out middlemen), more convenient, and more accessible in areas that lack traditional financial services, particularly in Africa and South East Asia, according to the European Commission’s Joint Research Centre. The chart below shows remittance flows to Nigeria, overlaid with yellow bubbles representing the expanding number of Bitcoin-accepting venues in recent years:

Global flows

Worldwide there are an estimated 258 million people living abroad, and many are responsible for supporting loved ones back home. Significant numbers of these people face difficulties and dire consequences that go well beyond predatory financial fees. According to the Commonwealth Human Rights Initiative, between 2012 and mid-2018, 117 Indian workers died in Gulf countries for every $1 billion remitted home. Despite these challenges, remittance volumes are poised to grow further due to their essential (if often underappreciated) role in the global economy.

The World Economic Forum’s Transformation Maps contextualize global issues, industries and countries in an interactive tool. Many of the maps, including those on India and Migration, include data visualizations under the “data” tab. You'll need to register to view.

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