Daily News Analysis

Remittances    

18th November, 2021 Economy

Figure 1: No Copyright Infringement Intended

Context:

  • India, the world’s largest recipient of remittances, received $87 billion in 2021 with the United States being the biggest source.

 

Further Details:

  • India is followed by China, Mexico, the Philippines, and Egypt.
  • remittances are projected to grow three per cent in 2022 to $ 89.6 billion.
  • Flows to India (the world’s largest recipient of remittances) are expected to reach $ 87 billion, a gain of 4.6 per cent.
  • Remittances to low- and middle-income countries are projected to have grown a strong 7.3 per cent to reach $589 billion in 2021.
  • Remittance flows from migrants have greatly complemented government cash transfer programs to support families suffering economic hardships during the COVID-19 crisis.

About Remittances:

  • A remittance is money sent to another party, usually one in another country.
  • The sender is typically a foreign worker and the recipient a relative back home.
  • Remittances represent one of the largest sources of income for people in low-income and developing nations, often exceeding direct investment and international development assistance.

 

Role of Remittances:

  • Remittances play an increasingly large role in the economies of small and developing countries.
  • They also play an important role in disaster relief, often exceeding official development assistance (ODA).
  • They help raise the standard of living for people in low-income nations and help combat global poverty.
  • Remittances are also used to help those living in less developed nations open bank accounts, a trend that helps promote economic development.

 

About World Bank

About

·        global partnership of five institutions working for sustainable solutions

Name of the Five Institutions

·        International Bank for Reconstruction and Development (IBRD): provides loans, credits, and grants.

·        International Development Association (IDA): provides low- or no-interest loans to low-income countries.

·        International Finance Corporation (IFC): provides investment, advice, and asset management to companies and governments.

·        Multilateral Guarantee Agency (MIGA): insures lenders and investors against political risk such as war.

·        International Centre for the Settlement of Investment Disputes (ICSID): settles investment-disputes between investors and countries.

 

Initiation

  • The Bretton Woods Conference held in 1944, created the International Bank for Reconstruction and Development (IBRD) along with the International Monetary Fund (IMF).
  • The IBRD later became the World Bank.

 

Members

189 Countries

Major Reports

·        Ease of Doing Business.

·        Human Capital Index.

·        World Development Report.