Immigration’s Cash Rewards

Immigration is a fraught issue around the globe, dominating headlines and many campaign platforms, and migrants are often the target of xenophobia and anger. But while this tense talk about migrant workers is often centered on the journey or the arrival, the money sent by these migrants back to their native countries is reaching record amounts and providing undeniable benefits.

These money transfers, or remittances, have become so common that new data shows low- to middle-income countries depend primarily on them, rather than on foreign direct investment, to sustain their gross domestic product. Indeed, foreign direct investment to these countries has been decreasing since the beginning of the decade. According to a study released by the World Bank in August 2018, the decline reflects “persistent weak aggregate demand, sluggish growth in some commodity-exporting countries, and a slump in profits earned by multilateral enterprises.”

According to the World Bank’s latest Migration and Development Brief, global remittances to low- and middle-income countries reached a record high in 2018, totaling $529 billion. Remittances to these countries are expected to reach $550 billion in 2019.

The World Bank’s report credits two developments for why remittances are thriving: a strong economy in the United States and a rebound in money being sent from Gulf Cooperation Council countries as well as Russia. Migrant workers have been drawn to the Gulf countries by rising oil prices and to Russia by the country’s economic recovery, the report says.

Foreign Policy has mapped out the 10 countries both receiving and providing the greatest amount of remittances. Zoom in and out on the map to view remittance data for different countries. Smaller circles with paler colors reflect smaller remittances.

The top remittance recipient for 2018 was India, which received $78.6 billion. This was driven partly by the response to the flooding disaster in the southern state of Kerala that year, according to the report.

The United States was far and away the biggest remittance contributor. The $68 billion sent by migrant workers in the United States to other countries in 2017* was about $24 billion more than the next-largest contributor, the United Arab Emirates.

China is the only country that ranked as both a top 10 remittance recipient and source. China’s presence as a top outflow country can be credited to the money sent to Chinese expatriates working for multinational companies, according to the World Bank.

Underlying the remittance market is the structure set in place for workers in one country to transfer money to another. Ease of transfer and the amount of remittances tend to go hand in hand. The fees vary widely both by region and country. In many cases, the countries chosen by migrant workers are those with favorable remittance fees.

In sub-Saharan Africa, for instance, the remittance fees are generally the highest in the world, especially between other African countries. This discourages poor workers unable to access banking services from sharing their earnings with residents of other African countries. On the other hand, three of the cheapest remittance flow corridors in this region start in France. A worker sending money from France to Cameroon pays a fee of less than 5 percent—less than a quarter of the fees one would pay to send money from Angola to Namibia.

France, incidentally, is the ninth largest contributor of remittances.

*2017 is the most recent year available for data on outward remittances.