“Inflows from abroad are an important source of income for millions of families in developing countries. As such, a weakening of remittance flows can have a serious impact on the ability of families to get health care, education or proper nutrition,” Acting Director of the World Bank’s Global Indicators Group, Rita Ramalho said.
However, in keeping with an improved global economic outlook, remittances to developing countries were predicted to recover this year by an estimated 3.3 percent to $444 billion in 2017.
“The global average cost of sending $200 remained flat at 7.45 per cent in the first quarter of 2017, although this was significantly higher than the Sustainable Development Goal (SDG) target of three per cent. Sub-Saharan Africa, with an average cost of 9.8 per cent, remains the highest-cost region.
“A major barrier to reducing remittance costs is de-risking by international banks, when they close the bank accounts of money transfer operators, in order to cope with the high regulatory burden aimed at reducing money laundering and financial crime. This has posed a major challenge to the provision and cost of remittance services to certain regions,” it added.
The report further noted that several high-income countries that are host to many migrants were considering taxation of outward remittances, in part to raise revenue, and in part to discourage undocumented migrants. However, taxes on remittances are difficult to administer and likely to drive the flows underground.
On the global migration crisis, the report noted that between 2015 and 2016, the number of refugees in the 28 European Union countries increased by 273,000 to 1.6 million.
During the same period, the number of refugees worldwide increased by 1.4 million, to 16.5 million.
In a special feature, the Brief stated that the absence of a formal definition of the Global Compact on Migration, and advances a working definition of “an internationally negotiated framework for governments and international organisations to harness the benefits of migration while navigating its challenges.” It called for regional and bilateral agreements that address migration, to develop a normative framework or guidelines for governments and international organisations.