The global refugee population in 2018 was 25.9 million. The number of international migrants was 272 million, or 3.5% of the world’s population. During the past two decades economic challenges have caused the vast majority of the world’s human migrations. Most of the world’s migrants originate in poorer countries. Prospects of higher wages and available employment opportunities motivate people to cross borders.
The economic impact of migration has been equally monumental. International remittances exploded from $126 billion in 2000 to $689 billion in 2018. Most of this wealth flows back to the underprivileged regions from where migrants originate. Remittances are an important driver of development in these areas.
The big picture
It is characteristic of remittances to flow to the regions which most need them. In 2018 remittances to India amounted to $79 billion. Countries like Pakistan, Sri Lanka, and Bangladesh achieve more than 5% of their annual GDPs through incoming remittances. In Central Asian countries such as Kyrgyzstan and Tajikistan remittances reduced the national poverty rate by nearly 6%. Remittances play a key role in the economies of developing countries in all of the world’s regions.
Twice the impact
Emigration reduces unemployment in countries of origin. Labor migration balances the labor surplus in one region with shortages in another. Moreover, incoming remittances contribute to local purchasing power and stimulate local demand in developing economies. This in turn results in creation of jobs and further decline in poverty. In this way migration has a dual benefit in combating poverty.
Toward economic equality
Violence and insecurity are drivers of migration from some world regions, such as parts of Central America and Africa. However, the most prevalent driver of migration worldwide is poverty. Most of the world’s migrants work in low skilled jobs such as labor. They prefer to stay close to their home countries. For example, large numbers of East Africans continue to migrate to GCC states on temporary employment contracts. Migration to the GCC from Southern Asia has also increased. Labor migration to the GCC is so prevalent that the population composition has completely changed. Migrants now constitute a majority of the population in all but a few of the GCC states.
South Africa attracts considerable numbers of migrants from nearby countries. As many as 4 million migrants now work in this small country. Most of the migration to EU member states originates from within the EU. The US is the top destination for migrants from the Caribbean and Mexico. More than 90% of migrants from Central America also move to the US. On another continent, the majority of Central Asian migrants work in Russia. Thus, worldwide migration trends in the unskilled and low skilled categories are highly regional.
These migrations result in the steady flow of wealth from more prosperous nations to their low and middle income neighbors. Therefore remittances steadily help fight economic inequality. Worldwide remittances slowly take the planet toward a more even distribution of wealth.
During recent years the world has seen events that caused major displacements of human populations. Unstructured and undocumented migration is a worldwide problem. It endangers migrants’ human rights and makes them susceptible to exploitation. Recently UN member states were able to finalize two landmark agreements – The Global Compact for Safe, Orderly and Regular Migration, and the Global Compact on Refugees. Hopefully these will help address migration effectively.
Another persistent issue is regarding the high cost of remittances. It is the world’s poor who still pay the highest price for sending money across borders. Remittance is an oft-discussed topic at the UN. Several of the UN’s annual reports point out that banks are the most inefficient and expensive remittance channels. On the other hand, versatile services such as Ria Money Transfer online are consistently cheaper and faster. It is a UN strategic development goal to reduce the cost of worldwide remittances. Improvements in remittance prices will help fight world poverty more effectively.
This post was submitted by Hemant G, a contributing writer at Sparkwebs LLC, a Digital and Content Marketing Agency. When he’s not writing, he loves to travel, scuba dive, and watch documentaries.