Expert Group Meeting on the Role of Workers’ Remittances in Development Finance
The Economic Development and Globalization Division is pleased to announce the organization on an Expert Group Meeting on the Role of Workers’ Remittances in Development Finance, which will be held during the period 28-29 September 2010 at the UN-House in Beirut, Lebanon.
Workers’ remittances represent a very important source of finance for developing countries. In the recent 10 years, workers’ remittances received by developing countries accounted for about one third of export earnings, more than twice private capital flows, almost 10 times official capital flows and more than 12 times official transfers. Data reported by central banks show that remittance flows to developing countries recorded $316 billion in 2009. The World Bank expects workers’ remittance to developing countries to increase by 6.2 percent in 2010 and to reach $335 billion, almost the same level of 2008.
According to a recent report prepared by the World Bank on workers’ remittances, there are 12 million foreign workers in the countries of the Gulf Cooperation Council (GCC), most of them from Asia and the Arab countries. The World Bank indicates that remittance outflows from the GCC continued to grow in 2009 by about 8 percent where total remittance outflows from the GCC reach $40 billion, with the UAE and Saudi Arabia sharing the bulk of it. According to the database of the World Bank, workers’ remittances received by some ESCWA member countries in 2008 amounted to around $8.7 billion in Egypt, $7.2 billion in Lebanon, $3.8 billion in Jordan, $3.1 billion in Sudan, $1.4 billion in Yemen, $850 million in the Syrian Arab Republic and $630 million in Palestine. These are in addition to informal transfers outside the banking sector and transfers in the form of household items. Lack of banking services on a large scale in rural areas led to greater dependence on informal means of sending remittance, which limits the efficient use of those remittances and their impact on the economy.
Remittances are usually spent on personal consumption such as food, clothing and housing; therefore they help in poverty eradication. But beyond the fact that remittance flows reduce poverty, remittance flows can be seen as very important source of external financing.