In many countries, diaspora remittance play a big role in the economy because it forms part of the foreign earnings. According to IOM data, remittance flows in 2020 to low- and middle-income countries (LMICs) were projected to fall by 7.2 per cent to USD 508 billion because of the economic crisis caused by the COVID-19 pandemic which negatively affected wages and employment for migrant workers.
Among the key drivers for the steady flow of remittances in 2020 were migrants’ desire to help their families by sending money home and drawing on savings. In 2020, the top five recipient countries for remittances inflows in current USD were India (83 billion), China (60 billion), Mexico (43 billion), the Philippines (35 billion), and Egypt (30 billion). India has been the largest recipient of remittances since 2008, IOM data reveals.
In Finland, where the population of people of foreign background increased to 444,031 which accounts for 8% of the total population, remittance inflows have also increased. According to the Bank of Finland statistics, migrant workers in Finland are sending nearly ten times more money back home than 20 years ago, Yle report says.
The statistics indicates that remittance flows from migrants in Finland to their home countries to support their families was nearly 800 million euros which is three times bigger than Finland’s overseas aid.
A Philippino resident in Vantaa, Russel Bercasio told Yle that she sends more than half of her salary to the Philippines.
According to Yle, Kristiina Karjanlahti, an advisor at the Bank of Finland, said remittances from Finland have grown nearly tenfold since the year 2000, rising to 790 million euros in 2019.
The pandemic has not slowed remittance flows, which only dropped 1.6 percent last year from 2019, according to the World Bank. Economists now expect remittances to low- and middle- income countries to increase.
In Nigeria, Africa’s biggest economy, which has a sizable diaspora across the world, is by far the largest recipient of remittance flows with $23.8 billion in 2019 followed by Ghana ($3.5 billion) and Kenya ($2.8 billion). In South Sudan, remittances of $1.3 billion accounted for 34% of its GDP, the highest in the region.
