Samoa among region’s top three in remittances
Despite the havoc wreaked by COVID-19 pandemic, remittances “remained resilient in 2020” with Samoa among the Pacific region’s top three receiving nations, according to new information from the World Bank.
In a 12 May 2021 report, the multilateral financial institution stated that remittance flows remained resilient in 2020, registering a smaller decline than previously projected.
Officially recorded remittance flows to low and middle-income countries reached US$540 billion in 2020, just 1.6 percent below the 2019 total of US$548 billion according to the latest Migration and Development Brief.
Remittances to the Pacific region fell but Samoa, Tonga and the Republic of Marshall Islands were the top recipients in terms of the share of remittances in gross domestic product, the report says.
“Formal remittance flows to the East Asia and Pacific region fell by an estimated 7.9 percent in 2020 to around $136 billion due to the adverse impact of COVID-19," states the report.
"Positive growth in remittances from the United States and Asia helped to mostly offset declines from the Middle East and Europe, which fell by 10.6 percent and 10.8 percent respectively in 2020.
“The top recipients in terms of the share of remittances in GDP in 2020 include many smaller economies such as Tonga (38 per cent), Samoa (19 per cent), and Marshall Islands (13 per cent).”
For 2021, a modest growth of about 2.1 per cent is expected due to anticipated recovery in major host economies such as Saudi Arabia, the United States and the United Arab Emirates.
Remittance costs: according to the World Bank Remittances Prices Worldwide, the average cost of sending US$200 to the region fell slightly to 6.9 per cent in the fourth quarter of 2020.
The lowest-cost corridors in the region averaged 3 per cent for transfers primarily to the Philippines, while the highest-cost corridors, excluding South Africa to China, which is an outlier, averaged 13 per cent.
“As COVID-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank.
“Supportive policy responses, together with national social protection systems, should continue to be inclusive of all communities, including migrants.”