Despite the economic crises being experienced in many high-income countries, the remittances that migrants send back to low- and middle-income countries[1] show no signs of drying up. For more than 20 years, official development assistance has been lower than the total value of private remittances from migrants; since 2022, at the global level, these remittances have clearly exceeded foreign investment (in other words, productive investment), and this threshold was passed as early as 2017 if we exclude China from our analysis.
Remittances, Foreign Direct Investment (FDI), and Official Development Assistance (ODA) flows to low- and middle-income countries, 2000-2024
Remittances, FDI, and ODA flows to low- and middle-income countries, excluding China, 2000-2024
e = estimate; f = forecast for 2023 and 2024.
Source: “Remittances Remain Resilient but Are Slowing”, Migration and Development Brief, no. 38, June 2023, p. 10, World Bank.
The main recipients of these flows are India (US$111 billion in 2022), Mexico (US$61 billion), China (US$51 billion), the Philippines (US$38 billion), and Pakistan (US$29 billion). The countries most dependent on money from their diasporas are those where aid received from their nationals abroad represents a large share of GDP (gross domestic product). In 2022, Tajikistan was first in line (51% of GDP), followed by Tonga (44%), Lebanon (36%), Samoa, Kyrgyzstan, Gambia, Honduras, El Salvador, and Nepal.
Overall, financial flows to low- and middle-income countries increased rapidly in 2021 and 2022, by 10% and 8% respectively, as the COVID-19 crisis was receding. However, these flows are dependent on the economic situation in the countries where the migrants are located. Saudi Arabia is the third largest source country for remittances, after the United States and the United Arab Emirates.
