Monday 07, May 2018 by William Mullally

Remittances to Asia-Pacific reach $256 billion in 2017

 

In the UAE, official figures put remittances out of the UAE at $32.67 million in 2017, though the bulk of those remittances go to India.

Last year, migrant workers sent $256 billion to their families in the Asia-Pacific region, according to the report “RemitSCOPE - Remittance markets and opportunities – Asia and the Pacific” by the International Fund for Agricultural Development (IFAD).

In the UAE, official figures put remittances out of the UAE at $32.67 million in 2017, though the bulk of those remittances go to India.

“While remittances benefit about 320 million family members in the region, most of them in rural areas, remittance markets still need to transform to ensure that families can benefit fully from the flows,” said IFAD in a statement.

''The promise of technological innovation in the remittance marketplace could bring about a fundamental transformation for hundreds of millions benefiting from these flows. But this transformative change has not yet happened,” says Pedro De Vasconcelos, IFAD Senior remittance expert.

In addition, De Vasconcelos pointed out that outdated regulatory barriers on both sending and receiving ends result in higher and less transparent costs for the two billion transactions a year, most amounting to just $200 to $300 each. They also make it less likely and more difficult to convert remittances into savings and investment.

According to the report, the cost of sending money to the region has decreased by only 0.67 per cent since 2015, reaching 6.86 per cent in 2017. This is still more than twice the 3 per cent set for high volume corridors by the international community in its Sustainable Development Goals. Lower transfer costs mean more money available to families.

Transfer costs vary significantly across the region. Rates in small Pacific island states are higher at 8.9 per cent of the amount sent. In East Asia they are 8.26 per cent while corridors from the Russian Federation to Central Asia are extremely low at 1.21 per cent.

According to the report, cash-to-cash transactions remain by far the most common form of transfer. It is only recently that technology is beginning to move markets towards account-to-account transfers through digital operations. There are now more than 1 million payment locations through the region, reflecting a greater digitalisation of transactions.

But De Vasconcelos explains further efforts are needed. “For digitalisation of transfers to happen, regulators and private sector companies need to work further together to harmonise legal and regulatory frameworks between countries and support the design of products driven by customer needs,” he said.

  

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