A report released on 12 May by the World Bank showed that remittances from Kuwait in 2020 rose by nearly 20 percent compared to 2019 despite the coronavirus (Covid-19) pandemic. However, remittances from Kuwait to the Philippines decreased by approximately 5 percent in the last quarter of 2020 compared to the same period in 2019 due to lower oil prices and the repercussions of the Coronavirus, Al Rai daily reported.
Unlike Kuwait and Saudi Arabia, remittances from Qatar plunged last year compared to 2019, and also declined in the UAE.
According to the World Bank, the average cost of remitting $200 between countries in the Middle East and North Africa decreased in 2020, and remittances from Kuwait to Egypt was the cheapest within the region last year. In contrast, the remittance route from Jordan to Syria was the most expensive within this region.
On the other hand, the United States remained the largest source of remittances in 2020, followed by the UAE, then Saudi Arabia, followed by Russia.
Remittances to the Middle East and North Africa region grew by 2.3 percent to about $56 billion in 2020. This growth is mostly due to strong remittance flows to Egypt and Morocco. In 2021, remittances to the region could increase by 2.6 percent thanks to slight growth in the euro and weak inflows from the Gulf Cooperation Council countries.
Regarding remittance costs, the cost of remitting $200 to the region decreased slightly, to 6.6 percent in the fourth quarter of 2020. Costs vary widely between remittance routes, as the cost of sending money from high-income OECD countries to Lebanon remained. Mostly too high to exceed 10 percent. On the other hand, the cost of sending money from the Gulf Cooperation Council countries to Egypt and Jordan is about 3 percent in some remittance routes.
The World Bank said that despite the coronavirus (Covid-19) pandemic, remittances remained resilient in 2020, registering a lower decline than previously indicated. The most recent World Bank summary on migration and development shows that officially recorded remittance flows to low- and middle-income countries reached $540 billion in 2020, just 1.6 percent lower than the total of $548 billion in 2019.
The decline in remittance flows recorded in 2020 was lower than the level recorded during the 2009 global financial crisis (4.8 percent). It was also much less than the decline in FDI flows to low and middle-income countries which – when excluding flows to China – fell by more than 30 percent in 2020. As a result, remittance flows to low and middle-income countries exceeded the volume of foreign direct investment (259). $ 1 billion) and foreign development aid ($ 179 billion) in 2020.
Among the main factors of the steady flow of remittances were stimulus fiscal measures that led to better-than-expected economic conditions in most host countries, a shift in flows from cash to digital payments, and from informal to formal channels, and cyclical movements in oil prices and exchange rates. Coins. The true volume of remittances that include formal and informal flows is believed to be greater than what officially recorded data indicate, although ambiguity still surrounds the size of the impact of the Coronavirus pandemic on informal flows.
With global growth expected to recover in 2021 and 2022, remittances to low- and middle-income countries are expected to increase by 2.6 percent to reach $ 553 billion in 2021, and 2.2 percent to $ 565 billion in 2022. Even though many high-income countries have made great progress in vaccinating their populations, the virus infection cases remains high in many large developing countries and the prospects for remittances remain surrounded by uncertainty.
The global average cost of sending $200 remained high at 6.5 percent in the fourth quarter of 2020, more than twice the 3 percent target in the Sustainable Development Goals. The lowest average cost of remittances was in South Asia (4.9 percent), while Sub-Saharan Africa continued to have the highest average cost (8.2 percent). Supporting remittance infrastructure and keeping remittances flowing includes efforts to reduce fees.
SOURCE ; TIMES KUWAIT