First posted 01:09am (Mla time) April 01, 2006
Editor's Note: Published on page A1 of the April 1, 2006 issue of the Philippine Daily Inquirer
SINGAPORE—Migrant workers in high-income countries remitted a record of more than $167 billion to their families last year, a UN agency said as it called for measures to ensure the money is used for long-term development.
In countries including Bangladesh and the Philippines, annual remittances exceed official development aid and foreign direct investments, the UN Economic and Social Commission for Asia and the Pacific (Unescap) said in its latest report released here Thursday.
If remittances sent through informal channels are counted, the figures could rise by as much as 50 percent, the UN's economic and social arm said.
As of 2004, three of the top five remittance-receiving countries in the world were located in Asia-India which received $21.3 billion, China with $21.7 billion and the Philippines with $11.6 billion, the report said.
Bangladesh, Pakistan and Sri Lanka are also among the major recipients of remittances, while Cambodia, Laos, Burma, Nepal, Thailand and the Pacific island of Samoa benefit to a lesser extent.
The agency urged governments in recipient countries to cut the costs of sending money home and help the workers' families channel the funds into more productive endeavors.
Countries exporting migrant workers should also take steps to improve their skills and tighten policies to ensure they do not fall prey to unscrupulous recruitment agencies, Unescap said.
"Policy-makers need to recognize that remittances are private flows of money that need to be treated as such. Therefore, these flows should not be taxed," it said.
The money has already been taxed in the country of origin and imposing taxes will discourage workers from sending funds through the banking system, it added.
'Very high' fees
It noted that levies charged by remittance service providers "are very high," with fees for small transfers reaching as high as 10-15 percent.
"There is no doubt that more can be done to increase the volume of home remittances and to enable the recipients to use them more effectively," Unescap said.
"Additional measures should be taken to increase the access of poor migrant workers and their families to formal financial institutions."
Unescap urged banks in the workers' home countries to establish branches in host nations and allow micro-credit institutions and credit unions to transfer funds to rural households.
The agency also said governments should give the right information about job opportunities to prevent situations in which families borrow huge sums to send a worker abroad, only to discover that the earnings are not enough to recover the cost.
In the Asia Pacific region, Australia, Hong Kong, China, Japan, New Zealand, South Korea and Singapore are major sources of remittances for developing countries.
For Laos and Burma, neighboring Thailand is a key sources of workers' remittances, Unescap said.
Outside the region, Canada, the United States, Britain, France, Saudi Arabia and the Gulf States are the main source of foreign workers' remittances.
An increasing number of remittance-senders are women, it noted. Agence France-Presse