Developing nations to lose remittances

GENEVA

Labor specialists here say the global economic crisis will cause a sharp drop next year in worker remittances - a major source of income for developing countries.

Ryszard Cholewinski, a labor specialist at the International Organization for Migration (IOM), said the fall will heavily affect countries including Mexico, India, Bangladesh and the Philippines.

The flow of remittances to developing nations - currently about $283 billion, according to the World Bank - could decline by up to 9 percent because of the global slowdown, he said.

India was the top recipient of remittances last year, amounting to $27 billion, or about 3 percent of its gross domestic product.

Remittances received by China reached $25.7 billion; the Philippines, $17.2 billion; and Bangladesh, $6.6 billion; according to the IOM’s “World Migration 2008” report.

Mexico got $25.7 billion in 2007, it said.

The gloomy economic outlook could dry up jobs in sectors that rely on migrant workers, such as construction (especially in oil-rich Persian Gulf nations), manufacturing, hospitality and tourism.

Health care and household domestic care are less likely to be affected, Mr. Cholewinski said.

About 10 percent to 15 percent of the more than 200 million migrants in the world today are categorized as irregular, Mr. Cholewinski said, adding that the majority enter a country legally and overstay.

The IOM said the downturn is likely to last through 2009 but turn around in 2010, assuming the global economy recovers.

In the long term, migration will expand because of globalization and demographic trends, such as lower birthrates in developed countries.

The forces of globalization “are changing the way enterprises do business, giving rise to more integrated labor markets and, consequently, creating demand for increased labor mobility,” the IOM report said.

Industrialized countries are “already competing for skilled migrants,” the report said, and low- and semi-skilled workers are also in demand.

According to the IOM - which has 125 member countries and is headed by an American, William Swing - in the next 50 years, rich industrial nations “will experience even greater [labor] shortages as birthrates fall … leaving twice as many people over 60 years of age than children.”

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