Migration to Europe, from the world over, can be traced back to as early as the late 19th and early 20th centuries. Europe has become a destination of choice and is home to millions of people, who are drawn by its picturesque landscapes, rich culture, topnotch education system and superior living and working environment. Europe today has a migrant population of more than 50 million people, from varied cultures and backgrounds, residing within its folds.
With the increasing number of expats coming into the region each year, it is not surprising that its remittance industry is also growing favorably, year on year. It is a known fact that remittances are directly proportional to migration, as expats are bound to send money to their families back home, at least 5-6 times a year, if not on a monthly basis.
At one point in time, solely a remittance receiving region, Europe is now a major sender of remittances to developing countries both within the continent and outside Europe. In 2014, it was estimated that Europe sent US$109.4 billion in remittances, of which about one-third (US$36.5 billion) remained within 19 countries in Europe, while two-thirds (US$72.9 billion) were received by over 50 developing countries across the globe.
*(Information excludes money going from high-income European countries to high-income countries)
Since Europe houses both, countries that send money as well as receive money, the region is categorized into two groups:
European sending countries – This includes 26 European countries (Andorra, Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Malta, Monaco, Netherlands, Norway, Portugal, the Russian Federation, San Marino, Slovenia, Spain, Sweden, Switzerland and the United Kingdom) with an annual gross domestic product (GDP) per capita above US$20,000 and the Russian Federation
European receiving countries – This includes 19 European countries with an annual GDP per capita below US$20,000. It has two groups, the 1st comprising of the 10 EU countries (Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovak Republic) and the 2nd group that includes the 9 developing countries in Eastern and southeastern Europe (Albania, Belarus, Bosnia and Herzegovina, Kosovo, the former Yugoslav Republic of Macedonia Montenegro, Republic of Moldova, Serbia and the Ukraine)
It is estimated that about 150 million people worldwide benefit from remittances coming from Europe.
So, how exactly are these millions of people benefitting from money transfers coming from Europe?
For millions of individual households remittances are the only source of income, therefore, they are a lifeline of sorts, helping in the upkeep of these families. Improved standards of living, education, health, sanitation and housing are the key benefits derived out of the international money transfers received by the beneficiary families.
Facts about remittance from Europe:
- According to the World Bank, in 2014, official remittances to developing countries stood at US$436 billion, of which, US$89 billion (20 percent) was contributed by Europe. An additional amount of US$20.5 billion was sent from Europe, but stayed within the region as it was received by the 10 EU countries that are no longer considered ‘developing’. These EU countries, however, have approximately 10 million families who still rely on remittances sent by relatives working in other European countries
- The top five countries that received remittance from Europe {Nigeria – US$7.4 billion, China – US$6.3 billion, Morocco – US$6.2 billion, India – US$5.7 billion and Uzbekistan – US$5.6 billion}, accounted for 42 percent of the total remittances sent from Europe to developing countries
- North Africa and Central Asia largely rely on remittances from Europe, namely from France and the Russian Federation, respectively
- 24 developing countries, primarily in Africa, Central Asia and the Near East, received more than half of their remittances from migrants living in Europe
- Remittance from Europe is benefitting a number of fragile states such as Afghanistan, Eritrea, Iraq, Mali, Sierra Leone, Somalia, Sri Lanka, Sudan, Syria and Yemen.
Going by the facts represented in this article, it is clear that Europe is an important part of the global remittance industry and remittances from the region play a vital role in the economic development of many a countries, worldwide. Although, it can be argued that remittances could be impacted this year, owing to the current economic crises faced by certain countries in the region, trends in the recent years suggest that despite a crisis, remittances remain resilient.
Read the article ‘Remittances to the rescue’ to get a perspective on the role remittances play during a crisis.
Note: All information in this article has been sourced from IFAD (International Fund for Agricutural Development) report – Sending Money Home: European flows and markets
