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- W294321036 abstract "INTRODUCTION Remittances constitute an important portion of foreign currency flow across the borders involving approximately one in six of the world's population. Remittances to developing countries surged to $93 billion in 2003 a growth of over 200 per cent from 1990. According to a recent World Bank estimates more than 70 percent of this global movement went to developing countries. In 2006, the World Bank reported that remittances surged to approximately $206 billion. These growing flows of remittances have led analysts to conclude that the growth of remittances has exceeded private capital flows and official development assistance to developing countries. Among the regional recipients, Europe and Central Asia tops the list followed by East Asia and Pacific and South Asia (Table 1). Among individual countries, India tops the list of recipients followed by China and Mexico (Table 2). According to the Global Monitoring Report 2004 published by IMF, the main source of remittance continues to be the US where the rise in remittances coincided with the economic boom of the 1990s and the liberalization of the temporary migration (especially in the technology sector). Conservative estimates put the number of people receiving some form of economic benefit from remittances at one billion-almost one-sixth of the planet's population. World Bank estimates suggest that for every 10 percent increase in remittances to developing countries, the number of people living in poverty is reduced by 1.2 percent. A study by Taylor and Adelman (1996) found that for every dollar received in remittances, Mexico's gross national product increases by $2.69 for urban households and $3.17 for rural households. Immigrants in the United States sent $28.5 billion to Latin America and the Caribbean in 2003. The top three countries in Latin America to receive remittances from U.S. in 2001 were Mexico, El Salvador, and the Dominican Republic. A significant study conducted by the Inter-American Development Bank (IDB) in 2004 reveals that the Latin American-born adults who resided in the United States sent home approximately $30 billion during 2004. These remittances made up a corresponding 50-80% of the household incomes for the recipients. A general impression about remittance is that it is a phenomenon affecting poor countries. However, the data suggests that of the 10 largest recipients of remittances in the last decade (1992-2001), seven were OECD countries and two of the top five recipients were G-5 countries (Table 3). While the magnitude of remittances has been increasing and will undoubtedly remain significant for a long period of time in foreseeable future, the benefit of remittances to both origin and destination countries is not without controversy. Several studies have found that remittances do indeed help the recipient countries. For example, in 2000, the U.N. reported that remittances increased the GDPs of El Salvador, Jamaica, Jordan, and Nicaragua by 10%. According to the World Bank report, in 2004, remittances accounted for approximately 31%, 25%, and 12% of Tongans, Haitians, and Nicaraguans GDP, respectively. Remittances are said to be usually destined for relatively backward, rural regions that are most in need of development capital (Jones, 1998a:4). Jones (1998b) suggests that there is probably no other more bottom-up way of redistributing and enhancing welfare among population in developing countries than these remittances. Remittances appear to be a more effective instrument for income redistribution than large, bureaucratic development programs or development aid. Remittances are less subject to political barriers and controls compared to either product or other capital flows Studies by Gammeltoft (2002), Keely and Tran (1989), Puri and Ritzema (1999), and Ratha(2003) claim that remittances have proved to be less volatile, less procyclical, and therefore a more reliable source of income than other capital flows to developing countries, such as Foreign Direct Investment. …" @default.
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- W294321036 title "An Econometric Study of the Effect of Remittances on Inflation in India" @default.
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