Remittances to developing countries What goes up

Remittances rose in 2008. This year will be different

THINGS that grew rapidly in 2008 included home foreclosures, government deficits and the ranks of the jobless. More encouragingly, remittances to developing countries also expanded. The World Bank reckons that migrant workers sent $328 billion home to their families last year, 15% more than in 2007.

This continued growth is particularly striking because it came in a year when other private financial flows into the developing world declined dramatically. The net inflows of private capital to these economies dropped by nearly two-fifths, from $1.16 trillion in 2007 to $707 billion, as panicky rich-world investors turned inward and foreign banks became increasingly reluctant to lend across borders. Dilip Ratha of the World Bank wryly remarks that migrants are being “thrust into the role of a sort of lender of last resort.” Read more