SINGAPORE (May 7): One out of every 10 people in Asia and the Pacific is directly affected by remittances, finds a study conducted by the International Fund for Agricultural Development (IFAD).

Based on the study’s key findings, almost 80 million migrants in the region remit money to their countries of origin to benefit an estimated 320 million family members, amounting to private financial flows that exceed more than 10 times net official development assistance (ODA) from all sources combined.

Family remittances to the entire Asia and Pacific region amounted to US$256 billion over 2017, whereas families receiving the money are able to save and invest up to 30% or US$77 billion of their remittances for asset-building, says IFAD.

In a report entitled RemitSCOPE – Remittance markets and opportunities – Asia and the Pacific, IFAD highlights Singapore, Malaysia, Hong Kong, Japan, South Korea and Thailand as major destination countries or areas for migrant workers, although transaction costs vary significantly.

Remittance service providers in Asia and the Pacific, specifically, are paid over US$18 billion a year to process about 850 million individual transactions.

In 2017, Singapore ranked fifth globally among the top 10 sending countries or areas and total amount sent with outbound remittances of about US$6.2 million compared to Hong Kong SAR, China at first place with US$17.1 million sent.

IFAD says that its report findings show cash-to-cash transactions remain by far the most common form of transfer, it is only recently that technology is beginning to move markets towards account-to-account transfers through digital operations.

There are now more than a million payment locations through Asia and the Pacific, reflecting a greater digitalisation of transactions in the region, it adds.

Pedro De Vasconcelos, IFAD Senior remittance expert, says although technological innovation in the remittance marketplace could bring about a “fundamental transformation for hundreds of millions benefiting for these flows”, this change has yet to happen due to outdated regulatory barriers on both sending and receiving ends.

These result in higher and less transparent costs, notes De Vasconcelos, which also makes it less likely and more difficult to convert remittances into savings and investments.

“More than 4 billion people live in the remittance-receiving countries of the Asia and the Pacific region. Cash-to-cash is not inevitable, and countries and families are not fated to be ‘remittance reliant’ forever. In fact, none of these countries proudly proclaims the level of its reliance on remittances. Remittance-reliant countries would prefer to be able to generate enough economic opportunity domestically to reduce the pressure on their citizens to migrate,” observes IFAD in its report.

“Leveraging the impact of remittances can help achieve that goal. If change is to lead to fundamental transformation, and the sustainable development goals (SDGs) are to be achieved, it must happen in the Asia and the Pacific region.”