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Foreign workers in the U.S. send billions home

Adam Popescu Jun 3, 2011

The Middle East received an estimated $3.8 billion in remittances from the United States in 2009, according to the World Bank.

Remittances are transfers of money by foreign workers to their home countries. It is private giving, separate from any government aid the country might receive.

In these uncertain financial times, the bulk of remittance funds are sent from the developed world to the developing world. The World Bank reported an estimated $316 billion in remittances reached the developed world in 2009. These funds help support basic needs and create economic growth.

Total remittances worldwide from individuals, families and hometown associations from the U.S. to the developing world reached $90.7 billion in 2009, a slight decrease from $96.8 billion in 2008, according to the Hudson Institute’s 2011 Index of Global Philanthropy and Remittances, which uses World Bank data.

Remittances make up the largest financial flow from the United States to developing countries, three times larger than official U.S. aid and 40% of total U.S. financial flows to the developing

View a map of the Middle East with a country-by-country breakdown of U.S. remittance. View the map.

The largest regional percentage of U.S. aid went to sub-Saharan Africa, with 38.9%, followed by South and Central Asia with 22.8%, and the Middle East and North Africa with 21%.

However, these numbers are estimates, far from an exact science. Total numbers fail to capture the true flow of global remittances. Not included are monies traveling through undocumented channels like hand delivery, or the South Asian hawala system of informal currency-transfer agents.

Funds sent through financial hubs like London or Dubai are also undocumented, avoiding fiscal transfer restrictions levied by some countries, and inclusion in remittance data sets.

Credible national data for remittance is for the large part unavailable because countries do not publish how much they receive. Institutions like the World Bank use the data available to them, going backwards to calculate individual country figures, according to Sanket Mohapatra, an economist with the migration and remittance team at the World Bank.

“National data on bilateral remittances are usually not available for most countries,” Mohapatra told Marketplace. “Even when they are reported by some countries, they are not always accurate. For example, funds channeled through American banks may be attributed to the United States, which often happens.”

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