Remittances to South Asia boost size of middle class

PHOTO: Remittances to South Asia boost size of middle class

The vast amount of money sent back to families by South Asians working overseas is boosting the ranks of the middle class in those home nations, according to a senior banker.

Former World Bank vice-president Shahid Javed Burki said there is an "enormous amount of wealth" in the hands of the estimated 70 million people of South Asian origin living around the world.

With 10 million more joining the diaspora each year, that pool of wealth can only increase, he said.

The remittances this group sends home are having a major impact on increasing the size of the middle class in their home countries, added Mr Burki.

The average income of a member of the diaspora is US$25,000 (S$31,300) a year, adding up to US$2 trillion a year in all - much more than the total income of all of South Asia. Of this, about US$100 billion is remitted each year.

"The lower middle class in South Asia is benefiting a lot from remittances and it is helping many people migrate out of poverty," said Mr Burki, who will be one of the speakers at the South Asian Diaspora Convention being held here from Nov 21 to Nov 22.

The convention will focus on how South Asia's fast-growing middle class holds potential for businesses to expand in the region. More than 100 delegates from around the world are expected at the event, which was first held in 2011.

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