Recent data suggests a strong correlation between economic vulnerability and dependence on financial support from citizens living abroad received via remittances.
Statista analysts have estimated that three out of four countries where remittances accounted for the highest proportion of their Gross Domestic Product (GDP) in 2024 were identified by the Organisation for Economic Co-operation and Development (OECD) as being highly fragile.
If we speak of remittance volumes, India ($129 billion), Mexico ($68 billion), and China ($48 billion) were the top recipients of remittances in 2024. However, these countries cannot be labeled as highly dependent on this sort of funding income. Some smaller and poorer economies, on the other hand, see remittance inflows as subsistence lifelines. Thus, in 14 out of 61 highly or extremely fragile contexts identified by OECD, remittances made up more than 10 percent of GDP in 2023.
These statistics illustrate a growing need for affordable, tech-driven remittance solutions, which will facilitate international money transfers that play a crucial role in sustaining livelihoods, compensating for weak domestic economies, and addressing gaps in government resources.
Last year, in Tajikistan, remittances accounted for 45.4 percent of the GDP, as its citizens have increasingly moved to Russia as migrant workers, while a significant share of the local population participated in the war of aggression against Ukraine.
In Nicaragua, remittances accounted for 27.2% of its GDP, largely due to significant migration driven by economic hardships and political instability. The majority of those leaving the country sought opportunities in the United States, where they were able to send financial support back home, helping to sustain families and communities amid ongoing domestic challenges.
However, recent changes in U.S. immigration policy have significantly impacted Nicaraguan nationals residing in the country. The termination of the Humanitarian Parole program has placed approximately 47,000 Nicaraguans at imminent risk of deportation. Without their remittances, the country may face a significant GDP contraction this year.
Lebanon saw remittances account for 26.6% of its GDP in 2024. The country has been experiencing a severe economic downturn since 2019, marked by hyperinflation, a banking sector collapse, and a sharp devaluation of its currency. With Lebanon’s financial sector in crisis, foreign direct investment has declined sharply. Therefore, remittances act as an alternative source of income, helping families afford food, healthcare, and education.
As of late 2024, over 11,000 Lebanese nationals in the United States were granted Temporary Protected Status (TPS) by the Department of Homeland Security. With the recent policy changes and stricter immigration enforcement measures, the status of these individuals may be subject to change.
Honduras, where remittances constitute 25.2% of GDP, was also listed as a “high fragility” context in earlier OECD reports but was downgraded to a lower fragility rating in 2024.
Besides high dependency on remittances, highly fragile countries of the world share other common features, such as the growing trend towards autocratisation, exposure to armed conflicts, multi-layered violence, negative or minimal income growth, fiscal fragility, poor health and education opportunities, and vulnerability to misinformation.
