Some 60 million Asian workers last year remitted home $ 260 billion, more of which needs to go to savings and investment, the United Nations said Monday.

Worldwide remittances amounted to $ 410 billion, said a report on Asia’s remittances jointly compiled for the first time by the UN International Fund for Agricultural Development (IFAD) and the World Bank.

The report called on Asian Governments and financial institutions to find ways to cut costs on this remittance flow to ensure that more money was spent on investments in rural development.

“It’s more important in terms of financial flows than the total development assistance provided by the World Bank, the UN and bilateral donors,” said Kevin Cleaver, Associate Vice-President of the IFAD.

“If only 5 per cent of that $260 billion was used for investments in rural areas, that’s more than all the official development assistance in 2012 for agriculture, which was about 8.5 billion,” Cleaver said.

The joint UN and World Bank report suggested Asian Governments create a financial environment which would encourage more competition in the handling of remittances to bring down costs.

In Asia, nearly 75 per cent of all remittances are handled by banks, changing an average of 8.35 per cent of the remittance amount, said the World Bank’s remittance specialist Massimo Cirasino.

Only 5 per cent of the transfers were handled by Asia’s much cheaper post offices and 2 per cent by micro credit organizations, according to the report.

Maximising the use of remittances, especially in rural Asia where there are still food shortages, would be one means of filling the gap left by declining development aid from the Organisation for Economic Cooperation and Development.

“The donor business is declining,” Cleaver said. “This business is shrinking so where is the money going to come from? A lot of it is going to have to come from remittances,” he said.

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