OIM - World Migration Report 2026 Chapter 4

MARIE MCAULIFFE

S. IRUDAYA RAJAN GIBRIL FAAL MICAELA LINCANGOThe opinions expressed in the report are those of the authors and do not necessarily reflect the views of the International Organization for Migration (IOM). The designations employed and the presentation of material throughout the report do not imply expression of any opinion whatsoever on the part of IOM concerning the legal status of any country, territory, city or area, or of its authorities, or concerning its frontiers or boundaries.

IOM is committed to the principle that humane and orderly migration benefits migrants and society. As an intergovernmental organization, IOM acts with its partners in the international community to: assist in meeting the operational challenges of migration; advance understanding of migration issues; encourage social and economic development through migration; and uphold the human dignity and well-being of migrants. _____________________________ Publisher: International Organization for Migration 17 route des Morillons P.O. Box 17 1211 Geneva 19

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Email: hq@iom.int Website: www.iom.int Cover photo: In Serbia, IOM and UNDP work together under the Swiss-funded project “Making Migration Work for Sustainable Development”. Young people and Roma returnees in local self-government of Prokuplje engaged in trainings for skills development and future employment with companies with whom a cooperation agreement is in place. Prokuplje, Serbia. © IOM 2022/Beyond Borders Media Required citation: McAuliffe, M., S. Irudaya Rajan, G. Faal and M. Lincango (2026). Migration and development: a strategic global asset at risk. In:  World Migration Report 2026 (M. McAuliffe and P. Ceriani Cernadas, eds.).

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WORLD MIGRATION REPORT 2026

4

MIGRATION AND DEVELOPMENT: A STRATEGIC

GLOBAL ASSET AT RISK 1,2

Introduction Migration has emerged as a powerful force shaping human development in the twenty-first century. Globally, there are more international migrants than ever before. The total now stands at over 300 million, or approximately 3.7 per cent of the world’s population.3 While this is a small proportion, it has increased incrementally over time as part of the growing interconnectedness of the world’s economies, societies and labour markets. At the same time, migration remains a highly contested issue in many countries, with public narratives often ignoring or downplaying its profound and positive contributions to global human and economic development. This chapter examines how international migration has functioned as a strategic global public good for sustainable development, and highlights the risks to equality and prosperity if anti-migration rhetoric and policy become the norm. At the outset, it is important to acknowledge that despite political backlash in some parts of the world, the long-term evidence is clear: migrants and diaspora communities are not only advancing the Sustainable Development Goals (SDGs), they outperform other State and non-State actors on this issue. Migration contributes significantly through the financial flows of international remittances and investments, the transfer of skills and knowledge and the productive transnational engagement of diaspora communities. These strategic diaspora development contributions

Goals (SDGs), they outperform other State and non-State actors on this issue. Migration contributes significantly through the financial flows of international remittances and investments, the transfer of skills and knowledge and the productive transnational engagement of diaspora communities. These strategic diaspora development contributions have proven remarkably resilient, even during crises such as the COVID-19 pandemic. In the current uncertain global sociopolitical environment, recognition and enhancement of the positive aspects of international migration are not guaranteed. On the contrary, the challenges that migration and human displacement can sometimes present are being elevated in debates and distorted for divisive political gain. Migration’s role in development is increasingly threatened by the persisting marginalization of migrants throughout the migration cycle, growing inequality in mobility, narrowing of regular migration pathways, and the weaponization of migration in political discourse. Increasingly abundant misinformation and disinformation about migrants exacerbates public fear and undermines evidence-based, strategic policy development that would be beneficial for inclusive sustainable development. Against this complex backdrop, this chapter explores the central question: how has international migration become a global strategic asset to achieving human development, and how can it be preserved? The chapter begins by outlining the ways in which migration catalyses development, focusing on three key mechanisms: remittances and diaspora investment; knowledge and skills transfers; and multifaced diaspora engagement. It then presents analysis on emerging risks that jeopardize migration’s developmental role. Finally, the chapter highlights a range of policies and initiatives that can help safeguard migration’s benefits, including through more inclusive, efficient and leveraged remittance systems, brain gain strategies and enhanced diaspora partnerships. 1 Marie McAuliffe, Head of IOM Research (until July 2025) and independent consultant; S. Irudaya Rajan, Co-Founder and Chair, International Institute for Migration and Development; Gibril Faal, Director, GK Partners and Visiting Professor in Practice, The London School of Economics and Political Science; Micaela Lincango, Associate Research Officer, Migration and Displacement Data and Research Analytics Division, International Organization for Migration. 2 The research and analyses included in this chapter were current at the time of writing (August 2025). 3 UN DESA, 2025.2

School of Economics and Political Science; Micaela Lincango, Associate Research Officer, Migration and Displacement Data and Research Analytics Division, International Organization for Migration. 2 The research and analyses included in this chapter were current at the time of writing (August 2025). 3 UN DESA, 2025.2

Migration and development: a strategic global asset at risk In making its argument, the chapter takes stock of the vast amount of data, case studies, research and analysis from around the world covering both the extraordinary contributions migrants make and the policy innovations needed to protect, expand and enhance those contributions in a rapidly changing world.

Migration as a catalyst of development The evidence is clear. Migration is a major driver of human development globally. With the sudden and severe financial and socioeconomic pressures faced by migrant and diaspora communities during the COVID-19 pandemic, there were concerns that diaspora finance and engagement would suffer major setbacks. 4 In fact, the flow of remittances as a vivid form of diaspora contribution to development proved to be resilient and continued to grow. The impact of migration extends far beyond remittances; migration facilitates the transfer of resources, knowledge, skills and innovations, as reflected in examples from diverse regions of the world (see the appendix). In Latin America and the Caribbean, migrant domestic workers – mainly women – support households and economies while sending remittances that strengthen local communities. In Europe, cross-border workers’ salaries from Switzerland benefit neighbouring countries like France and Germany. In Asia, the Philippines demonstrates how migrants’ social remittances influence governance and entrepreneurship. In Oceania, managed migration helps small island developing States (SIDSs) enhance resilience against climate change. In Africa, Ethiopia and Somalia’s integrated approaches illustrate the humanitarian–development–peace nexus (HDPN) approach, while in North America, the Ukrainian diaspora in Canada shows how remittances and advocacy contribute to crisis management and recovery.5 The strategic and catalytic importance of migration to sustainable development is reflected and integrated in the global financing for development (FfD) frameworks. Diaspora remittances, investments, knowledge, skills and

America, the Ukrainian diaspora in Canada shows how remittances and advocacy contribute to crisis management and recovery.5 The strategic and catalytic importance of migration to sustainable development is reflected and integrated in the global financing for development (FfD) frameworks. Diaspora remittances, investments, knowledge, skills and networks can be leveraged and optimized. The enhanced migrant and diaspora resources complement domestic and international cooperation resources, to address priorities, reduce disparities and bolster resilience (see the box on financing for sustainable development). Financing for sustainable development over the years Financing for development (FfD) is a series of global efforts coordinated by the United Nations to optimize equitable resource mobilization for sustainable development, structured through multilateral outcome documents agreed at four major international conferences: the Monterrey Consensus (2002), which established the foundation for financing for development and positioned it within the global agenda; the Doha Declaration (2008), which placed additional emphasis on financial system reforms in response to the 2008 global financial crisis; the Addis Ababa Action Agenda (2015), which provided a new global framework for financing sustainable development aligned with the Sustainable Development Goals (SDGs); a and the Sevilla Commitment (2025), which focuses on reform of the international financial architecture, reducing debt burdens, and scaling up investments to close the financing gap for sustainable development. b 4 The World Bank estimated that remittances would fall by 20 per cent due to the COVID-19 pandemic; the United Kingdom, Switzerland and others coordinated a “Call for Action” to mitigate this expected set back. See GFMD, 2024; World Bank, 2020. 5 For the complete case studies, refer to the Appendix A.3

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FfD3. Migration, diaspora finance and sustainable development The Addis Ababa Action Agenda (AAAA) recognized “the positive contribution of migrants for inclusive growth and sustainable development in countries of origin, and transit and destination countries”. c The AAAA commitments included increased international cooperation to: reduce the cost of remittance

FfD3. Migration, diaspora finance and sustainable development The Addis Ababa Action Agenda (AAAA) recognized “the positive contribution of migrants for inclusive growth and sustainable development in countries of origin, and transit and destination countries”. c The AAAA commitments included increased international cooperation to: reduce the cost of remittance transfers to less than 3 per cent by 2030; ensure adequate, cheaper, faster and safer remittance and financial services for migrants; address the trend of banks withdrawing services to remittance companies; expand payment systems to non-bank institutions; and promote competition, financial literacy, inclusion and the use of technology to expand and enhance the impacts of remittances. Beyond remittances, the AAAA commitments included action points on access to and portability of pensions and other forms of social and earned benefits; reducing recruitment costs for migrants; and recognition of foreign qualifications. d FfD4. Diaspora remittances, investment, innovation and impact Amidst current global challenges, the Fourth International Conference on Financing for Development (FfD4) was held from 30 June to 3 July 2025 in Seville, Spain. The Sevilla Commitment (Compromiso de Sevilla) outcome document reaffirmed the FfD3 commitments on remittances, emphasized the importance of productive use of remittances, and the expansion of diaspora-related digital financial services. Amongst other things, FfD4 introduced new commitments linking diaspora investment to innovative finance, engagement with diaspora communities and reform of the international financial architecture, stating that: “We will strengthen efforts to facilitate diaspora investment including through innovative instruments and call on development partners to support such efforts, including by engaging with diaspora communities and national governments”.e The RemitAid innovative finance mechanism was launched at the FfD4 summit as one of the 130 high-impact FfD4 Sevilla Platform for Action initiatives. a UN DESA, 2016, n.d.a and n.d.b. b UN DESA, n.d.c. c United Nations, 2015. d Ibid. e United Nations, 2025.

one of the 130 high-impact FfD4 Sevilla Platform for Action initiatives. a UN DESA, 2016, n.d.a and n.d.b. b UN DESA, n.d.c. c United Nations, 2015. d Ibid. e United Nations, 2025. Migration contributes to development through multiple channels, extending beyond financial flows. The following sections explore three key pathways through which migration contributes to sustainable development: international remittances; knowledge and skills transfer; and diaspora engagement. International remittances Remittances – financial transfers or in-kind transfers directly to families or communities in countries of origin – are a crucial driver of global economic growth and development. 6 In 2024, global remittances are estimated to be 905 billion United States dollars, a 4.2 per cent increase from USD 865 billion in 2023.7 Projections indicate that this upward trend will continue, with remittances expected to reach USD 913 billion in 2025. 8 6 IOM, 2024a. 7 Ratha et al., 2024. 8 World Bank, 2024.4

Migration and development: a strategic global asset at risk India consistently leads as the top recipient of remittances, followed by Mexico. 9 The distribution of remittances varies across regions as well, with South Asia estimated to experience the highest growth in 2024 at 11.8 per cent, driven by continued strong inflows to India, Pakistan and Bangladesh. 10 The Middle East and North Africa region is estimated to see a 5.4 per cent increase in 2024, rebounding from a decline in 2023. Remittance growth in Latin America and the Caribbean is expected to slow to 5.5 per cent, down from 7.5 per cent in 2023, while remittances to Europe and Central Asia are set to recover with a 3 per cent increase after an 8.7 per cent decline in 2023.

In East Asia and the Pacific, excluding China, remittances are estimated to grow by 3.3 per cent, supported by

to Europe and Central Asia are set to recover with a 3 per cent increase after an 8.7 per cent decline in 2023. In East Asia and the Pacific, excluding China, remittances are estimated to grow by 3.3 per cent, supported by continued inflows to countries like the Philippines. Meanwhile, sub-Saharan Africa is expected to see a modest growth of 2.4 per cent. Remittances compared to official development assistance and foreign direct investment A substantial portion of international remittances, approximately USD  685 billion in 2024, was directed to lowand middle-income countries (LMICs). 11 These financial flows often surpass official development assistance (ODA) and, in some cases, foreign direct investment (FDI), which underscores the significance of remittances for many LMICs (see Figure 1). For instance, in 2023, total remittances to LMICs amounted to USD 656 billion, surpassing the combined total of FDI and ODA, which stood at USD 638 billion.12 This gap is expected to widen in 2024. Figure 1. International remittance flows to lowand middle-income countries (2000–2022) 0 100 200 300 400 500 600 700 800 900 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 USD billions Foreign direct investment (FDI) Official development assistance (ODA) Remittances

Source: IOM, 2024a.

Note: Dollar values are given in current (nominal) USD. 9 Ratha et al., 2024.

10 Ibid. 11 Ibid. 12 World Bank, 2024.5

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This trend is significant given the volatility often associated with FDI and the limitations of ODA. While FDI can

9 Ratha et al., 2024. 10 Ibid. 11 Ibid. 12 World Bank, 2024.5

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This trend is significant given the volatility often associated with FDI and the limitations of ODA. While FDI can fluctuate based on global economic conditions and investor confidence, and ODA is subject to donor countries’ budgetary constraints and political priorities, remittances have consistently demonstrated resilience. Moreover, remittances often provide a more stable source of external financing compared to FDI, which can be susceptible to rapid withdrawals during economic uncertainties. This stability helps recipient countries maintain a stable balance of payments and supports domestic consumption, thereby stimulating economic growth. For example, in the immediate aftermath of the COVID-19 pandemic in 2020, remittance flows remained robust. Notably, remittances to LMICs experienced a modest decline of only 1.6 per cent compared to 2019. In stark contrast, FDI to LMICs plummeted by over 30 per cent during the same period. 13 This stark difference underscores the reliability of remittances as a source of external financing during times of economic turmoil. For countries with smaller economies, remittances contribute a large share of their gross domestic product (GDP). For instance, in Tajikistan and T onga, remittances made up 45.4 per cent and 38.2 per cent of their GDP respectively in 2024. 14 In countries like Honduras, Nepal and Samoa, remittances constitute around a quarter of their GDP. These inflows are crucial for household consumption and investment in local businesses, underscoring their importance to national economies. 15 Looking ahead, remittance flows are projected to continue their growth trajectory. The World Bank forecasts that remittances to LMICs will reach USD  690 billion in 2025, reflecting a 2.8 per cent growth rate, higher than the 2.3 per cent estimated in 2024. 16 This anticipated increase highlights the enduring importance of remittances as a stable and vital source of external financing for developing economies. Impact on economic growth

2.3 per cent estimated in 2024. 16 This anticipated increase highlights the enduring importance of remittances as a stable and vital source of external financing for developing economies. Impact on economic growth Remittances are a vital source of supplementary income for recipient households, boosting purchasing power and stimulating local economies. In low-income countries, even ones with a very small economy like T onga’s, remittances represent on average nearly 6 per cent of their GDP, compared to about 2 per cent for middle-income countries. 17 But the impact of remittances extends beyond merely financial transfer; remittances play a crucial role in the socioeconomic development of recipient countries. However, the high cost of sending remittances remains a challenge, as transfer fees can significantly reduce the amount received by beneficiaries, highlighting the need for more affordable and efficient remittance channels. In the fourth quarter of 2023, the global average cost of sending USD 200 was 6.4 per cent, more than double the SDG target of 3 per cent by 2030.18 However, the average cost of remittance through digital channels was closer to the SDG goal at 4.96 per cent in the fourth quarter of 2023. 19 13 World Bank, 2021. 14 Ratha et al., 2024. 15 Ibid. 16 World Bank, 2024. 17 Ratha, n.d. 18 World Bank, 2024. 19 Ibid.6

Migration and development: a strategic global asset at risk The impact of remittances on LMICs is likely to be more significant than official figures suggest, as these statistics do not account for unrecorded flows through both informal and formal channels. Informal fund transfer systems, such as the Hawala system, are widely utilized by expatriates due to their reliability and convenience. These systems often offer lower costs compared to the high fees charged by formal financial institutions. 20

Heavy reliance on remittances can also make origin countries vulnerable to economic downturns in destination nations. For example, Nicaragua’s economic growth is projected to cool in the medium term due to the likelihood

often offer lower costs compared to the high fees charged by formal financial institutions. 20 Heavy reliance on remittances can also make origin countries vulnerable to economic downturns in destination nations. For example, Nicaragua’s economic growth is projected to cool in the medium term due to the likelihood of slowing remittances, which made up 27.2 per cent of their GDP in 2024. 21 Meanwhile, a well-diversified set of destination nations for migration can return sustained remittance inflows, as seen with the Philippines. 22 International remittances play a pivotal role in the socioeconomic development of recipient countries Empirical research has demonstrated that households receiving remittances frequently allocate these funds toward educational expenses and medical care, fostering human capital development and enhancing labour market productivity, thereby promoting sustained economic growth. Evidence suggests that remittances are positively correlated with per capita health expenditures and gross secondary school enrolment in developing economies. 23 Remittances also play a crucial role in advancing financial inclusion by increasing recipients’ use of formal financial services, thereby facilitating savings accumulation and access to credit, both of which are essential drivers of entrepreneurial activity and broader economic development. In Latin America, for instance, remittance inflows have been linked to financial sector growth, underscoring their significance in strengthening financial systems. 24 Remittances significantly bolster educational opportunities in developing countries. Families receiving these funds often allocate a portion towards schooling expenses, leading to higher enrolment rates and improved educational attainment. For instance, a cross-country study encompassing 71 developing nations revealed that a 10 per cent increase in per capita official international remittances resulted in a 3.5 per cent decline in the share of people living in poverty, with an additional study highlighting that remittances had a strong, positive impact on education in low income countries by facilitating better educational access. 25 The influx of remittances also contributes to better health-care access and outcomes, as empirical evidence shows.26 Households receiving remittances are more likely to afford medical services, leading to improved health indicators. Moreover, remittances serve as a form of social insurance, enabling families to manage health-related risks and emergencies more effectively.27

Households receiving remittances are more likely to afford medical services, leading to improved health indicators. Moreover, remittances serve as a form of social insurance, enabling families to manage health-related risks and emergencies more effectively.27 Remittances have a broad economic impact by stimulating local economies. Recipients often invest in constructing new homes or renovating existing ones, enabling families to afford basic needs and thereby improving overall living standards.28 The increased purchasing power of recipient families leads to higher demand for goods and services, contributes to the local construction industry, generates employment and job creation and fosters local business growth. In countries like Nepal, remittances have been instrumental in reducing poverty levels and promoting 20 Moin, 2024. 21 Ratha et al., 2024; Reuters, 2024. 22 World Bank, 2024. 23 Khan, 2024. 24 Islam and Mondal, 2023. 25 Adams and Page, 2005; Khan, 2024. 26 Khan, 2024. 27 Djeunankan and T ekam, 2022. 28 Khan, 2024.7 WORLD MIGRATION REPORT 2026 economic development. 29 Furthermore, remittances can contribute to balance of payments stability and reduce reliance on external borrowing, thereby strengthening economic resilience. 30 Studies have shown that remittances increase the income of migrant households and reduce poverty. A study demonstrated that one fifth of the poverty reduction in Nepal between 1995 and 2004 was due to labour migration and remittances. 31 Similarly, remittances have been associated with upward income mobility in Sri Lanka, particularly among households from the lowest income deciles. 32 Remittances play a significant role in enhancing food security by influencing food expenditure, consumption and nutrition. Studies across various countries highlight this impact. One study in Indonesia showed that households receiving remittances spent 8.5 per cent more on food than they otherwise would have, while another study in the Republic of Moldova showed that families with children receiving remittances doubled their monthly food

nutrition. Studies across various countries highlight this impact. One study in Indonesia showed that households receiving remittances spent 8.5 per cent more on food than they otherwise would have, while another study in the Republic of Moldova showed that families with children receiving remittances doubled their monthly food expenditure per person. 33 In Nigeria, remittance-receiving households consumed more calories and had higher iron intake, though dietary diversity remained unchanged. 34 In Honduras, a study found that children in households receiving remittances are taller and heavier, with families spending more on nutritious foods such as fish, fruits and meats.35 Similarly, in Ecuador, remittances contributed to lower rates of being underweight among children but had no impact on stunting. 36 However, remittances may also contribute to overnutrition, as studies from Mexico indicate that at the community level, increased remittance inflows are linked to rising obesity rates among children and adults.37 Leveraging remittances for enhanced sustainable development impacts The potential to leverage remittances for greater financing for development has long been recognized and advocated for by experts and stakeholders including diaspora organizations, academic entities, the United Nations, 38 and institutions such as the World  Bank and the African Development Bank. 39 However, there are hardly any transformative remittance leveraging schemes in operation anywhere in the world. Amongst other things, the FfD4 Sevilla Commitment identified the need to ensure that additional private resources are mobilized at a larger scale for developing countries, and to leverage innovative financing mechanisms to enhance sustainability and impact. In line with these goals, the RemitAid innovative finance mechanism was selected as one of the 130 high-impact FfD4 projects to be monitored over the next 10 years. 40 RemitAid is a remittance leverage programme, designed to unlock billions of dollars of new development finance, through remittance match funding

and remitter micro-contributions. 41 For more information see box on RemitAid. 29 Wagle and Devkota, 2018. 30 World Bank, 2022. 31 Lokshin et al., 2010. 32 De and Ratha, 2012. 33 Adams and Cuecuecha, 2010; Vladicescu et al., 2008. 34 Babatunde and Qaim, 2010. 35 Howard and Stanley, 2016. 36 Antón, 2010. 37 Riosmena et al., 2016; Creighton et al., 2011. 38 OSAA, n.d. 39 Ratha, 2006; Okara et al., 2025. 40 United Nations, n.d. 41 RemitAid, 2025.8

Migration and development: a strategic global asset at risk RemitAid innovative finance mechanism The RemitAid innovative finance mechanism was launched at the FfD4 summit. It uses remittance match funding (RMF) to unlock billions of dollars of new development finance inflows in the form of remitter micro-contributions (RMC). Eighty per cent of the RMF and RMC funds will be invested in an incomegenerating perpetual RemitAid Endowment Fund (REF). Nineteen per cent of the RMF and RMC funds and 100 per cent of net income from the REF will be granted to the RemitAid Development Trust (RDT) for disbursement to diverse development projects and beneficiary organizations in Africa and within the diaspora. Only 1 per cent of funds is to be spent on operations, management and product development.

RemitAid creates new substantial, regenerative, sustainable, long-term development funds to finance the SDGs. RemitAid offers a balanced mix of remittance leverage, innovative finance, aid optimization, diaspora philanthropy, income generation, funding diversification and financial sustainability. It was selected as one of the 130 high-impact FfD4 Sevilla Platform for Action (SPA) initiatives. In the next 10 years, it aims to:

philanthropy, income generation, funding diversification and financial sustainability. It was selected as one of the 130 high-impact FfD4 Sevilla Platform for Action (SPA) initiatives. In the next 10 years, it aims to: generate USD 16 billion in RMF and RMC; invest USD 13 billion in REF, of which at least USD 6 billion is to be invested in Africa; generate income of USD 2 billion; disburse USD 5 billion in grants and co-finance th