Steep surge in BRICS's global share of remittances by 193% unveiled in fresh data
BRICS Expansion Bolsters Global Remittances Market
The BRICS bloc, a significant player in the global economy, is set to strengthen its position in the remittances market following an expansion that includes Egypt, Ethiopia, Iran, and the United Arab Emirates (UAE). This development, which saw Argentina withdraw its membership application and Saudi Arabia delay its joining, promises to bring about significant changes in the remittances landscape.
Key Changes Expected
- Economic and Population Shift: With the addition of these countries, BRICS now represents approximately 44% of global GDP (PPP) and roughly 56% of the world’s population (4.45 billion people) as of mid-2025. This demographic and economic heft positions BRICS as a dominant force in global financial and labor flows, including remittance flows.
- Diversification of Remittance Corridors: Countries like Ethiopia and Egypt are among the world’s significant remittance recipients, primarily from diaspora communities in the Gulf and Western countries. The UAE, a major migrant labor hub, and Iran, with an extensive diaspora sending remittances, can substantially increase intra-BRICS remittance volumes. The geographic spread between South Asia, Africa, the Middle East, and emerging Latin American economies (had Argentina joined) means the remittance corridors could diversify, moving beyond traditional Western routes to intra-BRICS flows.
- Innovation in Remittance Systems: The expansion aligns with BRICS’ strategic goal to develop multipolar financial infrastructure, aiming to reduce reliance on Western-controlled financial systems and dollar dominance. This could involve expanding or adapting systems like the New Development Bank (NDB) and fostering regional payment systems or digital currency mechanisms that lower costs and increase speed of remittances among member countries. Countries like the UAE and Iran already have extensive financial sector capacities and fintech initiatives that could support such innovations.
- Commodity-driven Economic Influence and Remittance Stability: With members like Iran and UAE controlling significant oil production (about 40% globally within BRICS), economic stability and investment inflows could strengthen, which in turn affects migration dynamics and remittance flows. The strengthening economic ties among BRICS countries may encourage more labor mobility within the bloc, leading to increased cross-border worker remittances.
- Uncertainty Surrounding Saudi Arabia’s Membership: Saudi Arabia’s non-finalized membership due to political and strategic considerations means the full Gulf labor market integration with BRICS remittance dynamics remains uncertain. Its eventual inclusion could further amplify remittance volumes given Saudi Arabia’s role as a major labor destination.
In summary, the BRICS expansion incorporating Egypt, Ethiopia, Iran, and the UAE enhances the bloc’s demographic weight and economic diversity, which is expected to increase remittance flows within this large Global South coalition, diversify and potentially reduce remittance costs through new financial infrastructures, strengthen intra-BRICS labor migration and corresponding capital flows.
The net impact points to a growing, more independent remittance market centered around emerging economies in Asia, Africa, and the Middle East. The projected remittance volume for the BRICS bloc is expected to increase to $138.9bn in 2025. The BRICS bloc, including the new countries, provides renewed economic clout for the group on multiple metrics, positioning it as an increasingly powerful contender in the remittance space.
Sources:
[1] World Bank (2021). World Development Indicators. [Online]. Available: https://databank.worldbank.org/source/world-development-indicators
[2] International Monetary Fund (2021). World Economic Outlook Database. [Online]. Available: https://www.imf.org/external/pubs/ft/weo/2021/01/weodata/index.aspx
[3] United Nations (2020). World Population Prospects 2021. [Online]. Available: https://population.un.org/wpp/
[4] BRICS New Development Bank (2021). About Us. [Online]. Available: https://www.ndb.int/about-us/
- The expansion of the BRICS bloc to include Egypt, Ethiopia, Iran, and the United Arab Emirates is anticipated to boost market sizing in the global remittances market, as these countries represent approximately 44% of global GDP (PPP) and roughly 56% of the world’s population, positioning them as a dominant force in global financial and labor flows, including remittance flows.
- With the addition of countries such as the UAE and Iran, which have extensive financial sector capacities and fintech initiatives, the BRICS bloc is expected to innovate in remittance systems, potentially lowering costs and increasing the speed of remittances among member countries through the development of multipolar financial infrastructure.
