ADB economists:C-19 is a serious blow to remittances

The pandemic has created an unprecedented crisis for overseas workers and the remittances they send home. But with the right actions by governments, it could also be a chance for long-term change, according to Director General of ADB’s Central and West Asia Department Werner E. Liepach and ADB Principal Economist Guntur Sugiyarto.
The impact of the COVID-19 crisis on migration and remittances is going to be devastating. Why? Because the crisis affects directly the flow of international migrants and the money they send home to help their families. Asia has been contributing to more than 40% of total migration worldwide, with south and central Asia as the main sources.
For traditional migrant-sending countries, these overseas workers have constituted more than 10% of their labor force and remittance flows account for more than 10% of total outputs. When these are diminished by COVID-19, this will bring enormous challenges to the poverty reduction efforts in Asia and the Pacific. Migration and remittances are known to be pro-poor.
Remittance inflows have been very stable over the years and much bigger than the flows of foreign direct investment and international development assistance combined. Remittance inflows have helped reduce poverty rates among migrant families and beyond, and increased migrant families’ spending on education and health care, which is good for overall human development.
The pandemic is truly global, affecting both sending and receiving countries, and it is unprecedented in its magnitude and scale. The impact is also very different than the previous two crises that we experienced: the Asian Financial Crisis in 1997/98 and the Global Financial Crisis in 2008/09. This crisis devastates markets across the board.
The impact assessments by international and national institutions that we have seen so far assume the crisis will only reduce remittance flows, and that they will be bouncing back soon after the virus has gone. But this is a complete understatement. From the past we know that migration and remittances are very resilient, but this crisis has changed dramatically the situation of the countries and economies that send and receive migrants.
The pandemic has put a “country stigma” to the migrant workers from areas that have been struggling to cope with the pandemic, and this may prevent them from entering other countries. Worse still, they may even be prohibited from exiting their own countries by their governments if the pandemic has become uncontrollable. If blocked from finding work overseas, there is no guarantee that the migrants can find an alternative job, which have become scarce.
Read more at: AKIpress

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