Remittances have cushioned the impact of Covid-19 in poor countries – Community News

Remittances have cushioned the impact of Covid-19 in poor countries

tHE COVID-19 pandemic is especially distressing for migrants. Not only have they suffered from the pandemic themselves, many are also abroad and have to watch from a distance as their families struggle at home. Others lost their jobs or were unable to travel for work. But new data shows that those who are abroad help their families immensely.

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According to the World Bank, remittances to low- and middle-income countries will reach $589 billion in 2021, a 5.5% increase from pre-pandemic levels in 2019. More surprisingly, even during the worst pandemic in 2020, remittances declined. by only 1.7%. This resilience is a welcome contradiction to early predictions that the pandemic would put pressure on remittances. Instead, the money kept flowing. But the World Bank finds that during the pandemic, many migrants have made even greater efforts to cut their own spending or rely on savings to send money home. Many were also helped by favorable conditions in their wealthier host countries, where faster economic recovery, as well as subsidies and employment programs provided income.

For many countries, money transfers are invaluable. And in some places they are the main economic influx. In the Gambia and Lebanon, remittances will account for more than 30% of . by 2021 GDP. In 54 other countries they will make up more than 5% of GDP. Taken together, remittances in 2021 are expected to exceed both foreign direct investment inflows and aid to low- and middle-income countries. Particularly in the poorest countries, remittances have been a lifeline, helping to contain economic losses and strengthen patchy social safety nets.

For many migrants and countries that send migrants abroad, the future looks uncertain. While the World Bank expects remittances to continue growing in 2022, it warns that the end of fiscal stimulus programs and a slowing economic recovery in rich countries could harm them. The demand for migrants is also changing. Border closures in some parts of the world continue to keep migrants out. And in many places, attitudes towards immigrants have deteriorated during covid, while demand for low-paid jobs has increased among locals. If these trends continue, remittances could fall again, much to the detriment of poor countries.

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