Remittances, the money that migrant workers send back to their families in their home countries, are expected to fall globally by well over $100 billion amid the economic downturn caused by the coronavirus pandemic.
Remittances to low- and middle-income countries are expected to drop by nearly 20% in 2020 because of the worldwide coronavirus crisis, according to an analysis by the World Bank. The decline in these money transfers — due largely because of the fall in employment and wages of migrant employees — is anticipated to be one of the biggest drops in recent history.
A reliable and significant source of external income for the developing world, the plummet of remittances is expected to hit the most vulnerable populations across the globe.
“Remittances are a vital source of income for developing countries. The ongoing economic recession caused by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies,” World Bank Group president David Malpass said in a statement released Wednesday.
“Remittances help families afford food, health care, and basic needs. As the World Bank Group implements fast, broad action to support countries, we are working to keep remittance channels open and safeguard the poorest communities’ access to these most basic needs,” Malpass continued.
Global remittances are expected to fall to $572 billion in 2020, down from $714 billion in 2019.
There are roughly 270 million individuals who work outside of their home countries, a World Bank spokesman told Reuters, revealing the immense prevalence of international employment. Many of these workers will face reduced wages or job loss altogether as coronavirus spurs a global recession.
Leaders of developing countries are already bracing for the fallout. The president of Mexico earlier in April, for example, implored his countrymen working in the United States to continue sending checks home despite the setbacks.
Mexican President Andrés Manuel López Obrador encouraged workers employed up North to “not stop helping their relatives in Mexico, although they are also going through a difficult situation, but do not stop thinking as they have done: always about their loved ones.”
Mexican analysts predict remittances from the United States to fall by 17% in 2020, and won’t reach 2019 levels again until possibly as late as 2028 — a reflection of how long it could take for the world to recover from the economic downturn.
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