Remittances infected

The Covid-19 pandemic undermining national economies is now infecting remittance flows, with the World Bank projecting an exponential decline to recipient nations throughout the world. According to its latest figures, our region is not immune, with the decline in funds being sent into Latin America and the Caribbean estimated to be around $96 billion (all currency in US) this year, a drop of 0.2 percent from 2019.

This is not good news for many of us abroad who are supporting vulnerable families back home, and are hobbled through forced isolation and lockdowns; we are also facing reduced incomes due to less work, and even worse, many of us are unemployed. Of course, our predicament ripples across to relatives in the homelands who rely heavily on our remittances, in many cases not as a supplement to their earnings, but as a major source of annual income.

As the World Bank has noted, the projected fall in remittances across the globe would see the sharpest decline in recent history, and is largely triggered by Covid-19 impacting on national economies, wages, and on employment. These negative impacts are particularly notable in the case of migrant workers abroad, who are typically more vulnerable to loss of employment and earnings during an economic crisis in their host counties.

According to the World Bank, the projections are that global remittances will decline by a startling, worrisome 14 percent come 2021, compared to the pre-Covid-19 levels in 2019. Also, remittance flows to low- and middle- income countries are projected to fall by seven percent, to $508 billion in 2020, followed by a further decline of 7.5 percent, to $470 billion in 2021. These estimates were published last month in the World Bank’s Migration and Development Brief.

It is worrisome news, particularly with the Covid-19 onslaught now into its second wave, and with no discernible end in sight, despite the recent breakthroughs by Pfizer and Moderna with promising vaccines.

As the International Organisation for Migrants website notes, nations as Guyana are heavily reliant on funds from abroad, and received a significant total of remittances of around $314 million in 2014. This incoming infusion constituted 11 percent of Guyana’s GDP. Out of this total, 87 percent was sent from the US and by us in Canada, with the rest transferred from the UK, and other Caribbean nations, such as Suriname.

IOM also indicated heavy reliance by Haiti on remittances, with the World Bank concluding that 21.1 percent of its GDP was derived from the foreign funds in 2014. As IOM noted, it is estimated that the total number of Haitians in the diaspora is between 1.5 million to four million, with onsite research by the ACP Observatory on Migration showing that Haitian families depending on relatives abroad descend into poverty when the funding inflows are interrupted.

Other Caribbean nations that primarily receive historical remittances, and which have grown dependent on it as a significant source of income are the Dominican Republic, with the biggest total of $4.65 billion in 2014. Then there is Jamaica, which received the next largest total, $2.264 billion; in third place was Haiti, which received $1.9 billion, also in 2014.

According to the IOM, Jamaica had an official diaspora population of 1.098 million persons abroad in 2013, with World Bank data in 2014 showing the nation received close to $2.264 billion in remittances. These transfers were sent mostly from the US, the UK, and here in Canada. The total remittances represented 15 percent of Jamaica’s GDP, which made this nation highly dependent on remittances from abroad.

As Mamta Murthi, vice-president for Human Development and chair of the Migration Steering Group of the World Bank has noted, “the impact of Covid-19 is pervasive when viewed through a migration lens, as it affects migrants and their families who rely on remittances”.

Sadly, the impact will only worsen until a Covid-19 vaccine emerges, hopefully by the end of 2020.