COVID-19 Pandemic Slows Crucial Remittances to Developing Countries

The lockdown that has become the safest way to end the spread of the virus has led to a significant increase in unemployment and underemployment. Globally, the International Labor Organization estimates that "the number of unemployed could increase by 5.3 million in an optimistic scenario and 24.7 million in a pessimistic scenario from a baseline of 188 million in 2019".

While in developed countries, workers can still count on the conventional mechanisms of social protection and on certain income stabilization devices, this is not the case in developing countries, where the majority of workers are in the informal sector. They are therefore numerous in these countries, for whom confinement, curfew or the closure of businesses and markets remain a difficult ordeal. "They then find themselves unable to ensure their daily subsistence, since they have neither unemployment insurance nor health insurance".

In West African countries, the situation is likely to become more complicated, with "the drying up of another often important source of income for households: the money from the diaspora". According to le Point Afrique, "the transfers sent by migrants to their relatives who remained in the country represented, in 2019, a global volume of nearly 550 billion dollars across all developing countries".

The newspaper cites the case of Senegal, for example, which officially has between 500,000 and 600,000 nationals living abroad. "The money from the diaspora represented in 2018, 9.1% of GDP, or twice the amount of official development assistance received by the country for that same year". And the country does not occupy the first place in the ranking of nations that really depend on this aid. "The transfers sent by the diaspora represented no less than 34% of Haiti’s GDP in 2018, 28% of Nepal’s, 19% of the Comoros’, to name just those countries".

This is a precious support that the global nature of the covid-19 pandemic risks taking away from families. Migrants mainly reside in the countries most affected by the pandemic, and are suffering "from confinement measures". According to data from the OECD and surveys conducted in France and Italy by le Point Afrique, it is proven that "the majority of migrants hold unskilled or low-skilled jobs, in sectors such as catering, cleaning, tourism, construction and others, which are now at a standstill.

With already low levels of remuneration in "normal" times, it is clear that with the current situation, many of these migrants could "fall into poverty and find themselves financially unable to help their relatives who remained in the country". The other difficulty is that "the confinement and the closure of most commercial banks and money transfer services such as Western Union, MoneyGram or Ria, prevent migrant workers from traveling and accessing these means of sending funds". Even if the possibilities of digital transfers exist, "migrants do not have all the necessary resources to use them".

Le Point Afrique pleads for migrants, "very vulnerable" to the crisis, to be protected and "taken into account in national solidarity programs".