Pandemic or no pandemic, life must go on. But life is far more miserable during a pandemic and Covid-19 has brought us one of the worst tragedies in centuries.
Economies have shrunk, millions of jobs have been lost all over the world, thousands of companies have closed down and certain sectors like travel and aviation have experienced life-threatening turbulence.
But in this gloomy landscape, migration has remained an oasis. Millions of people all over the world who left the comforts of their motherland to work abroad have been able to support their families back home during this crisis and serve as a financial helpline.
The remittances from migrants during this crisis have saved thousands from deaths due to Covid-19 and saved millions from poverty. Whether it’s a natural disaster, financial crisis, earthquake or hurricane, or a pandemic like Covid-19, migrants are always there to help their families and others.
In this context, some recent reports on migrants’ remittances are interesting. It shows how migrants are struggling and saving money to guarantee a better life for their families.
According to the latest report published by the Global Knowledge Partnership on Migration and Development (KNOMAD), a World Bank initiative, on 12 May 2021, it was expected that the remittance flows to low and middle-income countries would fall by about 20 perc ent, which was later revised up to 7 per cent in 2020.
Now, with data in hand, the figures are very encouraging. The total remittance amounted $540 billion, which means there was only a 1.6 per cent fall, compared to $548 billion in 2019.
These excellent figures have been achieved even though no new migration was reported during this period. It’s also important to note that the decline was smaller than the rate of decline witnessed during the financial crisis of 2009, when it was 4.8 per cent.
Reasons for high remittances
It’s important for us to study the reasons for such high remittances when the global economy is on a downswing. The main reason for the resilience of remittances during this pandemic was migrants’ desire to help their families, by cutting their own expenses and maximising savings.
Also, due to travel restrictions necessitated by Covid-19, many people cancelled their vacations and instead sent the money home.
Secondly, transactions through banks increased during the pandemic as the practice of carrying cash during travel stopped. The world is more comfortable now sending money through mobile phones, internet-based money transfer, and digital money etc.
Many leading exchange companies reported double digit growth in their digital services. Recent data showed that cross border remittance via mobile increased by 65 per cent in 2020 from $ 7.7 billion in 2019 to $ 12 billion in 2020.
Third, the fiscal policies and stimulus packages announced by governments to support the corona-hit economies have helped the remittances. The size of these stimulus packages runs into trillions of dollars cumulatively. For example, about a quarter of the migrants worldwide are in the US.
When the US comes up with a cash transfer programme or a fiscal stimulus package, it will have a trickle-down effect on countries like India. Gulf countries, too, announced huge stimulus packages which supported the labour market, and expats were able to keep their jobs and send money home when it was badly needed.
Preparing for crises
The report also gives some other indicators. Weak oil prices, along with policy measures to encourage nationalization of jobs, affected the employment of migrants in Saudi Arabia.
In Saudi Arabia, the number of foreign workers fell dramatically in 2020, with more than 257,000 leaving in Q3 alone.
Remittances to the Philippines from Saudi Arabia declined 36% from a peak of $28 billion to $18 billion in 2020. A decline of 14 per cent was reported in 2020 itself. Likewise, remittances from the UAE to India fell 17 per cent during this period.
There are also unofficial reports about a significant return migration of workers from the GCC countries to India. The state of Kerala alone reported return migrants in excess of 1.2 million.
The world is a better place because of migration. Let’s hope we will overcome this crisis, too, and there are signs that life will return to normal in a few months, though not completely. But we must learn our lessons, which will prepare us for similar crises in future.