How Are Remittances Being Affected by COVID-19?

How Are Remittances Being Affected by COVID-19?

Remittances are cash transfers sent by migrants, usually to family members in their country of origin. International remittances can also make up part of the regular income of some people, for example, those who perform cross-border work, such as seasonal workers who tend crops in neighbouring countries. According to UNDESA, migrants send an average of 15% of their earnings back home. Remittances often represent up to 60% of family income.

Projections

In 2019, remittances worldwide accounted for a flow of $706 billion, most of it ($554 billion) to low- and middle-income countries, setting a new record, the World Bank said. However, they also project that the flow of remittances in 2020 will be affected by the economic impact of the pandemic, falling 19.7% globally, and 19.3% for Latin America and the Caribbean. The IOM estimates those most affected will be those working in the catering, construction, manufacturing and hospitality industries, which are traditionally performed by migrants in North America and Europe.

Reality

Despite these projections, some countries continued to see a rise in remittances, at least during the first two months of the year. As time passes, a decline in remittances is being observed.

Guatemala, for example, reported an increase in remittances during the months of January and February, compared to the previous year. While a drop was noted in March, April and May 2020 compared to 2019, more remittances were reported in May 2020 than in May 2018. Moreover, the balance up to May 2020 shows a decline of 3% compared to the previous year.

In Mexico remittances practically doubled during March 2020, the month in which the pandemic was declared, in comparison with the previous month. This represented the greatest monthly increase in remittances since 1995, as well as the highest ever income received by recipient families from remittances, with $378 USD. Some economists attribute this increase to a fear held by migrants that their incomes would be reduced in destination countries, causing them to send savings to their families.

In other countries, however, the predictions have come true and a decrease in the receipt of remittances has occurred. Such is the case of Honduras, which between January and March decreased by 1.1% from the previous year, apparently as a result of a loss of income in the destination countries due to the outbreak of COVID-19, especially the United States. This decrease in remittances intensifies as the months pass: between March and April 2020, the country reported 43% less reserves compared to 2019.

A similar case is found in El Salvador, where a 9.8% drop in remittance between January and April 2020 was reported, compared to the previous year. The vast majority of remittances in this country (95.4%) come from the United States, one of the places hardest hit by the pandemic. It is expected that with the gradual opening of states, remittances will be strengthened.

Reducing the cost of sending remittances is necessary to help alleviate this situation, in line with the Sustainable Development Goals, specifically Goal 10 target 10.c, which aims to reduce the transaction costs of migrant remittances to less than 3%. One factor that can offset remittance fees (which on average, entail a sending fee of 6.79%, which is well above the 3% fee suggested in the SDGs) is a decrease in the value of the currencies of recipient countries, which increases the value of what migrants send home.

Factors

As mentioned above, the main factor in the reduction of remittances to Central America is probably due to the reduction in income from migrants in the United States due to COVID-19. However, there are other factors associated with the pandemic that must also be taken into account, such as:

  • Vulnerability in health: migrants are required to be in good health to be able to keep working. However, 20% of regular migrants in the US do not have health insurance. The figure increases if they are irregular migrants, and that’s just one example.
  • Economic recession: employment and remittances will be hit hard, as the effects of the pandemic-induced recession are felt. An estimated 595,000 migrant workers could be affected. According to ILO, the pandemic will restrict the ability of migrants to travel to work in their host countries and reduce their income, as well as their capacity to return to their families.
  • Exclusion of people from crisis response systems, leaves them more vulnerable to global crises.

Turn on the microphones! Five keys to giving youth a voice on migration issues

Turn on the microphones! Five keys to giving youth a voice on migration issues
Categoria: Communication & Migration
Autor: Guest Contributor

Radio is still a medium that, especially in rural areas where access to the Internet is difficult, is still very much alive and shows itself to be an accessible alternative for the population. Whether in the car, in an app on the phone or in a device that only works with batteries in the most remote areas, the radio is there a few steps away and almost effortlessly. Entertaining us, informing us and accompanying our daily activities. From the largest cities to the most sparsely populated municipalities, radio is an industry that generates jobs and is vital for the dissemination of mass messages to a wide variety of audiences.

How can radio be harnessed as an avenue to empower young people about migration?

After seeing the high impact that this media has on the culture of our communities, these are some actions to be taken that will allow us to bring the message of regular, orderly and safe migration to a youth who may be victims of crimes associated with irregular migration:

  • Find out about community radio or radio stations in your city: This will help you to know all the spaces that exist within the community and to identify the audiences they are aimed at in order to choose the right channel that connects with young people.
  • Identify young leaders in their communities with communication skills: There is no better way to communicate with youth than through voices they can empathize with and identify with.
  • Create content that connects: Talking about migration does not require a serious or monotonous tone. Try to create short but effective messages with easy to understand language and prioritizing the use of storytelling instead of communicating concepts.
  • Create your own online radio station: The radio has undergone a significant evolution in recent years and proof of this is that the number of Internet radio stations has been increasing, which has led to the democratization of radio. You no longer need big budgets to have your own radio station and broadcast different contents 24 hours a day, this is a good alternative if there are not or do not have access to have space on traditional radio stations.
  • Develop empowering initiatives: Young people possess many talents: dynamism, fast learning and, of course, a lot of creativity. Therefore generating training spaces on radio production issues will help to discover hidden talents and form new opinion leaders, without leaving behind the importance of also empowering them on migration issues, this will allow them to transmit better messages that promote a safe, orderly and regular human mobility and will help them themselves to make better decisions regarding migration.

A success story of such activities is 'Youth on the Airwaves', a workshop on radio and migration that harnesses the energy of young people who are leaders in their communities and shows them the potential of the radio industry as a method of generating livelihoods and making their voices heard.

As a product of this initiative, the young people created their own radio spots to promote a better informed migration, from the ideation of the creative concept, script development, voice-over practice, recording and editing, in all these processes they received the support of both IOM staff and a team of experts in radio production.

A few years ago, former United Nations Secretary Ban Ki-moon stressed that "radio is very important to make the voice of youth heard, it stimulates the imagination and shortens the distances between people". One more reason to bring the media closer and generate spaces for youth in order to disseminate messages aimed at providing the population with sufficient and verified information that will allow them to make better decisions before embarking on a migratory route.