Professional Documents
Culture Documents
COVID-19 Crisis
Through a Migration Lens
Public Disclosure Authorized
i
Migration and Development Brief reports an update on migration and remit-
tance flows as well as salient policy developments in the area of international
migration and development.
The views expressed in this paper do not represent the views of the World
Bank or the sponsoring organizations. All queries should be addressed to
KNOMAD@worldbank.org. KNOMAD working papers, policy briefs, and a
host of other resources on migration are available at www.KNOMAD.org.
COVID-19 CRISIS
THROUGH A MIGRATION LENS
Migration and Development Brief 32
April 2020
iv
COVID-19 Crisis Through a Migration Lens
Contents
Summary............................................................................................... viiii
Acknowledgements.................................................................................. xi
Appendix:
Data Notes and Methodologies for Forecasting Remittances and FDI........ ....30
A.1 Estimation of Remittance Flows for 2019............................................. . ...30
A.2 Methodology for Forecasting Remittances for 2020...................................30
A.3 Data on Remittances, Gross Domestic Product, Remittance Prices,
Refugees, and Other Variables....................................................................30
A.4 Caveats.............................................................................................31
A.5 Methodology for Forecasting Foreign Direct Investment..............................31
References.......................................................................................... . ...33
Endnotes ...............................................................................................35
List of Figures
vi
COVID-19 Crisis Through a Migration Lens
List of Tables
List of Boxes
vii
Migration and Development Brief 32
Summary
The economic crisis induced by COVID-19 have contributed to spreading the epidemic.
could be long, deep, and pervasive when Governments need to address the challenges
viewed through a migration lens. Lockdowns, facing internal migrants by including them in
travel bans, and social distancing have brought health services and cash transfer and other
global economic activities to a near standstill. social programs, and protecting them from
Host countries face additional challenges in discrimination.
many sectors, such as health and agriculture,
that depend on the availability of migrant Migration flows are likely to fall, but the stock
workers. Migrants face the risk of contagion of international migrants may not decrease im-
and also the possible loss of employment, mediately, since migrants cannot return to their
wages, and health insurance coverage. This countries due to travel bans and disruption to
Migration and Development Brief provides transportation services. Migrant workers tend
a prognosis of how these events might affect to be vulnerable to the loss of employment and
global trends in international economic migra- wages during an economic crisis in their host
tion and remittances in 2020 and 2021. country, more so than native-born workers.
Lockdowns in labor camps and dormitories
Considering that migrants tend to be concen- can also increase the risk of contagion among
trated in urban economic centers (cities), and migrant workers. Many migrants have been
are vulnerable to infection by the coronavirus, stranded due to the suspension of transport
there is a need to include migrants in efforts to services. Some host countries have granted
fight the coronavirus. Migrant remittances pro- visa extensions and temporary amnesty to mi-
vide an economic lifeline to poor households in grant workers, and some have suspended the
many countries; a reduction in remittance flows involuntary return of migrants.
could increase poverty and reduce households’
access to much-needed health services. The In 2020, remittance flows to low- and mid-
crisis could exacerbate xenophobic, discrimi- dle-income countries are expected to drop
natory treatment of migrants, which calls for by around 20 percent to $445 billion, from
greater vigilance against such practices. $554 billion in 2019. In the midst of this sharp
decline, the relative importance of remittance
This Brief is largely focused on international flows as a source of external financing for low-
migrants, but governments should not ignore and middle-income countries is expected to
the plight of internal migrants. The magnitude rise. This is because foreign direct investment is
of internal migration is about two-and-a-half expected to decline by even more, due to travel
times that of international migration. Lock- bans, disruption of international trade, and
downs, loss of employment, and social distanc- wealth effects of declines in the stock prices of
ing prompted a chaotic and painful process multinational companies. This Brief estimates
of mass return for internal migrants in India that it could fall by more than 35 percent.
and many countries in Latin America. Thus, Private portfolio flows through stock and bond
the COVID-19 containment measures might markets could fall by over 80 percent.
viii
COVID-19 Crisis Through a Migration Lens
The global average cost of remittances de- So far, government policy responses to the
clined to 6.8 percent in the first quarter of COVID-19 crisis have largely excluded mi-
2020, from 6.9 percent a year previous. This re- grants and their families back home. But there
mains far above the Sustainable Development is a strong case for including migrants in the
Goal target of 3 percent. Remittance service near-term health strategies of all countries,
providers have been affected by lockdowns, given the externalities associated with the
shorter business hours, and social distancing. health status of an entire population in the face
This has increased the relative importance of of a highly contagious pandemic. Also, govern-
electronic transfers, since some cash-based ments would do well to consider short-, medi-
services and remittance operators have been um-, and long-term interventions to support: (i)
closed or impacted negatively by the crisis. Al- stranded migrants; (ii) the remittance infra-
though the use of digital payment instruments structure; (iii) loss of subsistence income for
for sending remittances is increasing, poorer families back home; and (iv) access to health,
and irregular migrants often lack access to on- housing, education, and jobs for migrant work-
line services. They require the origination and ers in host/transit countries and their families
distribution of funds through banks, payment back home. The pandemic has also highlighted
cards, or mobile money. Online transactions the global shortage of health professionals
(like cash-based services) require remittance and an urgent need for global cooperation and
service providers to exercise vigilance against long-term investments in medical training.
fraud and financial crime, to comply with
anti-money laundering and countering the
financing of terrorism (AML/CFT) regulations.
However, such due diligence has become diffi-
cult amid staff shortages.
ix
Migration and Development Brief 32
x
COVID-19 Crisis Through a Migration Lens
Acknowledgements
This Brief was prepared by Dilip Ratha, Su- Oya Pinar Ardic Alper, Eldira Dashi, Harish
priyo De, Eung Ju Kim, Ganesh Seshan, and Natarajan, Roberta Gatti, Mattias K. A. Lund-
Nadege Desiree Yameogo of the Migration berg, Martin Rama, Hans Timmer, and Albert
and Remittances Team, Jobs Group, Social G. Zeufack for helpful comments and inputs.
Protection and Jobs Global Practice; and Sonia Thanks to Immaculate Nafula Machasio and
Plaza of the Finance, Competitiveness, and Maja Vezmar for research assistance, Fayre
Innovation Global Practice. Thanks to Michal Makeig for editing, and Rebecca Ong for com-
Rutkowski, Ian Walker, Asli Demirguc-Kunt, munications support.
xi
Migration and Development Brief 32
1
COVID-19 Crisis Through a Migration Lens
The economic crisis induced by COVID-19 is The exception is the so-called Spanish flu of
deeper and more pervasive than any other pan- 1918–20, which was global. It infected around
demic-induced crisis since the 1900s. Table 1.1 500 million people (one-third of the world pop-
briefly compares a few well-documented crises. ulation at the time) and resulted in 17–50 mil-
Most pandemics have affected a few countries lion deaths between March 1918 and March
and a small share of the world population. 1920, in three recurrent phases
Table 1.1 Comparison of Covid-19 with Other Pandemics and the Global
Financial Crisis
Cases Average
Case as % of change in
Cases as
Cases % of world
Deaths Fatality
Most Affected Countries
population GDP growth
(thousands) (thousands) Rate of most in the most
Population
(%) affected affected
countries countries
H1N1
Australia, China, Mexico,
(Swine Flu) 762,630* 11% 284 0.04% 0.06% -2.5%
Thailand, United States
(2009–10)**
25
20
15
10
0
8
8
8
8
8
8
9
9
9
8
9
91
91
91
91
91
91
91
91
91
91
91
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
un
ct
ep
ug
ov
ul
ar
an
eb
ec
pr
-O
-J
-M
-J
-N
-S
-D
-A
-J
-A
-F
29
29
29
29
29
28
29
29
31
30
29
3
COVID-19 Crisis Through a Migration Lens
even lower growth (IMF 2020).1 According to The crisis has greatly increased the demand for
the latest regional economic updates published health care services, and a global competition
by the World Bank, real economic growth could has already begun with many developed coun-
fall to -0.5 percent in the East Asia and Pacific tries announcing incentives to recruit doctors
region, 4.4 percent in Europe and Central Asia, and nurses from abroad. There is a global
-4.6 percent in Latin America and the Caribbe- need to train more health professionals and
an (LAC), 1.8 percent in the Middle East and provide recognition of skills in host countries in
North Africa (MENA), -2.8 percent in South the long term.
Asia, and -5.1 percent in Sub-Saharan Africa
(Arezki et al. 2020; Calderon et al. 2020; World Migrant workers tend to be particularly vulner-
Bank 2020a–d). able, more than native-born workers, to losses
of employment and wages during an economic
When viewed through a migration lens, the crisis in their host country. During the global
economic crisis induced by COVID-19 could be financial crisis, the average unemployment
even longer, deeper, and more pervasive than rate for foreign-born workers in the EU-28
these estimates imply. In host countries, the countries rose from 11.1 percent in 2007 to
COVID-19 crisis has created additional chal- 16.4 percent in 2009, significantly higher than
lenges in sectors that depend on the availabili- the increase among native-born workers. Even
ty of migrant workers. The crisis has dispropor- a decade later, in 2018, the unemployment
tionately impacted food and hospitality, retail rate remained high for foreign-born workers,
and wholesale, tourism and transport, and while it had fallen below the pre-crisis rate for
manufacturing. As the farming season begins native-born workers. The unemployment rate
in many countries, there are emerging signs of for foreign-born workers is especially high in
labor shortages in the agriculture sector of in- Italy and Spain, which have been hit hard by
dustrial countries that rely on migrant workers. the coronavirus.
Given the seasonality of agriculture, worker
shortages have given rise to concerns about Migration flows are likely to fall, but the stock
food security later in the year. of international migrants may not decrease
immediately. In 2019, there were around 272
The crisis has presented a challenge for the million international migrants (including 26
cross-sectoral mobility of workers, which could million refugees). Under normal circumstances,
be particularly hard for lower-skilled migrant migrants losing jobs would consider return-
workers, especially informal and undocument- ing home. However, that has become nearly
ed workers. During the global financial crisis impossible because of travel bans and the sus-
in 2009, many migrant workers moved from pension of transportation services. As a result,
construction to agriculture and retail. Such the rate of voluntary return migration is likely
intersectoral movement may be difficult at this to fall, except in the case of a few cross-border
time because the sectors that need more work- migration corridors in the South (such as Ven-
ers—such as health and information technolo- ezuela–Colombia, Nepal–India, Zimbabwe–
gy—require specific skills and prior training. South Africa, Myanmar–Thailand).2 In other
words, more people will stay on in their host
country than is typical.
4
Migration and Development Brief 32
Figure 1.2 Migrant Workers Are More Vulnerable to Risks of Unemployment During
an Economic Crisis
Unemployment rate (%), EU-28,
during global financial crisis 2008-2009 Native Born
Foreign Born
16.4
12.3
11.1 11.1
7.3
6.9
In the long term, income gaps between coun- those from international migrants, serve as a
tries constitute the most important driver of lifeline and insurance for families left behind.
migration pressure. The average per capita
income in high-income countries was 54 times The COVID-19 outbreak has placed many in-
that in low-income countries, according to the ternal migrant workers in dire conditions, many
World Bank (2019). The present crisis will not losing their (mostly informal) jobs and unable
lower the income gap sufficiently to reduce to return home due to disruption to public
migration pressures. On the contrary, income transport services and movement restrictions.
inequality between the low-skilled and high- This is the reality for most migrant workers,
skilled is likely to increase due to the crisis. especially those working in the informal sector
and living in overcrowded slums.
1.2 Impacts on Internal Migration
Lockdowns, travel bans, and social distancing
The number of internal migrants is about measures in response to the crisis have dispro-
two-and-a-half times that of international portionately affected internal migrant work-
migrants. China and India each have over ers, who found themselves stranded, unable
100 million internal migrants. For the poorer to return either to their places of work or their
sections of the population, especially from un- communities of origin. Without adequate
der-developed rural areas, migration to urban access to housing, basic water and sanitation,
economic centers provides an escape from health facilities, or social safety nets to help
poverty and unemployment. Remittances from them survive such restrictions, these migrants
these migrants, typically smaller amounts than have become even more vulnerable to conta-
5
COVID-19 Crisis Through a Migration Lens
gion risks. If discrimination and xenophobic basic provisions to provide shelter to stranded
attitudes affected migrants before, the current migrants in cities and districts of destination,
crisis has exacerbated such social tensions. transit, and origin. Some countries are provid-
The crisis has created a chaotic and painful ing cash support to affected and vulnerable
process of mass return for internal migrants in groups with a specific allocation for internal
India and many countries in Latin America. As migrants and returned migrant workers (World
a result, the COVID-19 containment measures Food Program 2020).
might even have contributed to spreading the
epidemic. The loss of jobs and livelihood has 1.3 Remittance Flows to Decline in 2020
also ruptured an important lifeline to rural
households in many countries. The persistence of the stock of international
migrants over an economic cycle or a crisis is
Governments need to address the challenges an important factor in the persistence or resil-
facing internal migrants by including them in ience of remittances. Not only do new migrants
programs that provide health services and send money home but also those migrants who
cash transfer and other social programs, and arrived a long time ago. Indeed, migrants new
by protecting them from discrimination. Some and old increase the amounts they send home
governments are already providing some as- during times of crisis and hardship in their
sistance to these vulnerable groups who are at country of origin, a phenomenon noted in the
risk of spreading the virus. For instance, in In- literature as the countercyclicality of remittanc-
dia, the government has now set up camps with es. Remittances (as a share of GDP) tend to be
Figure 1.3 Event Study: Remittances to the Philippines Increased During the Bird Flu,
but Decreased During the Global Financial Crisis
Percent change (y-o-y, 3-month moving average)
Bird Flu (Nov. 2003)
30 Financial Crisis (Sep. 2008)
25
20
15
10
0
-4 -2 0 2 4
Time (month)
Data Source: World Bank–KNOMAD remittance inflows dataset.
Note: t = 0 November 2003 and September 2008. It represents the month at which the outbreak reported.
6
Migration and Development Brief 32
largest in poor countries (8.9 percent in 2019), South Asia turned out to be larger than expect-
small island developing states (7.7 percent), ed in the second half of 2019.
and those in fragile and conflict-affected
situations (9.2 percent).3 During a crisis in the In 2020, remittance flows to LMICs are expect-
host country, however, remittances can decline. ed to decline by around 20 percent, marking
For instance, during the global financial crisis, the sharpest decline in recent history (table
remittance flows to low- and middle-income 1.2 and figure 1.4). This is not so much due to
countries (LMICs) declined by 5 percent in a decline in the stock of international mi-
2009. Similarly, the event study in figure 1.3 grants, but largely due to a fall in wages and
shows the countercyclical increase in remit- the employment of migrant workers in host
tance flows to the Philippines during the bird flu nations due to COVID-19 (see appendix for
pandemic in November 2003, and a procycli- the methodology behind this projection). The
cal decline in response to the global financial decline in remittance flows is expected to be
crisis starting in September 2008. sharpest in Europe and Central Asia, South
Asia, and Sub-Saharan Africa. These region-
In 2019, remittance flows to LMICs became al patterns are affected by COVID-19 and
larger than foreign direct investment (FDI), also a fall in the price of oil, which affects the
an important milestone for monitoring re- economies of Russia and the Gulf Cooperation
source flows to these countries. Recent data Council (GCC) countries in particular. Russia
reveal that in 2019, remittance flows to LMICs is the most important source of remittances
reached $554 billion, slightly higher than our to Central Asia; outbound remittances from
earlier projection ($551 billion) published in Russia, as expressed in U.S. dollars, would also
October 2019.4 Remittance flows to LAC and be impacted by the weakening of the ruble
900
FDI
700
500 Remittances
300
100 ODA
Portfolio debt
and equity flows
-100
90
96
f
92
94
18
14
16
00
98
06
08
10
12
02
04
20
19
19
19
19
20
20
20
20
19
20
20
20
20
20
20
20
Sources: World Bank staff estimates, World Development Indicators, and IMF Balance of Payments statistics.
Note: See appendix A in World Bank (2017) for data and forecast methods. FDI = foreign direct investment; ODA = official development assistance.
7
COVID-19 Crisis Through a Migration Lens
against the dollar. Such valuation effects would tion of international trade, and wealth effects
also be felt in outbound remittance flows from of declines in the stock prices of multinational
Europe through the weakening of the euro companies; private portfolio flows through
against the U.S. dollar.5 Outbound remittances stock and bond markets may decline by about
from the GCC countries would be impacted 80 percent.6
by the recession induced by the coronavirus as
well as a fall in oil prices. Remittance flows to Medium-term downside risks dominate the re-
South Asia, East Asia, and the MENA countries mittance outlook for 2021. The recovery from
would be impacted as well (see section 2 for the crisis is likely to be prolonged and arduous.
regional trends). Global and regional growth in 2021 is likely to
remain subdued. Given these global trends,
Despite the decline, however, remittance flows remittances to LMICs are expected to grow at
are expected to become even more important about 5.6 percent in 2021 to $460 billion, well
as a source of external financing for LMICs below the 2017 level of $487 billion and far
(figure 1.4). In 2020, FDI is expected to decline from the recent records of 2019 (table 1.2).
by over 35 percent due to travel bans, disrup-
Table 1.2 Estimates and Projections of Remittance Flows to Low- and Middle-
Income Regions
Low and Middle Income 307 446 487 531 554 445 470
East Asia and Pacific 80 128 134 143 147 128 138
Sub-Saharan Africa 29 39 42 48 48 37 38
Low and Middle Income -5.0 -1.5 9.1 9.0 4.4 -19.7 5.6
East Asia and Pacific -4.8 -0.5 5.1 6.8 2.6 -13.0 7.5
Europe and Central Asia -14.7 -0.3 20 10.9 6.6 -27.5 5.0
Latin America and the Caribbean -11.3 7.4 11 9.9 7.4 -19.3 5.9
Middle-East and North Africa -6.2 -1.2 12.1 1.4 2.6 -19.6 1.6
8
Migration and Development Brief 32
1.4 Slower Progress in Reducing Remit- and government policies in receiving countries.
tance Costs and other Migration-relat- According to the Remittance Prices Worldwide
ed Development Goals database, the average cost of sending $200 to
LMICs was 6.8 percent in the first quarter (Q1)
The World Bank closely monitors three Sustain- of 2020, slightly below the cost one year earlier
able Development Goal (SDG) indicators for (figure 1.5).8 The global average cost of remit-
which it is a custodian: increasing the volume tances declined from 6.9 percent in 2019 Q1 to
of remittances as a percentage of gross do- 6.8 percent in 2020 Q1. This is still more than
mestic product (GDP) (SDG indicator 17.3.2), double the SDG target (10.c) of 3 percent by
reducing remittance costs (SDG indicator 2030.9 Sub-Saharan Africa continued to have
10.c.1), and reducing recruitment costs paid the highest average cost, at about 9 percent.
by migrant workers (SDG indicator 10.7.1).7 Remittance costs across many African corri-
Progress on all three indicators is projected to dors and small islands in the Pacific remained
slow in 2020, although initial data shows that above 10 percent. Intraregional migrants in
remittance costs through digital channels are Sub-Saharan Africa comprised over two-thirds
decreasing. of all international migration from the region.
Yet intraregional remittance costs are very high
Remittance costs remained above the SDG in the region (figure 2.12 in section 2).
target and may increase due to disruptions to
remittance services, though there are counter- Brick-and-mortar remittance service provid-
vailing forces such as the growing use of digital ers (RSPs) have been affected by lockdowns,
services, increased competition for business, reduced business hours, and social distancing.
8
7.21
7.13
6.94
6.79 6.67 6.76 7.00
6.48
6.20
6 5.97
5.04 4.95
0
Global SAR LAC ECA EAP MENA SSA
Average
9
COVID-19 Crisis Through a Migration Lens
There is less disruption and perhaps a relative tries have announced incentives or relaxed visa
increase in remittances sent via digital pay- restrictions to recruit health professionals from
ment instruments. However, poor and irregular foreign countries.
migrants have lower or no access to digital
payment instruments—such as bank accounts, In general, most countries use residency crite-
payment cards, or mobile wallets—to fund or ria to determine whether foreigners are entitled
disburse remittance transactions. Many poor to public health care services (box 1). So far,
households in LMICs also lack access to trans- government policy responses have mostly
action accounts to receive remittances. Online excluded migrants. There is a strong argument
transactions also require RSPs to be able to for including migrants in the near-term health
remotely collect and verify identity documents strategies of all countries, recognizing the
and exercise additional vigilance against positive externalities associated with health, or
higher risks of fraud and financial crime, to conversely, the negative externalities associat-
comply with anti-money laundering and coun- ed with pandemics.
tering of financing of terrorism (AML/CFT)
regulations.10 However, such due diligence has Table 1.3 summarizes short-, medium-, and
become difficult amid staff shortages.11 The long-term interventions that could be consid-
disruption of formal remittance services and ered by the World Bank Group. Specifically,
a lack of access to banking or online services operational interventions could be considered
may shift remittances to informal channels. to support: (i) stranded migrants; (ii) access to
health care, housing, education, and jobs for
Some RSPs have temporarily waived the fees migrant workers in host/transit countries and
for sending money home, but such waivers are their families back home; and (iii) remittance
not sustainable. To encourage RSPs to facil- infrastructure.
itate remittance inflows, some governments
(notably that of Pakistan) have announced tax Keeping remittances flowing
incentives equivalent to the remittance fees
waived. The World Bank has initiated a weekly sur-
vey of remittance costs in several important
1.5 Policy Responses Should Be Inclu- corridors to assess the effects of the COVID-19
sive of Migrants and Their Remittances crisis on the remittances sector. Initial find-
ings show that authorities in many sending
Lockdowns and travel bans directly affect the and receiving countries observed a decline
employment and wages of foreign workers. in remittance flows and expect this trend to
Lockdowns in labor camps and dormitories can continue. RSPs are not classified as essential
increase the risk of contagion among migrant services. As such, their services have been
workers. Many migrants have been stranded interrupted or their working hours reduced.
due to the suspension of transport services. The use of digital channels for sending money
Lockdowns have also closed the offices of is increasing due to the closure of brick-and-
RSPs, some of whom are also grappling with mortar services.12 Meanwhile, a large percent-
employees who have fallen sick, thus affecting age of migrant workers and their families back
the flow of remittances. home are unbanked or under-banked, and are
facing challenges in meeting the due diligence
To address shortages of workers in agriculture requirements of digital channels. In the short
and health sectors, some countries have grant- run, the services that remain available are in
ed visas to attract agricultural workers, even general priced lower than those that preced-
chartering flights to bring them in. Many coun- ed the COVID-19 measures, according to
10
Migration and Development Brief 32
11
COVID-19 Crisis Through a Migration Lens
12
Migration and Development Brief 32
Table 1.3 Possible World Bank Interventions Addressing COVID-19’s Effects on Migration and Remittances
SHORT TERM
• Evacuation of stranded migrants. • Set up grants to improve access • Remittance service providers
to basic health services, education, (RSPs) have been facing store
• Granting temporary protected
and housing for host and migrant closures and disruption of
status to foreign nationals with
communities. remittance services.
expired visas.
• Extend cash transfer programs to • Support could be provided to RSPs
• Health awareness campaigns and
support internal and international to be declared as essential services.
provision of treatment to migrants.
migrants, especially those who have
• Incentives (such as subsidies) could
• Identifying options to serve lost their jobs in host cities/countries.
be offered to RSPs to reduce the cost
stranded migrants (including
• Support social services and provide of remittance services. For example,
internal and international migrants,
cash transfers to families left behind. RSPs could claim a tax credit for
informal workers, and those without
waiving remittance fees paid by
proper documentation). • Facilitate the provision of remote
remitters.
mentoring and medical advice by
• Supporting informal businesses
diaspora doctors, and the temporary • Certain AML/CFT requirements
that are likely to employ migrants,
return of such professionals. could be temporarily simplified to
conditional on keeping migrants on
incentivize online and mobile money
the payroll. • Include migrants in programs that
transfers, following a risk-based
provide a temporary moratorium
approach.
on debt service in countries of origin
(including loans taken out for paying • Public authorities would do well to
recruitment costs) and rent payments identify, remove, or mitigate factors
in host countries. that prevent customers or providers
from leveraging digital payment
instruments for remittances.
MEDIUM TERM
13
COVID-19 Crisis Through a Migration Lens
LONG TERM
• Support safe and regular • Set up twinning arrangements to • Support efforts to reduce
migration programs. train more doctors and nurses in remittance costs.
low- and middle-income countries in
• Support national strategies (on
collaboration with medical schools in
a demand basis) to increase the
high-income countries.
share of regular migrants in the total
migrant population in host countries. • Support efforts to reduce
recruitment costs.
14
Migration and Development Brief 32
15
COVID-19 Crisis Through a Migration Lens
The outlook for remittances for 2020 remains tries such as those in the Pacific Islands could
as uncertain as the impact of COVID-19 on see households at risk as remittance incomes
global growth and may depend to a large decline over this period (World Bank 2020a). A
extent on the measures taken to restrain the recovery of 7.5 percent growth for the region is
spread of the disease. In the past, remittances anticipated in 2021.
have been countercyclical during times of di-
saster in the recipient economy. This time, how- Remittances to the Philippines rose by 4 per-
ever, the pandemic has affected all countries, cent in 2019, to reach $35.2 billion, up from
and the economic fallout is likely to vary due to the 3 percent growth seen in 2018 (figure 2.1).
country-specific characteristics. Year-on-year growth in remittances for Janu-
ary 2020 was 6.6 percent but this likely reflects
2.1 East Asia and the Pacific a period prior to widespread COVID-19 mea-
sures being adopted in host countries. Remit-
Remittance trends. Remittance flows to the tances to Indonesia returned to a single-digit
East Asia and Pacific region grew by 2.6 annual growth of 4 percent in 2019 after expe-
percent in 2019, about 4.3 percentage points riencing double-digit growth in 2018, the latter
lower than the growth rate in 2018. In 2020, due to an expansion in remittance flows from
remittance flows are expected to decline by the Middle East (particularly Saudi Arabia).
13 percent due to the impact of COVID-19. By contrast, remittances from the Middle East
The slowdown is expected to be driven by shrunk in 2019 while growth remained in the
declining inflows from the United States, the double digits from Asia, particularly in Hong
largest source of remittances to the East Asia Kong SAR, China; and Taiwan, China.
and Pacific region, and from Hong Kong SAR, Remittance costs. The average cost of send-
China. Several remittance-dependent coun- ing $200 in remittances to the East Asia and
Figure 2.1 Top Remittance Recipients in the East Asia and Pacific Region, 2019
($ billion, 2019) (Percentage of GDP, 2019)
37.6
68.4
35.2
16.2
14.3
10.9
9.9 9.7
17.0 6.5 6.1 5.9
11.7 5.0
7.1
2.8 1.7 1.6 0.6 0.3
.
am
a
a
lu
oa
Ca Sts
m
sia
M dia
lia
ji
s
sia
s
Ph hina
ar
ilip ti
ji
nd
M nd
di
ne
ng
Fi
ne
Fi
va
a
na
go
nm
am
ay
ne
bo
es etn
rib
bo
sla
pi
la
.
pi
To
Tu
ed
et
C
al
on
ai
do
m
ilip
ya
Ki
m
lI
Vi
Vi
,F
Th
Ca
al
In
Ph
ia
sh
ar
on
M
Figure 2.2 Remittance Fees to the Philippines Are Among the Lowest in the East Asia
and Pacific Region
(Percent)
30
Fourth Quarter 2018
Fourth Quarter 2019 25.1
25
5 highest-cost corridors
21.0
20
17.0
15 14.0 14.2
13.4 12.9 13.0
11.8
5 lowest-cost corridors 11.0
10
5.1
5 4.1 3.2
3.2 2.6 3.4 2.8
2.9
2.2 2.2
0
pi s to
m
sia
a
s
a
s
u
ar
ne
ne
di
in
in
at
na
nm
ne
s
Ch
Ch
bo
nu
pi
pi
ilip te
ne
et
do
ya
ilip
ilip
Ph ira
Va
Vi
to
to
M
Ca
In
Em
Ph
Ph
to
to
nd
a
to
to
ric
to
to
nd
lia
la
ab
Af
tt
sia
ai
nd
ra
la
or
or
Ar
ai
Th
h
ay
st
ai
ap
ap
la
w
ut
d
Au
Th
al
ai
Ku
So
ite
ng
ng
M
Th
Un
Si
Si
Sources: Remittance Prices Worldwide database, World Bank. Average cost of sending $200.
Pacific region dropped to 7.13 percent in 2020 was expected to fall amid travel bans imposed
Q1, compared with 7.21 percent in 2019 Q1. by the GCC.17 As of April 30, 2020, 1677
The five lowest-cost corridors in the region av- overseas Filipino workers had tested positive
eraged 2.6 percent while the five highest-cost for COVID-19, of which 451 had recovered
corridors averaged 15.4 percent as of 2019 and 201 had died. Only workers barred from
Q4. Money transfer costs from Thailand to travelling to China were entitled to a subsidy
neighboring countries in Southeast Asia were of 10,000 pesos (about $198), which had not
among the highest, averaging 12.1 percent in been extended to those affected by travel
the last quarter of 2019. bans, particularly in Qatar and Kuwait.
Migration trends. The Philippine government’s Over 60,000 migrant workers from Myanmar,
efforts to halt the spread of the coronavirus Cambodia, and the Lao People’s Democratic
by banning travel to several countries—in- Republic fled Thailand, defying requests by
cluding Taiwan, China; Macau; Hong Kong officials to remain in the country to help con-
SAR, China; and South Korea—was short tain the virus and raising fears of cross-border
lived amid resistance from overseas Filipino infections. Elsewhere, Singapore, which ap-
workers concerned about potential job losses peared to have early success in containing the
if they were unable to travel back to their host coronavirus among its residents, was seeing
countries after home visits. The government a new surge in cases from a previously over-
announced that new deployment to these looked source. Over three-quarters of these
countries and mainland China would be scaled new cases were related to low-skilled migrant
down while deployment to the GCC countries workers housed in dormitories. There were
17
COVID-19 Crisis Through a Migration Lens
more than 200,000 migrant workers from the arrest and deportation of undocumented
Asia residing in a total of 43 dormitories in migrants in order to facilitate their testing and
the country. treatment for the coronavirus.
A lockdown in Malaysia was causing hardship Throughout the East Asia and Pacific region,
for foreign workers, particular daily casual migrant workers were left out of financial
workers. The Indonesian Ministry of Foreign support from host governments to counter the
Affairs (MOFA) indicated that it had sent more economic fallout from containing the coronavi-
than 3,000 aid packages to its citizens in Ma- rus pandemic, and were at times being told to
laysia and was preparing an additional 3,000 simply return home–though many were unable
more.18 Malaysia is the main destination for to travel due to travel bans or flight cancella-
Indonesian workers, hosting half of Indonesia’s tions. A recent survey of migrant workers in
estimated 3.7 million workers abroad in 2019.19 New South Wales, Australia, found that half
had lost their jobs and one-fifth had seen
Undocumented migrant workers in host their work hours reduced while none would
Southeast Asian countries risked detention be eligible for government assistance. A plan
and deportation by visiting health centers to to pay employers A$1,500 (around US$950)
be checked or treated for the coronavirus. The every two weeks per employee did not extend
Ministry of Labor in Taiwan, China, planned to to those employing temporary migrant workers
inspect the documentation of migrant caregiv- (except New Zealanders). While the Singa-
ers. A civic group called for granting amnesty porean government waived the monthly levy
to the estimated 50,000 undocumented work- of S$750 (about US$530) for foreign workers
ers in the economy, citing these workers’ fear of required of employers and committed to pro-
coming forward to report COVID-19 symp- viding the latter a rebate, contract workers did
toms. In Malaysia, civic groups similarly called not expect to receive any financial support.
on the government to impose a moratorium on
Figure 2.3 Remittance Inflows to Europe and Central Asia Remained Strong in 2019
($ billion, 2019e) (Percentage of GDP, 2019e)
15.8
29.2 28.2
25.4
10.6
Ro ia
ia
f
an
a
an
ia
ne
a
va
ia
ia
a
Ta lic
vo
lic
Ta ria
Uz ic o
vin
in
vin
gr
ni
ss
an
rg
rg
en
ist
st
ist
do
ai
ub
so
a
ra
ba
ne
Ru
pu
o
go
eo
lg
m
go
ki
kr
ul
jik
m
jik
Uk
Ko
ol
ep
Al
be
Bu
te
ep
U
Ar
Re
G
G
ze
ze
M
zR
on
,R
er
er
yz
M
rg
H
ia
rg
rb
Ky
d
Ky
an
an
Se
ia
ia
sn
sn
Bo
Bo
Sources: World Bank staff estimates, World Development Indicators, and IMF Balance of Payments statistics.
Note: GDP = gross domestic product; 2019e = estimated for 2019.
18
Migration and Development Brief 32
2.2 Europe and Central Asia Russia, the average cost was higher, declining
from 7.44 percent to 6.94 percent in the same
Remittance trends. Remittances to Europe period. The cost of sending $200 from Russia
and Central Asia remained strong in 2019, remained the lowest globally, though it rose
growing by about 6 percent to $65 billion in from 1.9 percent to 2.1 percent, mainly due to
2019. Ukraine remained the largest recipient a cost increase for the Russia-Ukraine corridor.
of remittances in the region, receiving a record The differences in costs across corridors in the
high of nearly $16 billion in 2019 (figure 2.3), region are substantial; the highest average cost
with the lion’s share of remittances coming for sending $200 in remittances was from Tur-
from Poland (about two-thirds of the total), key to Bulgaria, while the lowest average cost
followed by the Czech Republic, Russia, the was from Russia to Azerbaijan (figure 2.4).
United States, and the United Kingdom. Small-
er remittance-dependent economies in the Migration trends. According to data from the
region, such as the Kyrgyz Republic, Tajikistan, United Nations High Commissioner for Ref-
and Uzbekistan, particularly benefited from a ugees (UNHCR), 124,000 irregular migrants
rebound of economic activity in Russia. arrived in the European Union (EU) in 2019,
down sharply from a peak of more than 1 mil-
In 2020, the growth of remittance flows to lion in 2015. The Central Mediterranean route,
the region is estimated to fall significantly, by used by about half of all irregular migrants to
about 28 percent, due to the combined effect the European Union in 2016, accounted for
of the global coronavirus pandemic and tum- only 9 percent of irregular travel, while the
bling oil prices. Azerbaijan, Kazakhstan, and pace of arrivals through the Eastern Mediter-
Russia, the region’s largest oil producers, are ranean route surged in mid-2019, with Greece
expected to suffer budget shortfalls, mount- accounting for 59 percent of arrivals. While
ing pressure on their currencies, and possible overall migration numbers fell in 2019, Greece,
recessions. Notably, the high dependence on Spain, and Italy still received the most irregular
remittances from Russia is likely to increase migrants among the EU countries. Greece dis-
the impact of negative external shocks on the placed Italy as the most popular arrival point
Central Asian economies of the Kyrgyz Repub- for irregular migrants, with 74,600 arrivals in
lic, Tajikistan, and Uzbekistan. Remittances 2019. Only 11,000 irregular migrants landed
sent home by millions of expatriate workers in in Italy in 2019, down sharply from a peak of
Russia, most of them employed in the construc- 181,000 arrivals in 2016.20
tion sector, account for about two-thirds of
GDP in both the Kyrgyz Republic and Tajiki- Afghans accounted for 19 percent of irreg-
stan. (Outward remittance flows from Russia, ular migrants to the European Union and
as expressed in U.S. dollars, would be lower 40 percent of those travelling by the Eastern
due to the valuation effect of a weaker ruble Mediterranean route in 2019, representing the
against the U.S. dollar.) Indeed, the Kyrgyz Re- single-largest nationality. This was well above
public saw remittances fall 9 percent in the first the number of Syrians, who accounted for 13
two months of 2020 compared with the same percent of total arrivals. Nigerian migrants,
period the previous year. who were the single-largest nationality along
the Central Mediterranean route in 2016–17,
Remittance costs. The average cost of sending had all but disappeared as a major group.
$200 to the Europe and Central Asia region Meanwhile, Tunisians became the largest
declined modestly to 6.48 percent in 2020 group arriving in Italy in 2019, with 2,700
Q1 from 6.67 percent a year earlier. Without arrivals.
19
COVID-19 Crisis Through a Migration Lens
Figure 2.4 Russia Continued to Be the Least Expensive Country from Which to
Send Money
(Percent)
16
Fourth Quarter 2018
14
Fourth Quarter 2019
5 highest-cost corridors
12
10
6 5 lowest-cost corridors
0
ic
a
va
ia
ia
a
an
ia
n
ni
ni
ija
bl
ar
rg
ar
do
st
ba
ba
pu
lg
ba
lg
eo
kh
ol
Al
Al
Bu
Bu
Re
er
ra
to
to
Az
Ka
to
to
to
yz
to
nd
m
rg
to
om
n
ey
to
n
tio
do
tio
Ky
la
rk
n
ng
er
tio
ra
ng
tio
Tu
ra
to
itz
de
Ki
de
ra
Ki
ra
n
Sw
d
de
Fe
de
tio
Fe
d
ite
ite
Fe
Fe
n
ra
Un
ia
Un
ia
de
n
n
ss
ss
ia
ia
Fe
Ru
Ru
ss
ss
Ru
Ru
n
ia
ss
Ru
Source: World Bank Remittance Prices Worldwide database. Note: Average cost of sending $200 or equivalent.
Amid the COVID-19 pandemic, many Ukrai- after Russia and other neighboring countries
nians working abroad, estimated at some 3–4 closed borders and grounded flights to the
million, were having a difficult time finding em- Kyrgyz Republic, Uzbekistan, and Tajikistan,
ployment as tightened border controls blocked forcing them to camp out at the terminals for
many temporary and seasonal workers from weeks until the issue was resolved by their
moving throughout Europe, including within respective governments. Adding to the bottle-
neighboring countries. Some of them returned neck at airports, the travel bans coincided with
to Ukraine, though many were stranded spring celebrations in Central Asia when many
abroad. It was reported that many short-term migrant workers return home after laboring
Ukrainian workers in Italy, the third-most popu- through the winter. The COVID-19 crisis also
lar destination (with 11 percent of Ukrainian transformed the discussion on migration as
migrant workers) after Poland (40 percent) travel restrictions or border closings highlight-
and Russia (25 percent), were trapped behind ed the vulnerability of stranded migrant work-
a nationwide lockdown, unable to return home ers exposed to unhygienic conditions in crowd-
despite having expired visas. ed airports, unable to self-quarantine and with
limited or no access to medical services.
Even borders that are usually open, such as
between Russia and Central Asia, hardened as 2.3 Latin America and the Caribbean
COVID-19 spread through the region. Hun-
dreds of migrant workers from Central Asian Remittance trends. Remittances to the LAC re-
countries were stranded at various airports gion increased by 7.4 percent in 2019, reaching
20
Migration and Development Brief 32
$96 billion. Remittance inflows were bolstered projected growth rates are lower than the
by a low foreign-born unemployment rate of decrease of 12.3 percent during the global
3.1 percent in the United States. In particular, financial crisis of 2009. The anticipated drop in
year-on-year employment for February in- remittances is likely to be sharper for LAC than
creased by 211,000 in the construction sector, other regions. This is because Italy, Spain, and
where a large number of migrants work. the United States, which are the region’s main
remittance-source countries, have been hit
Nonetheless, growth in remittance inflows hard by the pandemic. Some corridors that are
for 2019 was uneven across countries in the highly dependent on remittances from these
region. Brazil, Guatemala, and Honduras saw countries, such as those involving Ecuador and
a rise in remittances of more than 12 percent Colombia, are likely to register larger declines.
in 2019. Colombia, Ecuador, Nicaragua, Prevailing high unemployment rates in Italy
and Panama saw an increase of more than and Spain are likely to be exacerbated by the
6 percent, while remittance growth in Bolivia economic impact of the COVID-19 crisis, fur-
and Paraguay declined by -3.8 percent and ther constraining remittance flows to Bolivia,
-2.2 percent, respectively.21 Remittances are Ecuador, Colombia, Paraguay, and Peru.
particularly important to some of the smaller
regional economies. Haiti’s remittances equal Remittance costs. The average cost of send-
37 percent of GDP, the largest ratio in the LAC ing $200 to LAC was 5.97 percent in 2020 Q1,
region followed by Honduras and El Salvador according to the Remittance Prices Worldwide
(figure 2.5). database. In 2019 Q4 the average cost of
sending $200 from the United States, where
2.3.1 Remittances to LAC in 2020 Will most LAC migrants reside, was below the glob-
Be Highly Impacted by COVID-19 al average of 6.8 percent but well above the
SDG target of 3 percent. The cost of sending
In 2020, remittance flows to the LAC region money to LAC has stayed stagnant over the
are expected to fall by 19.3 percent. These past few years. Notably, the cost of sending
Figure 2.5 Remittances Represent a Large Share of Foreign Income in Latin America
($ billion, 2019) (Percentage of GDP, 2019)
37.1
38.5
22.0
21.0
16.4
13.2 13.1
10.6
8.3 8.1 8.1
7.2 6.8 5.6 5.4 5.5
3.3 3.3 3.2 3.2
ico
ica a
ua ua
ica
na
lic
Co lic
Re la
Sa ia
Sa as
on r
Ec iti
Ja r
ne d
ru
il
on i
do
do
al
do
ra
H ait
a
az
di an
b
th . V pub
a
b
ai
r
ya
s
ex
n
Pe
m
ica em
du
du
m
H
pu
lva
ra
ua
lva
m
Br
i
om
u
te
na t
M
lo
re en
G
t
Re
a
D
om Gu
G c
H
e in
G
n
n
El
El
ica
in
in
St
om
D
D
Sources: World Bank staff estimates, World Development Indicators, and IMF Balance of Payments statistics.
Note: GDP = gross domestic product.
21
COVID-19 Crisis Through a Migration Lens
Figure 2.6 Cost of Sending Money to Latin America and the Caribbean, 2018 and 2019
(Percent)
16 5 highest-cost corridors
Fourth Quarter 2018
14
Fourth Quarter 2019
12
10
6 5 lowest-cost corridors
ba
ca
ru
il
ti
r
ti
do
ra
az
m
do
ai
Pe
ai
ai
Cu
du
na
Br
H
lva
m
ua
to
Pa
on
to
Ja
to
to
to
Sa
Ec
ile
ce
to
to
es
ic
n
El
to
pa
Ch
bl
to
an
at
es
da
to
es
pu
Ja
St
es
Fr
at
na
at
es
Re
at
d
St
St
Ca
at
ite
St
n
d
St
d
Un
ica
ite
d
ite
ite
d
Un
in
ite
Un
Un
om
Un
money from Canada to the Caribbean coun- 701,000 individuals, reflecting the impact of
tries, from Japan to Brazil, and from the United COVID-19 during the first two weeks of March
States to Cuba remains above 9 percent. Amid 2020. About two-thirds of the drop was report-
the COVID-19 crisis, the costs of transferring ed in leisure and hospitality, mainly in venues
remittances to the region could increase due serving food and alcoholic beverages.22 These
to operational challenges being faced by RSPs sectors are typically the largest nonfarm em-
(closures of agents and offices, access to cash, ployers of Mexican and Central American mi-
foreign exchange, security) and compliance grants. Similarly, Spain lost more than 800,000
with AML/CFT regulations. jobs in March, led by the services sector,
followed by the construction and agriculture
New trends affecting migrants from LAC. sectors. More unemployment is expected in
According to the U.S. Bureau of Labor Statis- developed and developing countries for April
tics (2020), in March 2020 the overall unem- and the coming months. According to some
ployment rate in the United States rose to 4.4 estimates, in the United States, a record 20
percent, and to 6.3 percent for the nation’s million persons sought unemployment benefits,
Hispanic population. The impact of social implying an unemployment rate of around 15
distancing guidelines and stay-at-home orders percent, in April 2020.23
had severely impacted jobs in retail, hospitality,
and services, in which a large percentage of COVID-19 could impact migrants’ health and
Latin American migrants were employed. mortality since they are particularly vulnerable
to the disease. Many migrants do not have
The latest U.S. data on total nonfarm pay- access to health insurance and social security.
roll employment reported a sharp decline of They have scarce resources to afford medical
22
Migration and Development Brief 32
treatment if infected. According to the mayor in various countries. In Mexico, Central Amer-
of New York City, 34 percent of people who ican migrants waiting for their applications to
had died from the disease in the city through be processed under the “Remain in Mexico”
the first week in April were from the Hispanic program were uncertain as to whether their
community (NBC 2020). This is in part due to cases would be reprogrammed. Many Venezu-
the precarious condition of urban immigrants, elan migrants were returning home from Chile,
congested living conditions, and prevailing Colombia, Ecuador, and Peru after losing their
health conditions that make them vulnerable to means of subsistence due to lockdown mea-
the illness. sures. Social tensions have flared in some host
countries due to competing needs to support
Amid the lockdown in the United States, mi- vulnerable host and migrant populations. It is
gration processes and asylum cases have been still too early to know the impacts of COVID-19
postponed, and more restrictive measures on migratory flows, since these will depend on
are being implemented. For example, the U.S. how long the restrictions to contain the disease
Centers for Disease Control and Prevention remain in place.
issued an order to turn away any people who
cross the southwestern border illegally instead Detained migrants awaiting deportation or
of taking them to a detention center where resolution of asylum claims are also at greater
they can ask for asylum in the United States. risk of becoming infected due to the confined
According to the U.S. Customs and Border Pro- nature of detention areas. Spain has released
tection (2020), 80 percent of people coming to some of its detainees. El Salvador and Gua-
the border after this order were being returned temala have requested the United States to
to their country within two hours. postpone deportations to avoid the risk of
exporting the virus from the United States or to
The closure of borders has created a pool of limit its deportations to 25 people per plane (Al
migrants, including return migrants, stranded Jazeera 2020).
Figure 2.7 Remittance Inflows to the Middle East and North Africa in 2019
($ billion, 2019) (Percentage of GDP, 2019)
26.8 16.3
12.7 12.6
10.2
8.9
5.6
7.5 4.9
6.7
4.5 3.8
2.4 1.9
1.9 1.8 1.6 1.3 1.0
0.3
p.
an ep.
p.
or .
co
en n
sia
Re ia
co
sia
ria
q
n
n
am lic
ep
p
a
Al i
t
a
Re
da
no
no
Ira
Re
az
az
er
Re
ou
oc
rd
oc
ge
ni
ni
,R
,R
g
G
G
pu
yp Jor
ba
ba
Tu
jib
ab
Tu
Jo
ic
or
ab
Al
en
d
d
Le
Le
D
M
Ar
M
Ar
an
m
m
Isl
ab
Ye
Ye
t,
t,
k
k
yp
an
an
n,
Ar
Eg
Ira
tB
tB
Eg
n
ria
es
es
Sy
W
Sources: World Bank staff estimates, World Development Indicators, and IMF Balance of Payments statistics.
Note: GDP = gross domestic product.
23
COVID-19 Crisis Through a Migration Lens
Domestic migrants have been impacted by ly impacted by the pre-COVID economic slow-
the COVID-19 containment. Quarantines have down in the area and the depreciation of the
forced many to return to their villages as a way euro against the U.S. dollar. This would partic-
to regain some livelihood. In Peru, after one ularly affect Morocco and Tunisia (projected
month of lockdown measures, many migrants to have remittance declines of around 17–18
are returning, sometimes walking, home. percent). In 2021, the growth of remittances to
the MENA region is expected to recover, albeit
2.4 Middle East and North Africa at a slow pace of around 1.6 percent due to
moderate growth in the euro area and weak
Remittance trends. Remittances to the MENA GCC outflows.
region are projected to fall by about 20 percent
in 2020, following a rise of 2.6 percent in 2019 Remittance costs. The cost of sending $200
(figure 2.7). The anticipated decline in remit- to the MENA region increased only slightly in
tances to the region can be attributed to the 2020 Q1, to 7 percent, compared with 6.76
global slowdown due to coronavirus and also percent in same quarter of the previous year.
the impact of lower oil prices in GCC countries. This is close to the global average for 2020
All major remittance-receiving countries will Q1, which was 6.79 percent. Costs vary greatly
likely see a collapse of remittances.24 Remit- across corridors: the cost of sending money
tances from the euro area would be additional- from high-income countries of the Organisa-
Figure 2.8 Sending $200 within the Middle East and North Africa Is Less Expensive
Than Sending $200 from Outside the Region
(Percent)
Fourth Quarter 2018
25 Fourth Quarter 2019
20 5 highest-cost corridors
5 lowest-cost corridors
15
10
0
ic
n
an
co
p.
p.
n
p.
no
no
no
no
bl
Re
Re
Re
rd
oc
pu
ba
ba
ba
ba
Jo
or
ab
ab
ab
Re
Le
Le
Le
Le
M
to
Ar
Ar
Ar
to
to
to
to
o
ab
an
t,
t,
t,
lt
m
y
da
lia
yp
yp
yp
Ar
ae
an
do
ra
Eg
na
Eg
Eg
Isr
n
st
ria
ng
Ca
er
to
Au
o
Sy
Ki
st
tt
G
an
ai
te
d
to
rd
ite
w
ira
ia
Ku
Jo
Un
Em
ab
Ar
ab
i
ud
Ar
Sa
d
ite
Un
24
Migration and Development Brief 32
tion for Economic Co-operation and Develop- 2020, UNHCR recorded 5.6 million persons of
ment to Lebanon continues to be in the double concern from Syria (including asylum seek-
digits. On the other hand, sending money from ers, refugees, and IDPs). There were about
GCC countries to Egypt and Jordan costs be- 3.6 million Syrian refugees or asylum seekers
tween 3 and 5 percent in some corridors (figure in Turkey, 0.9 million in Lebanon, 0.7 million
2.8). The Saudi Arabia–Syria corridor has in Jordan, and 0.2. million in Iraq. Accord-
experienced a dramatic fall in costs as the civil ing to UNHCR, as of March 2020, Iraq itself
war in Syria has receded. had huge numbers of IDPs: about 300,000 in
formal camps and another 150,000 in informal
Displaced populations. While the coronavi- settlements. Also, about 190,000 persons had
rus crisis ravages many countries, the MENA fled Yemen into countries in the region (mainly
region continues to bear the burden of wide- Oman, Saudi Arabia, Somalia, and Djibouti).
spread forced displacement due to conflicts in
Syria, Iraq, and Yemen. In response, UNHCR25 2.5 South Asia
has formulated a COVID-19 Emergency
Response. It focuses on (i) continuing, adapt- Remittance trends. Remittances to South Asia
ing, and delivering protection and assistance are projected to decline sharply by 22 percent
to the most vulnerable; (ii) advocating for the to $109 billion in 2020. This is a significant and
inclusion of refugees, internally displaced per- unprecedented deceleration compared with
sons (IDPs), and other marginalized groups in the growth of 6.1 percent seen in 2019. The
national public health and other responses; (iii) deceleration in remittances to the South Asian
prioritizing immediate interventions to prevent region in 2020 is driven by the global econom-
infections; (iv) strengthening communication ic slowdown due to the coronavirus outbreak
with communities; and (v) empowering indi- as well as oil price declines. The economic
viduals and families to make the best decisions slowdown is likely to directly affect remittance
on how to care for themselves, through cash- outflows from the United States, the United
based assistance (UNHCR 2020). As of April
83.1 27.3
22.5
18.3 7.9 7.8
5.8 4.6
8.1 2.8
6.7 1.7
0.9 0.0 0.0 0.1
a
ka
ng ka
an
sh
Sr al
an
an
ng an
an
an
al
di
s
ve
di
Af des
ve
ep
an
Ba an
ep
ist
de
In
ut
ut
t
st
ist
In
di
s
di
iL
ki
ki
an
iL
Bh
Bh
N
la
la
an
al
al
Pa
Pa
Sr
gh
M
M
gh
Ba
Af
Sources: World Bank staff estimates, World Development Indicators, and IMF Balance of Payments statistics.
Note: GDP = gross domestic product.
25
COVID-19 Crisis Through a Migration Lens
Figure 2.10 Remittance Costs in South Asia Vary Widely between the Highest- and
Lowest-Cost Corridors
(Percent)
20 5 highest-cost corridors
18 Fourth Quarter 2018
Fourth Quarter 2019
16
14
12
10
8 5 lowest-cost corridors
sh
a
a
de to
a
al
sh
an
an
ist to
di
di
di
ep
de
de
la s
sh
ist
st
In
In
In
an m
an
ng ate
N
ki
la
la
an
to
gh do
to
to
Pa
ng
ng
to
Ba mir
gh
Af ing
nd
e
a
Ba
Ba
o
ric
a
or
Af
di
tt
la
K
ap
Af
ab
to
to
ai
In
ai
to
d
ng
Th
w
Ar
ite
h
an
e
an
ut
Ku
or
Si
Un
st
d
So
st
ap
ite
ki
ki
Pa
ng
Un
Pa
Si
Kingdom, and EU countries to South Asia. Remittance costs. South Asia was the least
Falling oil prices will affect remittance outflows costly region to send $200 to (at 4.95 percent)
from GCC countries and Malaysia. in 2020 Q1. Some of the lowest-cost corri-
dors—including those originating in the GCC
In India, remittances are projected to fall by countries and Singapore, and the India-Nepal
about 23 percent in 2020, to $64 billion—a corridor—had costs below the SDG target of
striking contrast with the growth of 5.5 percent 3 percent. This is probably due to high vol-
and receipts of $83 billion seen in 2019. In umes, competitive markets, and deployment
Pakistan, the projected decline is also about 23 of technology (figure 2.10). But costs are well
percent, totaling about $17 billion, compared over 10 percent in the highest-cost corridors
with a total of $22.5 billion in 2019, when re- (UK to Afghanistan, Thailand to India, Paki-
mittances grew by 6.2 percent. In Bangladesh, stan to Afghanistan, Pakistan to Bangladesh,
remittances are projected at $14 billion for South Africa to India) due to low volumes, little
2020, a likely fall of about 22 percent. Remit- competition, and regulatory concerns. LMIC
tances to Nepal and Sri Lanka are expected to senders such as South Africa and Thailand also
decline by 14 percent and 19 percent, respec- had high costs. Banking regulations (related
tively, in 2020. The coronavirus-related global to AML/CFT) raise the risk profile of RSPs,
slowdown and travel restrictions will also affect and thereby increase costs for some receiving
migratory movements, and this is likely to countries such as Afghanistan and sending
keep remittances subdued even in 2021. The countries such as Pakistan.
projected remittance growth of 5.8 percent in
2021 will keep total regional flows at about
$115 billion. 26
Migration and Development Brief 32
Migration trends. The coronavirus crisis has India and Pakistan rose in 2019 relative to the
affected both international and internal mi- prior year but is expected to decline in 2020
gration in the South Asia region. As the early due to the pandemic and oil price declines
phases of the crisis unfolded, many inter- impacting the GCC countries. In India, the
national migrants, especially from the GCC number of low-skilled emigrants seeking man-
countries, returned to countries such as India, datory clearance for emigration rose slightly
Pakistan, and Bangladesh—until travel restric- by 8 percent to 368,048 in 2019 (Ministry of
tions halted these flows. Some migrants had to External Affairs, India). In Pakistan, the number
be evacuated by governments, such as those of emigrants jumped 63 percent to 625,203 in
of China and Iran. Afghanistan also saw large 2019 (Bureau of Emigration & Overseas Em-
flows of returnees from Iran (150,000) and ployment, Pakistan), largely due to a doubling
Pakistan (60,000) (BBC News 2020). The lock- of emigration to Saudi Arabia.
down in India has impacted the livelihoods of a
large proportion of the country’s nearly 40 mil- 2.6 Sub-Saharan Africa
lion internal migrants. Around 50,000–60,000
moved from urban centers to rural areas of or- Remittance trends. Remittances to Sub-Saha-
igin in the span of a few days. The government ran Africa decreased slightly, by 0.5 percent,
set up camps with basic provisions to provide between 2018 and 2019 to remain close to $48
shelter to these migrants in cities and districts billion. Due to the COVID-19 crisis, remittanc-
of destination, transit, and origin (Bindra and es are expected to decline by 23.1 percent
Sharma 2020). As of March 2020, 859,161 in 2020 to reach $37 billion, while a recovery
Rohingya refugees remained in crowded camp of 4.0 percent is expected in 2021. As many
conditions in Bangladesh. Sub-Saharan migrants are losing their jobs due
to an almost complete shutdown of economic
Before the coronavirus crisis, migrant outflows activities—especially in the construction, hos-
from the region were robust. The number of pitality, and other service sectors—remittances
recorded, primarily low-skilled emigrants from are expected to decline in the coming months.26
23.8 34.4
21.3
15.5
13.5
11.7 11.5
10.5
9.4 9.4
8.3
3.5
2.8 2.5 1.8 1.7 1.3 1.3 1.0 0.9
ia
ba .
m he
Co de
Se a
Co al
da
Se s
al
ria
go
na
..
am tho
li
Ug e
Le n
au
ric
er
o
ny
da
So Ma
Ca bw
o,
bw
da
g
eg
T
or
an
ha
be
To
ss
ig
ne
Af
Ve
ng
Ke
so
Su
a,
Su
ba
n
m
Bi
N
Li
bi
h
bo
a-
h
m
ut
h
ut
ut
ne
Zi
Zi
So
So
ui
G
Sources: World Bank staff estimates, World Development Indicators, and IMF Balance of Payments statistics.
Note: GDP = gross domestic product; 2019e = estimated for 2019.
27
COVID-19 Crisis Through a Migration Lens
15
10 5 lowest-cost corridors
ia
a
i
ia
n
ea
ria
la
i
al
o
al
an
da
ib
er
go
th
M
itr
be
M
am
ig
Su
so
Er
An
o
Li
ts
to
N
lt
Le
N
Bo
h
to
to
to
ire
ga
ut
to
to
to
es
es
So
to
lvo
ne
na
a
la
a
ric
at
at
a
Se
ha
ric
go
to
d’
St
ric
St
Af
G
Af
An
es
te
Af
d
h
ite
Co
ite
at
ut
h
ut
St
Un
ut
So
Un
So
So
d
ite
Un
The anticipated decline can be attributed to a in decades. City-sized locust swarms were at-
combination of factors driven by the coronavi- tacking crops and threatening the food supply
rus outbreak in key destinations where African of millions of people in the region.
migrants reside, including in the European
Union (i.e., France, Italy, Spain), the United Nigeria remains the largest recipient of remit-
Kingdom, the United States, the Middle East, tances in the region, and is the sixth-largest
and China. These large economies host a recipient among LMICs, with an estimated
large share of Sub-Saharan migrants and amount of $23.8 billion received in 2019, an
are a source of close to one-quarter of total increase of more than half a billion compared
remittances sent to the region, leaving Sub-Sa- with 2018 (figure 2.11). Ghana and Kenya are
haran Africa highly vulnerable to any shocks ranked a distant second and third in the region,
occurring in these countries, and especially with $3.5 billion and $2.8 billion received,
the COVID-19 pandemic. Remittances are respectively. South Sudan has recently started
the main source of foreign exchange revenue reporting remittances in the IMF Balance of
for the region, and they serve as an import- Payments statistics; in 2019 it had the region’s
ant channel for risk sharing in the developing highest share of remittances, as a percentage
world. But with a covariate shock such as of national GDP, at more than 34 percent. For
COVID 19 that affects both the recipient and these countries where remittances account for
source country, the loss of this important chan- a large share of GDP, a sharp decline is ex-
nel will probably lead to further poverty and pected for 2020 as many migrant workers have
deprivation. In addition, as of April 2020, many seen their income plummet, especially in mem-
countries in the Eastern Africa region were ber countries of the Organisation for Economic
experiencing the worst desert locust outbreak Co-operation and Development.
28
Migration and Development Brief 32
Remittance costs. Sending $200 in remittanc- Africa, and Zimbabwe), money transfer opera-
es to Sub-Saharan Africa cost 8.9 percent on tors or cash pickup services were either closed
average in 2020 Q1. This is a modest decrease or had reduced their hours.
compared with the average cost of 9.25 per-
cent a year before. Sub-Saharan Africa is the Displaced populations. The COVID-19 pan-
most costly region to send remittances to, but demic is sweeping across Africa at the same
there is heterogeneity across the region. The time the continent is facing record numbers
most expensive corridors are observed mainly of forcibly displaced people. Due to conflicts
in the Southern African region, where the South or insecurity, Africa has registered more than
Africa–Swatini corridor is the costliest, at an 25 million forcibly displaced people who are
average of 20 percent in 2019 Q2, an increase either IDPs or refugees. The majority of these
of 3 percent compared with the previous year’s displaced people originate from the following
quarter.27 In 2019 Q4, the Ghana-to-Nigeria countries: the Democratic Republic of Con-
corridor became the most expensive corri- go, South Sudan, Somalia, Ethiopia, Sudan,
dor. The cheapest corridors include those of Nigeria, the Central African Republic, and
Côte d’Ivoire to Mali and Senegal to Mali, at Cameroon. Many find themselves in informal
an average cost of less than 3.6 percent. The settlements and managed camps hosting tens
COVID-19 pandemic has made it more difficult to hundreds of thousands of people.28 High
for migrants to remit money to Sub-Saharan densities of forcibly displaced populations and
Africa as most payments are still in cash and the mobility of migrants make both groups
some money transfer operators are closed due highly vulnerable to contagion, and therefore a
to the crisis. The promotion of digital technol- priority in efforts to mitigate the spread of the
ogy combined with a regulatory environment coronavirus in Africa.
that promotes competition in the remittanc-
es market, and relaxing money-laundering Stranded migrants. To curb the spread of
regulations, are essential for Sub-Saharan COVID-19, the Government of Niger has
African countries to achieve the SDG target of imposed several restrictions including border
3 percent by 2030. closures, curfews, and travel bans within the
country and a mandatory two-week quaran-
Promoting the use of mobile money. The tine for travelers arriving in the country. These
COVID-19 crisis has demonstrated the need for restrictions led to a sudden increase of strand-
Sub-Saharan African countries to promote pro- ed migrants. At the end of March 2020, about
cedures and regulations based on mobile and 764 migrants were stranded in Assamaka, at
electronic payments and transfers. In Kenya, Niger’s border with Algeria and another 256 at
the Central Bank of Kenya announced seven its border with Libya as a result of the border
emergency measures to encourage the use of closures (IOM 2020). These migrants usually
mobile money technology (as opposed to cash) use irregular channels to migrate to North Afri-
to curb the spread of COVID-19. All charges ca and then Europe, with the majority of them
for transfers between mobile money wallets originating from Niger, Mali, Guinea, Nigeria,
and bank accounts were eliminated, transac- Ghana, and Burkina Faso. As these stranded
tion limits were raised, and charges for mobile migrants waited to return to their countries of
money transactions were waived for amounts origin through the International Organization
up to K Sh 1,000 (approximately U$10). MTN for Migration’s Assisted Voluntary Return and
in Uganda also waived fees on mobile money Reintegration program, tensions at the transit
transfers for 30 days from March 20 to promote centers were running high.
the use of cashless payments to contain the
virus. In other countries (Ghana, Senegal, South
29
COVID-19 Crisis Through a Migration Lens
for Forecasting
to migrants’ incomes proxied by the nominal
per capita incomes of the migrants’ countries
Remittances and FDI of destination (remittance-source countries).
These are also linked to the income and price
level (nominal per capita income) of migrants’
A.1 Estimation of Remittance Flows for countries of origin (remittance-recipient
2019 countries).29 The dependent variable is a log of
the remittances-to-migrant ratio of the remit-
The 2019 estimates are based on the Balance tance-recipient country. Explanatory variables
of Payment statistics of the International Mon- are the log of nominal per capita income of the
etary Fund (IMF), supplemented by data from suppliers of remittances to the recipient coun-
central banks. Where current data are not yet try, weighted by the share of migrant stock,
available, estimates and forecasts are used. and the log of nominal per capita income of
For 2019, since only partial data are available the recipient country. Data are from the World
for a few countries, estimates of remittance Bank’s World Development Indicators. The
inflows for those are obtained by projecting model uses a panel of 188 countries (of all
remittance inflows for the current year based income levels) over the period 1990–2019. A
on partial quarterly or monthly year-to-year panel random effects estimator is used. The
growth rates (usually based on data from a estimates give an acceptable goodness of fit
central bank or national statistical office). (overall R-square = 0.36), and all explanatory
variables are statistically significant.
A.2 Methodology for Forecasting Re-
mittances for 2020 A.3 Data on Remittances, Gross Do-
mestic Product, Remittance Prices,
The remittance projection model used for 2020 Refugees, and Other Variables
is based on standard remittance estimation
models in the literature that posit remittances The main source for data on remittance inflows
as a function of income in migrants’ countries and outflows is the IMF’s Balance of Payments
of destination and origin (Ratha and Shaw database, which provides information on
Variables
Dependent variable: log of remittances-to-migrant ratio of remittance-
Coefficient
recipient country
Remittance-source country per capita income weighted by migrant stock 1.353***
(0.066)
Remittance-recipient country per capita income 0.688***
(0.041)
Constant -12.714***
(0.414)
Observations 4,712
Source: World Bank staff estimates based on methods and data as above.
Note: Standard errors in parentheses, *** p<0.01, ** p<0.05, * p<0.1.
30
Migration and Development Brief 32
annual and quarterly remittance flows. Many the United Arab Emirates) do not report data
countries are starting to use a new notion of on remittance outflows, although the countries
remittances introduced in the sixth edition of are important destinations for migrants. Some
the IMF’s Balance of Payments and Interna- countries, such as China, have gaps in data
tional Investment Position Manual (BPM6) following the transition from BPM5 to BPM6.
(IMF 2009). According to the new definition, Past data and some current trends are used to
personal remittances are the sum of two main arrive at estimates in such cases.
components: “compensation of employees”
and “personal transfers.” Secondary sourc- A.5 Methodology for Forecasting For-
es of remittance data are the websites of eign Direct Investment
countries’ central banks or statistical offices,
which provide high-frequency (monthly and/ The foreign direct investment (FDI) projec-
or quarterly) data on one or both of the above tion model used in this report is derived from
two categories. An extended discussion of econometric methods used earlier in the World
data on migration and remittances is provided Bank’s Global Development Finance publi-
in the Migration and Remittances Factbook cations (World Bank 2004). The dependent
2016 and Migration and Development Brief 28 variable is the log of the FDI to nominal GDP
(World Bank 2016 and 2017). Gross domestic ratio. Explanatory variables are the three-year
product (GDP) forecasts were based on those moving average of the nominal GDP growth
from World Bank’s World Development Indi- rate of the top 30 major suppliers of FDI
cators data, augmented by growth rates from weighted by the share of FDI; the lagged dif-
the IMF World Economic Outlook, World Bank ference between the nominal GDP growth rate
regional forecasts, Consensus Economics, Citi- of the receiving LMIC and that of the top 30
bank, Deutsche Bank, Institute of International major suppliers of FDI weighted by the share of
Finance, and JPMorgan Chase.30 The source FDI (three-year moving average); the lagged
of data for monitoring the cost of sending exports of goods and services to nominal GDP
remittances through regulated channels is the ratio of the receiving LMIC; the U.S. 10-year
Remittance Prices Worldwide database. T-bill rate; the lagged dependent variable;
the price of oil to capture oil-related FDI; and
A.4 Caveats a dummy each for the impacts of the global
financial crisis (year 2009) and the Asian crisis
Some countries do not report data on remit- (year 1997). The model uses a panel of 114
tances in the IMF Balance of Payment statis- LMICs over the period 1990–2019. Data are
tics. Several low- and middle-income countries from the World Bank’s World Development
(LMICs)—for example, Cuba, Turkmenistan, Indicators. A panel random effects estimator is
and Uzbekistan—do not report remittance used. The estimates give a respectable good-
inflows data to the IMF, although it is known ness of fit (overall R-square = 0.58), and all ex-
that emigration from those countries takes planatory variables are statistically significant.
place. Some high-income countries (such as
31
COVID-19 Crisis Through a Migration Lens
Table A.2 Panel Data Regression Estimates of Foreign Direct Investment to Low- and Middle-
Income Countries
Variables
Dependent variable: log of FDI to GDP Coefficient
FDI source growth rate (3-year moving average) 1.120**
(0.480)
Receiving LMIC growth rate - FDI source growth rate (3-year moving 0.444***
average) (0.170)
Lagged export to GDP 0.622***
(0.118)
Lagged log of FDI to GDP 0.517***
(0.016)
U.S. 10-year T-bill rate 0.032**
(0.015)
Crude oil price 0.001*
(0.001)
Global financial crisis dummy -0.220***
(0.062)
Asian financial crisis dummy 0.181***
(0.062)
Constant -2.045***
(0.112)
Observations 1,982
Source: World Bank staff estimates based on methods and data as above.
Note: FDI = foreign direct investment; GDP = gross domestic product; LMIC = low- and middle-income country. Standard errors in parentheses,
*** p<0.01, ** p<0.05, * p<0.1.
32
Migration and Development Brief 32
33
COVID-19 Crisis Through a Migration Lens
———. 2020. “COVID-19 Emergency Response ———. 2020a. World Bank East Asia and Pacif-
Update.” UNHCR, April 8. ic Economic Update, April 2020: East Asia and
Pacific in the Time of COVID-19. Washington,
World Bank. 2004. Global Development DC: World Bank.
Finance 2004: Harnessing Cyclical Gains for
Development. Washington, DC: World Bank. ———. 2020b. Fighting COVID-19: Europe and
Central Asia Economic Update (Spring 2020).
———. 2006. Global Economic Prospects 2006: Washington, DC: World Bank.
Economic Implications of Remittances and Mi-
gration. Washington, DC: World Bank. ———. 2020c. The Economy in the Time of
Covid-19. Semiannual Report of the Latin
———. 2016. Migration and Remittances Fact- America and Caribbean Region, April 2020.
book 2016. Washington, DC: World Bank. Washington, DC: World Bank.
———. 2017. “Migration and Remittances: ———. 2020d. South Asia Economic Focus,
Recent Developments and Outlook. Special Spring 2020: The Cursed Blessing of Public
Topic: Return Migration.” Migration and De- Banks. Washington, DC: World Bank.
velopment Brief 28, World Bank, Washington,
DC, October. ———. 2020e. “Remittance Prices Worldwide.”
Issue 33, World Bank, Washington, DC, March.
———. 2019. Leveraging Economic Migration
for Development: A Briefing for the World Bank World Food Program (2020). Economic and
Board. Washington, DC: Word Bank. Market Impact analysis of COVID-19 on West
and Central Africa. March 2020
34
Migration and Development Brief 32
⁶The projections for portfolio flows are based on IIF Also, digital channels are favored because of
12
cost that a savvy customer with access to sufficiently health care protection to foreign workers.
complete information could pay to transfer remit-
tances in each corridor.
35
COVID-19 Crisis Through a Migration Lens
16
For example, the average total cost of sending World Bank (2020), Africa’s Pulse, No. 21, Spring
26
$200 from the United States to Mexico decreased 2020: An Analysis of Issues Shaping Africa’s Eco-
from 4.04 percent to 3.85 percent in April after mea- nomic Future.
sures related to the COVID-19 crisis.
No recent data were published in 2019 Q3 and
27
36
Migration and Development Brief 32
37
COVID-19 Crisis Through a Migration Lens
38