IFAD calls for governments to declare remittance ‘an essential business’

The United Nations' International Fund for Agricultural Development or IFAD has called for governments to declare remittance service providers essential businesses in times of coronavirus crisis in the wake of the significant decline in money sent home by migrants.

News Deskbdnews24.com
Published : 15 June 2020, 07:21 PM
Updated : 15 June 2020, 07:21 PM

“Remittances are a lifeline for poor families in low and middle income countries. Governments should take measures and do everything possible to facilitate the flow of funds during crises like the COVID-19 pandemic,” said Gilbert F Houngbo, president of IFAD, on the occasion of the International Day of Family Remittances on Monday.

Personal remittances account for a significant portion of the GDP in most south Asian countries. As a share of GDP, remittances range from between 2-3 percent (Bhutan and India) to nearly a third of GDP in Nepal (28.6 per cent), according to World Bank data.

In Nepal, IFAD works with local governments to provide pre-departure and support services to migrants through migration resource centres, as well as on a range of on- and off-farm activities to help families of migrants build resilience.

The COVID-19 restrictions have hit the economic sectors that employ migrant workers, such as tourism, hospitality and agribusiness, hard. As a result, many migrants have become underemployed or unemployed. Remittance flows are projected to make their sharpest decline in history, falling by 20 per cent in 2020, according to the IFAD statement.

The closure of remittance service providers during lockdowns has further exacerbated the ability of migrants to send money back to their families.

An IFAD survey last month of the Senegalese diaspora in France found that about 30 per cent of those who stopped or reduced sending money home did so because their money transfer operator was closed, or informal networks were no longer operating.

 “IFAD is now tracking the impact of declining remittances on the ‘receiving end’ in developing countries, where typical remittances of $200 to $300 per month account for about 60 percent of household income,” said Pedro de Vasconcelos, the head of IFAD’s Financing Facility for Remittances.

“While the reduction in remittances will not fall evenly across countries and communities, the impact is likely be substantial in rural areas where remittances count the most.”

Hundreds of thousands of migrants have returned home to their rural communities. At the same time, their families are also negatively impacted by lockdown measures that have paralysed economic activity and destroyed livelihoods in their countries of origin.

With both sides of remittance corridors being simultaneously affected, disruptions directly affect the lives and livelihoods of one billion people: 200 million migrants who send money to their 800 million relatives.

 Almost half of these families live in rural areas where poverty and hunger are the highest. This year, tens of millions of families who rely on the remittances they receive will fall below the poverty line, resulting in more hunger and less spending in education and health, the study found.