Foreign workers “remittance” to their home country significantly decreases, hit the economy of developing countries May 24 at 17:56
With the spread of the new coronavirus infection, with economic activity stagnating and job loss, the number of “remittances” sent by foreign workers around the world to their home countries is expected to decrease significantly. The World Bank points out that many families fall into poverty and have a significant impact on the economies of developing countries.
Last month, the World Bank released a report outlining the impact of the spread of the new coronavirus on international remittances. Accordingly, the amount sent to low and middle-income countries is expected to decrease by 1.1 trillion yen in Japanese yen by $109 billion compared to last year.
This is far more than 2009, which was affected by the financial crisis, and is expected to be a scale that has never been experienced before.
The reason for the decrease in the amount of money sent is due to the spread of the new coronavirus, which causes economic activity to stagnate in the countries where foreign workers are accepted, and workers lose their jobs and their incomes have declined significantly.
International remittances to low and middle-income countries have more than doubled by more than 1.5 in the past decade, reaching a record $554.2 billion in 2019.
These remittances are a living expense for people in developing countries, and they are also a means of acquiring valuable foreign currency, and foreign workers support the economy.
“This is an unprecedented historic decline,” said Dilip Lhasa, the world’s chief economist. In developing countries, many families may fall into poverty, unable to buy food and medicine, and are unable to send their children to school. There are only a few things we can do right away, but first of all, we should focus on protecting the lives and health of workers left behind by the migrant son.”
On top of that, he said, “We have no choice but to develop the developing economy so that workers can work in their own country and create employment opportunities in the private sector.”
Many workers from Asia, the situation in the Gulf states
The Gulf states of the Middle East, which have continued to develop economic development based on abundant oil money, have accepted many migrant workers from Asian countries, but due to the spread of the new coronavirus and record low oil prices, many people are losing their jobs or drastically reducing their salaries, leaving money transfers to families waiting in their home countries.
In the UAE and the United Arab Emirates, foreigners make up more than eight percent of the population, and many have been working in a wide range of industries, from construction to finance, and many have sent to families waiting in their home countries.
However, with the spread of the new coronavirus and record low oil prices, the UAE has been hit hard by the oil industry and hub airports that have become both economic, and foreign workers have been laid off or their salaries have been slashed.
A Bangladeshi worker who was working at a car maintenance factory was closed and continued to have no salary, said, “I was sending all of my basic salary except chips for my hometown children, but now I’m also in trouble with the money to buy my daily meals. I have to consider returning home.”
Led by the UAE government, the large-scale rationing of meals in various parts of the country has become a lifeline for many migrant workers to queue up and eat as their incomes decline.
In addition, there have been a series of calls from embassies and consulates in each country for help, and more than 250,000 people have wished to return home due to unemployment, and more than 250,000 people have been forced to take action, including cash benefits for migrant workers who are struggling with their livelihoods.
What is the current situation in countries that rely on migrant remittances?
Asian countries that have sent migrant workers overseas have been hit hard economically by the decline in remittances to their home countries.
Of these, Pakistan has about 1,000,000 workers working in the Gulf states and Western countries of the Middle East, and remittances from these people account for about half of gdp and gross domestic product, but the number of families who are struggling or reducing their amount swells significantly has increased.
A 32-year-old man living with his wife and four children on the outskirts of the capital Islamabad returned home in March after losing his job in Dubai.
There was no work in Pakistan, and although he had been sending about 50,000 yen a month from his brother and brother who remained in Dubai, his brother was forced to leave earlier this month.
We live in a lot of living expenses because of a significant reduction in remittances. Meals are reduced to one meal a day, and rent and utility bills cannot be paid.
It is said that it is not possible to buy the medicine and the mask of the anti-infection measures of the daughter of one-year-old who has asthma symptoms.
I contacted other relatives in Dubai and asked for help, but they had no job and the situation was getting tougher, and the man said, “At the moment, there is nothing we can do but ask the government for help. I can’t live without immediate support.”
In many cases, some families in need have started to work their children, and the government is rushing to respond by showing a policy of providing up to 12,000 rupees to families and the poor who have lost their income and about 8,000 yen in Japanese yen.