Viewpoint: How to Save Vital Remittances to the Developing World
By Hafed Al-Ghwell
Even before the coronavirus pandemic, funds sent home by migrant workers were a lifeline for tens of millions of families and dependents, and a crucial source of income for developing world governments. At $550 billion, remittances in 2019 were greater than all foreign direct investment into low and middle-income economies, and more than triple the development aid from Organization for Economic Co-operation and Development (OECD) countries.
The global economy is facing a major downturn, and should tensions between the US and China persist, recovery will be painful and slow. For wealthier nations, strong safety nets, unemployment benefits and even direct payments can dampen the worst of the effects. Low and middle-income countries are not so fortunate, especially since uninterrupted remittance inflows are a crucial buffer that allow families, normally subsisting on a few dollars a day, to meet unexpected expenses and possibly invest in better futures.
Photo courtesy of AMISOM Public Information.