According to the latest World Bank note on migration and development, remittances from migrants remained strong in 2020, with a lower-than-expected decline, despite the Kovid-19 epidemic.T
Officially recorded remittances to low and middle-income countries reached $ 540 billion last year, barely 1.6% less than in 2019 before the health crisis. “This decline is less pronounced than in the 2009 financial crisis, when the decline in remittances reached 4.8%.
In addition, the decline is much less brutal than direct foreign investment (FDI) in low- and middle-income countries, which, apart from China, fell by more than 30% in 2020, the Washington-based financial institution international noted. As a result, remittances exceeded the total flow of FDI ($ 259 billion) and official development assistance ($ 179 billion) last year.
For the Middle East and North Africa, remittances from migrants rose 2.3% last year to nearly $ 56 billion – a growth primarily attributed to, according to the World Bank, “persistence of transfers to Egypt and Morocco: they climbed 11% In the case of Gaya Egypt, reached a record level of about 30 billion dollars and 6.5% for Morocco.
Tunisia also benefited from this trend, with an increase of 2.5%. Countries such as Djibouti, Lebanon, Iraq and Jordan have experienced opposite dynamics, with declines of more than 10% in 2020. The continuity of remittances from migrants can be largely explained, specifying, through budget support measures in host countries that have contributed to a more favorable economic situation than expected, normalization of transactions through digital means rather than cash and Cyclical fluctuations in oil prices and exchange rates, along with the increasing use of formal channels.
The actual amount of formal and informal transfers probably exceeds official figures, although the impact of the COVID-19 epidemic on informal flows is difficult to assess. “While Kovid-19 still has devastating effects on families around the world, remittances confirm their role as a lifeline for poor and vulnerable populations”, in a press release, Social Protection Poll and World Bank Job Underlines the global director of. , Michal Rutkowski.
For other regions, remittances increased by 6.5% for Latin America and the Caribbean, compared to 5.2% for South Asia. But the opposite situation has been observed in the regions of East Asia-Pacific (-7.9%), Europe-Central Asia (-9.7%) and Sub-Saharan Africa (-12.5%). According to the World Bank, the “collapse” of inflows into sub-Saharan Africa is almost entirely due to a nearly 28% drop in shipments to Nigeria. Consistent with the expected rebound in global growth in 2021 and 2022, remittances to low and middle-income countries are expected to grow 2.6% to $ 553 billion in 2021, then increase 2.2% to 565 billion in 2022. For World Bank estimates.
Despite significant steps taken by most high-income countries on the vaccination front, the level of coronavirus infection in many large developing economies remains high, causing some uncertainty during remittances. For 2021, remittances to the MENA region should increase by 2.6%, thanks to a slight improvement in the euro area and the backdrop of a slowdown in shipments from Gulf Cooperation Council countries.