COVID-19 to Cut off Remittance Flow to Asia

Job and income losses have been among the economic symptoms of COVID-19, affecting remittance payments in some of the countries most reliant on them. Researchers at the Asian Development Bank expect 2020 remittance inflows to the APAC region to be more than $54 billion below 2018 levels, an overall loss of almost 20 percent. Countries in South Asia are expected to be affected disproportionately, with losses ranging from almost 29 percent in Nepal to 23 percent in India.

Many overseas workers work in precarious conditions and lack job security, making them especially vulnerable to the economic effects of COVID-19 on top of placing them at a higher risk of contracting the disease. Many of the workers need to show up to work physically, lack sick leave and occupy closed quarters.

As seen in data by the World Bank and Knomad, Asian countries are among the biggest remittance receivers in the world. After India, China and Mexico, the Philippines received the fourth-highest sum of $33.8 billion in remittances in 2018 – 10 percent of its GDP. In Pakistan and Bangladesh, that number was at almost 7 percent ($21 billion) and almost 6 percent ($15.5 billion), respectively. In relative terms, Nepal is among the countries in the world most reliant on the remittances that make up around 27 percent of its GDP. Its neighbors in Central Asia are equally reliant on remittance payments to keep their economies afloat.

Asian remittance senders lost out on most wages in the Middle East, followed by the United States and Europe. Countries on the Gulf have for a long time employed countless migrant workers, which in many places outnumber native populations. Asian workers are common in the construction, garment and domestic work sectors – all industries where orders dried up and people were let go during the current pandemic.