Region braces for economic shocks . . .
A recent World Bank report, East Asia and Pacific in the Time of COVID-19, shows that the region’s growth outlook for 2020 has been “sharply downgraded” due to the pandemic’s spread and its resulting financial volatility. It also argues that countries that are dependent on external flows of income from tourism and remittances – the money sent by migrants abroad to support their families in their home countries – will be particularly impacted. Remittance recipients generally use these funds for a variety of purposes, like living expenses, school tuition, and medical care.
Some countries highly dependent . . .
COVID-19 poses a significant disruption to remittance flows as migrant workers lose their jobs due to lockdowns and business closures across the region. The most remittance-dependent nations in the Asia Pacific are the Pacific Island states, as well as other countries in South and Southeast Asia like Nepal and the Philippines. For example, Tonga relies on remittances for almost 40 per cent of its gross domestic product (GDP). Nepal’s remittances comprise 30 per cent of that country’s GDP, and in the Philippines, 10 per cent. Bangladesh is preparing for the shortfall by selling its U.S. dollar reserves in order to offset pressure on the market, but other countries have not yet announced how they plan to deal with it.
Canada as a remittance sender . . .
Canada is an important player in the global remittance market, given its popularity for migrant workers. According to the World Bank, in 2019, residents in Canada sent C$7 billion dollars abroad. The top recipients were the Philippines, India, and China. Filipino migrants typically arrive through the temporary foreign worker and caregiver programs, and many of them are the frontline nurses and staff working in nursing homes and hospitals, helping Canadians during this pandemic. There are currently no major disruptions to remittances sent from Canada, as many migrants work in essential services like agriculture, restaurants, and health care. Canada can lessen the negative impact on remittance-receiving families by reducing the high cost of money-transfer fees.
- Reuters: Hungry, stranded and broke: Coronavirus travel bans hit migrant workers
- Statistics Canada: Study on international money transfers from Canada
- World Bank: East Asia and Pacific in the time of COVID-19