COVID-19 is without a doubt a public health emergency. It has, however, thrown the global economy into shambles. It has harmed virtually every business sector, resulting in worldwide labor market contractions.
The loss of jobs and labor earnings has had an influence on global remittances. Jobs are slowly returning as global economic activity improves. These signs, however, remain significantly lower than they were before to the current coronavirus pandemic.
On a worldwide scale, the COVID-19 epidemic has caused a deep and widespread economic crisis that has had a significant impact on migrant workers’ ability to maintain the level of remittances they send back to their home countries. The World Economic forum expects the lowest turnout in remittances in recent history, with flows anticipated to drop by 20% by 2020 compared to present levels.
What impact does COVID-19 have on migrant remittances?
Migration is both a source of revenue and a source of nourishment. People who work in other countries frequently send money home for personal and business reasons. Around 800 million individuals around the world benefit from such remittances. Food, healthcare, education, and other basic requirements account for more than 70% of these funds.
Remittances from overseas migrants are also a vital source of financing for a number of countries. They help a country’s income base during a recession by encouraging consumption and investments.
Losses in working hours and labor income
In February 2021, a year after the pandemic recession began, the global economy was still down 168 million jobs compared to February 2020, the last month before COVID-19’s economic consequences began. To restore employment levels, we must assess how many jobs would have been created since February 2020, in addition to replacing those 9.5 million lost jobs.
Job growth averaged 202,000 new jobs per month in the 12 months leading up to the pandemic slump. An estimated 32.4 million additional employment may have been produced if the COVID-19-driven slump had not occurred. Adding these to the actual employment losses from February 2020, the global labor market was short 11.9 million jobs in February 2021.
Job losses are not uniformly spread across the labor market, according to numerous analyses of the pandemic economy. The data analysis edition of our annual worldwide reports. We highlighted in our first study how low-paid people have been affected the hardest by the recession: by 2020, 80% of job losses will be among the lowest quarter of wage earners. In this research, we look at the different sorts of jobs that have been lost as a result of the pandemic recession, as well as the occupations and governments that have been affected.
Workers’ mobility is restricted by closed borders
January to May: In response to the rapidly expanding public health catastrophe, countries implemented a slew of national lockdowns, various travel restrictions, and health requirements in the first phase. Border closures on such a large scale were unusual, with many taking place with little coordination. Governments had issued or extended 43,300 travel measures by the end of March. Movements of all kinds were severely restricted. In April and May, for example, the number of passengers on international flights fell by 92% compared to the same months in 2019.
June to September: Various points of entry, particularly airports, reopened in stages during this time. Travel bans are progressively being substituted by health precautions such as certificates of pre-departure COVID-19 tests, quarantine procedures, or health declarations. Throughout this time, various techniques from around the world began to merge.The varied attitudes of island governments were most evident in their tactics: whereas New Zealand and Australia pursued virus-eradication strategies and maintained border barriers, others, like the Caribbean islands, opened up to tourists.
October to December: The rest of the year was a mixed bag, with countries attempting to replace travel restrictions with health standards while fighting a second (and in some cases, third) wave of illnesses and dealing with the appearance of new virus strains. Chile, Mexico, and the United Arab Emirates are among the countries that have opened their doors to tourism. Health certificates have become the most popular form of medical documentation.
While the first countries battled the virus, third-world countries like the Philippines were helpless due to a lack of overall resources. The data for the entire year reveals the lowest peak of economic downturn in history. Countless enterprises have gone bankrupt as a result of limitations imposed by each town.
But, business remittance shows toughness and resilience during pandemic.
Senior economist Nicholas Mapa of ING Bank Manila argues, on the other hand, that the peso’s strength, which is a product of the Philippine economy’s fragility, would continue to affect consumers who rely on dollars.
Despite the valor of our modern-day heroes, we must recognise the decreasing influence of once-dominant [foreign exchange] flows from beyond. It’s worth noting that, when exchange rate swings are included in, remittances are actually down far more than the World Bank’s 0.8 percent estimate.” Mapa said in a statement.
Remittances have actually decreased by 4.8 percent in Philippine peso terms, according to Mapa.
Inflation
As many people struggled to find jobs, food prices in the country rose. The Philippines’ inflation rate rose to 4.7 percent in February 2021, the highest since January 2019, when it was 4.4 percent. The increase was mostly due to rising meat prices, according to National Statistician Dennis Mapa. The cost of transportation has also risen.
The Department of Agriculture has lobbied for a price ceiling on pork and chicken in Metro Manila to keep prices under control. According to the organization, producers were also instructed to supply additional pork to the capital region.
Conclusion
People in low-income, fragile states benefit from remittances, which also provide much-needed tax revenue. In these already struggling countries, falling remittances are expected to increase budgetary and socioeconomic constraints.
While the actual impact of COVID 19 will be determined by the nature, form, and length of the economic downturn, it does give us a chance to improve certain areas of the migration continuum, such as migrant and diaspora economic contributions. Whatever perspective we take on the post-COVID-19 world and how it will affect migration, we are approaching a tipping point that has the ability to transform this phenomenon into something that benefits all governments and people.
For this year 2021, we are still on the way of restoring losses and finding ways to create something new from this epidemic. Business remittance will always provide services no matter what situation this world is in.
