Developing World Loses Billions in Money From Migrant Workers

An economic pillar of developing economies is crumbling because of coronavirus impacts; ‘I’m scared sick.’

By Jon Emont of The WSJ. Excerpts: 

"Migrant workers—from Polish farmhands working the fields of southern France to Filipino cruise-ship workers in the Caribbean—who lost their jobs because of the pandemic’s economic impact are running out of cash to send home, dealing a blow to the fragile economic health of the developing world.

Tens of millions of Indians, Filipinos, Mexicans and others from developing countries working overseas sent a record $554 billion back to their home countries last year. That’s an amount greater than all foreign direct investment in low- and middle-income countries and more than three times the development aid from foreign governments, according to the World Bank.

The drop-off in the payments, known as remittances, has affected life for millions around the globe who rely on the cash for food, fuel and medical care. Families from South Asia to Latin America can’t afford mortgage payments and tuition.

“There are households that critically depend on the remittance lifeline, and that lifeline has been ruptured,” said Dilip Ratha, lead economist on remittances at the World Bank, which estimates that the transfers to developing countries will decline by 20% this year.

That drop would be four times as big as the fall that followed the 2008 financial crisis and the largest drop since the World Bank began recording remittance data in the 1980s."