Coronavirus to cut remittances to Asia-Pacific by $54.3 billion: ADB Featured
10 August, 2020. Remittance receipts in Asia and the Pacific will fall by as much as $54.3 billion in 2020 due to large-scale unemployment and wage reduction among migrant workers hit by the coronavirus pandemic, according to a study by the Asian Development Bank.
The margin of fall would be equivalent to 19.8 percent of remittance flows in the region in 2018, the Manila-based lender said.
Migrants from the Asia-Pacific accounted for 33 percent of migrant workers worldwide in 2019, the largest global share, and remittances to the region -- amounting to $315 billion in 2019 -- are a lifeline for many poor and vulnerable families left behind, according to the ADB.
"This pandemic threatens to severely set back economic, social and development gains in Asia and the Pacific, reverse progress on poverty reduction, and throw economies into recession," said ADB President Masatsugu Asakawa.
Nations in particular where remittance shares to gross domestic product and per capita remittances are high, such as Tonga, Samoa, and other Pacific states, are likely to face severer effects from the decline in remittance inflows induced by the pandemic, the regional lender said.
The envisaged decline in remittance flows to the region is mainly attributable to a $22.5 billion fall in remittances from the Middle East, which accounts for 41.4 percent of the total remittance loss in the region.
This is followed by a $20.5 percent contraction in remittances from the United States, or a 37.9 percent of the total loss.
By percentage, the Middle East and Russia experienced the sharpest decline -- over a third -- primarily reflecting the effects of low demand and oil prices on remittances.
To ensure the flow of remittances to the Asia-Pacific, the ADB has suggested temporarily exempting remittance service providers from various regulations such as disclosure requirements, and give tax incentives for service providers that reduce remittance fees.
In the wake of the pandemic, the lender tripled the size of its response package to the novel coronavirus disease known as COVID-19 to $20 billion in April, aiming for quicker and more flexible delivery of assistance in the region.
