World Bank expects fall of remittances to MENA by 20% this year
WASHINGTON - Remittances sent by migrants to their home countries, including in the Middle East and North Africa (MENA) region, are expected to fall by about 20% this year amid the global economic slowdown caused by the coronavirus pandemic, the World Bank said on Wednesday.
The Bank does, however, expect a slow recovery of remittances to MENA in 2021.
Job losses and lost wages are expected to leave migrants residing in wealthier nations unable to send as much money to poorer home countries already suffering from coronavirus shutdowns, the report says.
Millions of migrants hailing from the MENA region reside in Europe, the US and Arab Gulf countries. Their money transfers and investments are vital to their home countries.
“Remittances are a vital source of income for developing countries. The ongoing economic recession caused by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies,” said World Bank Group President David Malpass. “Remittances help families afford food, healthcare and basic needs."
The flow of remittances to poorer countries in Europe and Central Asia is expected to drop 27.5%, followed by sub-Saharan Africa with 23.1%, South Asia at 22.1%, the Middle East and North Africa at 19.6%, Latin America and the Caribbean with 19.3% and East Asia and the Pacific with 13%.
The 19.6% drop to MENA is projected to bring total remittances to the region to $47 billion this year. In 2019, remittances increased by 2.6%.
"The anticipated decline is attributable to the global slowdown as well as the impact of lower oil prices in GCC countries," said the report.
"Remittances from the euro area would also be impacted by the area’s pre-COVID-19 economic slowdown and the depreciation of the euro against the US dollar," it added.
But the report predicted a recovery of remittances to the MENA region in 2021, at a pace of about 1.6%.
The World Bank recommended that governments and businesses work to protect immigrants from the economic and health effects of the coronavirus, saying migrant labourers were often excluded from programmes meant to cushion the effects of the pandemic. The organisation also encouraged states and companies to lower the costs of sending money home.
(With The World Bank and news agencies)