Remittances continue steadily to paint Bangladesh's monetary resilience

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In Bangladesh, remittances are projected to grow for a price of 8% to around $20 billion, which was estimated at $14 billion for 2020, a likely fall of about 22% on the globe Bank’s projection manufactured in April

The World Bank has projected Bangladesh’s inward remittances to grow about 8%, reaching almost $20 billion in 2020, holding eighth position on earth as a recipient.

However, the amount of money migrant staff send home around the world was projected to decline by 14% by 2021 when compared to pre Covid-19 days as the pandemic and economic crisis has continued to spread.

The global lender made the projection in its latest report, “Covid-19 Crisis through a Migration Lens,” released on Friday.  

“Three large recipients of remittances - Mexico ($39 billion in 2019), Pakistan ($22 billion), and Bangladesh ($18 billion) - stick out as exceptions to the overall pattern. These countries escaped a decline in remittance inflows in the next quarter and seem to register increases in the third one,” reads the report. 

In Bangladesh, remittances are projected to grow for a price of 8% to around $20 billion, which was estimated at $14 billion for 2020, a likely fall of about 22% on the planet Bank’s projection made in April, the report added.

The united states received remittances worth $18.21 billion in the fiscal year 2019-20.

In Bangladesh, the impact of the global financial slowdown has been somewhat countered by the diversion of remittances from informal to formal channels because of the difficulty of carrying money yourself under travel restrictions, said the global lender.

Bangladesh registered a sizable upsurge in remittance inflows in July following the floods that inundated a quarter of its landmass, it added. 

The government’s incentives to transfer remittances have also been helpful in this regard.

Regarding Mexico, a sharp rise in remittance flows seen in Q1 2020 might have been triggered by a 25% depreciation of the peso against the US dollar.

Money transfer and mobile operators face increasing hurdles as banks close their accounts to reduce risks of non-compliance with anti-money laundering (AML) and combating terrorism financing (CFT) standards, the World Bank observed.

To keep these channels open, specifically for lower-income migrants, AML/CFT rules could possibly be temporarily simplified for small remittances, it said.

Strengthening mobile money regulations and identity systems would improve the transparency of transactions and facilitating digital remittances would require bettering access to bank accounts for mobile remittance service providers and senders and recipients of remittances, it added.

In line with the projections, India tops the remittance recipient’s chart with $76 million, while China may be the second with $60 billion remittances and Mexico maybe the third recipient of remittances with $41 billion. Pakistan holds the sixth position with $24 billion remittances.

Remittance in Asia  

Remittances to South Asia are projected to decline by around 4% in 2020 to $135 billion.

In Pakistan, remittances will grow at about 9%, totaling about $24 billion. In India, remittances are projected to fall by about 9% in 2020, to $76 billion.

Remittance flows to East Asia and Pacific region are projected to fall by 11% in 2020 to $131 billion because of the adverse impact of Covid-19.

China and the Philippines are the region’s top recipients, while as a share of GDP, the very best recipients are Tonga and Samoa.

Global remittance scenario

The money migrant personnel send home around the world is projected to decline  by14% by 2021 when compared to pre-Covid-19 situation as the pandemic and financial crisis continue steadily to spread.

The declines in 2020 and 2021 will affect all regions, with the steepest drop expected in Europe and Central Asia by 16% and 8% respectively, followed by East Asia and the Pacific 11% and 4%, the center East and North Africa 8% and 8%, Sub-Saharan Africa 9% and 6%. South Asia by 4% and 11% and Latin America and the Caribbean 0.2$ and 8%.

Remittance flows to low and middle-income countries (LMICs) are projected to fall by 7%, to $508 billion in 2020, accompanied by an additional decline of 7.5% to $470 billion in 2021.

The foremost factors driving the decline in remittances include weak economic growth and employment levels in migrant-hosting countries, weak oil prices and depreciation of the currencies of remittance-source countries against the US dollar.

“The impact of Covid-19 is pervasive when viewed through a migration lens since it affects migrants and their own families who count on remittances,” said Mamta Murthi, Vice President for Human Development and Chair of the Migration Steering Band of the World Bank.

“The World Bank will continue dealing with partners and countries to keep carefully the remittance lifeline flowing, and to help sustain human capital development.”

Stock of migrants to fall in 2020

This year, for the first time in recent history, the stock of international migrants will probably decline as new migration has slowed and return migration has increased, said the WB.

 Initially, the lockdowns and travel bans left many migrant personnel stranded within their host countries, struggling to travel back.

Return migration has been reported in all parts of the world following lifting of national lockdowns, which left many migrant workers stranded in host countries, it added.

In addition, it forecast that rising unemployment, when confronted with tighter visa restrictions on migrants and refugees, was likely to result in an additional increase in return migration.

Countries of origin must find ways of supporting returning migrants in resettling, finding jobs or opening businesses, it suggested.

Source: https://www.dhakatribune.com

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