Phase II: COVID-19 Crisis through a Migration Lens - Migration and Development Brief 33 - KNOMAD
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Phase II: COVID-19 Crisis
through a Migration Lens
Migration and Development Brief 33
October 2020Migration and Development Brief reports an update on migration and remit- tance flows as well as salient policy developments in the area of international migration and development. The Global Knowledge Partnership on Migration and Development (KNOMAD) is a global hub of knowledge and policy expertise on migration and development. It aims to create and synthesize multidisciplinary knowl- edge and evidence; generate a menu of policy options for migration policy makers; and provide technical assistance and capacity building for pilot projects, evaluation of policies, and data collection. KNOMAD is supported by a multi-donor trust fund established by the World Bank. The European Commission, and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH commissioned by and on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), and the Swiss Agency for Development and Cooperation (SDC) are the contributors to the trust fund. The views expressed in this paper do not represent the views of the World Bank or the sponsoring organizations. All queries should be addressed to KNOMAD@worldbank.org. KNOMAD working papers, policy briefs, and a host of other resources on migration are available at www.KNOMAD.org.
Phase II: COVID-19 Crisis through a Migration Lens Migration and Development Brief 33 October 2020 Migration and Remittances Team Social Protection and Jobs World Bank
© 2020 International Bank for Reconstruction and Ganesh Seshan, and Nadege Desiree Yameogo.
Development/The World Bank. 2020. “Migration and Development Brief 33:
Phase II: COVID-19 Crisis through a Migration Lens.”
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Attribution—Please cite the work as follows: Dilip
Ratha, Supriyo De, Eung Ju Kim, Sonia Plaza,Phase II: COVID-19 Crisis Through a Migration Lens
Contents
Summary ....................................................................................................................................vii
Acknowledgements.....................................................................................................................xi
1. Evolving COVID-19 Situation and Its Impact on Migration........................................2
1.1 Resurgence of COVID-19 in Major Migrant-Hosting Countries.................................................. 2
1.2 Impact on Migrants....................................................................................................................... 3
1.3 Remittance Flows Are Expected to Decline in 2020 and 2021..................................................... 7
1.4 Recent Progress toward Migration-Related Sustainable Development Goals ......................... 16
1.5 Policy Responses Should Be Inclusive of Migrants and Their Families....................................... 19
2. Regional Trends in Migration and Remittance Flows...............................................22
2.1 Remittances to East Asia and the Pacific Held Steady in 2018.................................................. 22
2.2 Remittances to Europe and Central Asia Tumbled in 2020........................................................ 24
2.3 Remittances to Latin America and the Caribbean Are Expected to Fall Slightly...................... 27
2.4 Remittances to the Middle East and North Africa Posted a Sharp Drop................................... 30
2.5 Remittances to South Asia Projected to Decrease in 2020......................................................... 32
2.6 Remittances to Sub-Saharan Africa Continued to Accelerate in 2018...................................... 34
References................................................................................................................................. 38
Endnotes................................................................................................................................... 41
List of Figures, Tables, and Boxes
Figure 1.1 Recent Upsurge in COVID-19 Cases in the United States and Euro Area
Mirrors the Spanish Flu in 1918–20...................................................................................................... 2
Figure 1.2 United States Jobs Fell More for Foreign- than Native-Born Workers
During the COVID-19 Crisis................................................................................................................. 3
Figure 1.3 First-Time and Pending Asylum Applications in the EU-27 .............................................. 5
Figure 1.4 Potential Returnees in the EU-28 and United States, 2009–19......................................... 6
Figure 1.5 Potential Returnees (Undocumented Detected) in the United States
(panel a) and EU-28 (panel b), 2008–19 ............................................................................................ 7
Figure 1.6 Remittance Flows to Low- and Middle-Income Countries Projected
to Remain Higher than FDI Flows......................................................................................................... 8
Figure 1.7 Top Remittance Recipients, by Total (panel a) and by Share of
GDP (panel b), 2020 .......................................................................................................................... 10
Figure 1.8 Lower Oil Prices Have Affected Outward Remittance Flows from Russia
(panel a) and Saudi Arabia (panel b), Q1 2007 through Q2 2020................................................... 11
Figure 1.9 Projected Growth of Remittances by Region, 2020......................................................... 12
Figure 1.10 High-Frequency Data Indicate Uneven Changes in Remittance Flows
during Q2 and Q3, 2020 .................................................................................................................... 13
vMigration and Development Brief 33 Figure 1.11 Remittance Flows to Mexico Rose in Q2 in a Response to a Depreciation of the Peso (panel a), but a Sharp Drop in Hispanics’ Employment Rate in the United States Is Likely to Dampen These Flows (panel b)...................................................................................................... 14 Figure 1.12 Remittances from GCC Countries to Pakistan Rose in Q2 and Q3 of 2020.................. 15 Figure 1.13 Remittances from the United States to Pakistan Fell in Q2 and Q3 of 2020................ 15 Figure 1.14 Global Average Cost of Sending $200, 2011–20 .......................................................... 16 Figure 1.15 How Much Does It Cost to Send $200? A Comparison of Global Regions in 2019 and 2020 ..................................................................................................... 17 Figure 2.1 Top Remittance Recipients in the East Asia and Pacific Region, by Total Amount (panel a) and Share of GDP (panel b), 2020.............................................................. 22 Figure 2.2 Remittance Fees to the Philippines Are among the Lowest in the East Asia and Pacific Region ............................................................................................................................. 23 Figure 2.3 Top Remittance Recipients in the Europe and Central Asia Region, by Total Amount (panel a) and Share of GDP (panel b), 2020.............................................................. 25 Figure 2.4 Remittances* from Russia Declined during 2020............................................................ 25 Figure 2.5 Russia Remained the Least Expensive Country from Which to Send Money in Europe and Central Asia ........................................................................................... 26 Figure 2.6 Remittance Flows to Latin America and Caribbean Started Partially Recovering in June 2020..................................................................................................................... 27 Figure 2.7 Top Remittance Recipients in Latin America and the Caribbean, by Total Amount (panel a) and Share of GDP (panel b), 2020.......................................................... 28 Figure 2.8 Cost of Sending Money to Latin America and the Caribbean Remained Stable ........... 29 Figure 2.9 US Border Patrol Southwest Border Apprehensions/Inadmissibles, FY15–FY20........... 30 Figure 2.10 Top Recipients of Remittances in the Middle East and North Africa Region, by Total Amount (panel a) and Share of GDP (panel b), in 2020 ..................................................... 31 Figure 2.11 Sending Money within the Middle East and North Africa Is Less Expensive than Sending Money from Outside ........................................................................................................... 32 Figure 2.12 Top Remittance Recipients in South Asia, by Total Amount (panel a) and Share of GDP (panel b), in 2020................................................................................................................... 33 Figure 2.13 The Costs of Sending Remittances to South Asia Varied Widely across Corridors...... 34 Figure 2.14 Remittance Inflows to Sub-Saharan Africa to Decline, by Total Amount (panel a) and Share of GDP (panel b), in 2020........................................................... 35 Figure 2.15 Five Least (panel a) and Most Expensive (panel b) Remittance Corridors in Sub-Saharan Africa........................................................................................................................ 36 Table 1.1 Estimates and Projections of Remittance Flows to Low- and Middle-Income Regions....................9 Box 1.1 Refugee Movements and Forced Displacements .................................................................. 5 Box 1.2 Foreign Direct Investment to Decline in 2020......................................................................... 8 Box 1.3 International Working Group on Improving Data on Remittances...................................... 20 vi
Phase II: COVID-19 Crisis Through a Migration Lens
Summary
This Migration and Development Brief provides The adverse effects of the crisis in terms of loss of
updates on global trends in migration and jobs and earnings, and exposure to and infection
remittances. It highlights developments related with COVID-19, have been disproportionately
to migration-related Sustainable Development high for migrants, especially those in informal
Goal (SDG) indicators for which the World sectors and lower-skilled jobs. Having jobs has
Bank is a custodian: increasing the volume of not shielded migrant workers from income losses
remittances as a percentage of gross domes- during the crisis. Anecdotal reports suggest that
tic product (SDG indicator 17.3.2), reducing migrants, especially those living in dormitories or
remittance costs (SDG indicator 10.c.1), and camps, are particularly vulnerable to the risk of
reducing recruitment costs for migrant workers infection from the COVID-19 virus.
(SDG indicator 10.7.1).
Based on the trajectory of economic activities in
The economic crisis induced by COVID-19 major migrant-hosting countries, especially the
could be long, deep, and pervasive when United States, European countries, and the Gulf
viewed through a migration lens. In October Cooperation Council countries, remittance flows
2020, COVID-19 case numbers rose again to to low- and middle-income countries (LMICs)
surpass 44 million. The number of fatalities were projected to decline by 7.2 percent, to $508
surpassed 1.1 million. A recurrence of COVID- billion in 2020, followed by a further decline of
19 phases accompanied by lockdowns, travel 7.5 percent, to $470 billion in 2021. The pro-
bans, and social distancing could not be ruled jected declines in remittances were the steepest
out well into 2021. Although economic activities in recent history, and steeper than the 5 percent
and employment levels around the world had decline recorded during the 2009 global reces-
rebounded to varying degrees from the depths sion. The foremost factors driving the declines
reached in the second quarter (Q2) of 2020, were weak economic growth and uncertainties
they were still far from pre-crisis levels, and the around jobs in migrant-hosting countries, a
near-term outlook remained uncertain. weak oil price, and, in many remittance-source
countries, an unfavorable exchange rate against
For the first time in recent history, the stock the US dollar.
of international migrants was likely to decline
in 2020, as new migration slowed and return The outlook for remittances presented in this
migration increased. Initially, the lockdowns Brief indicates a more gradual and prolonged
and travel bans left many migrant workers decline (continuing into 2021) than our April
stranded in their host countries, unable to travel outlook, which forecast a sharper decline in
back. Later in the year, however, return migra- 2020 followed by a modest recovery in 2021.
tion was reported across all parts of the world. Yet the outlook for remittances remains uncer-
Furthermore, rising unemployment in the face of tain and will depend on COVID-19’s impact on
tighter visa and mobility restrictions was likely to global growth. This is linked, in turn, to uncer-
result in a further increase in return migration. tainties regarding the effectiveness of efforts to
contain the spread of the disease.
viiMigration and Development Brief 33
Monthly or quarterly data on remittances Europe and Central Asia (16 percent in 2020 and
reveal a common intra-year pattern in 2020: 8 percent in 2021), followed by East Asia and the
a sharp decline in April and May followed by Pacific (11 percent, 4 percent), the Middle East
a slow but partial recovery. Most countries, and North Africa (8 percent, 8 percent), Sub-
notably those in Europe and Central Asia, Saharan Africa (9 percent, 6 percent), South Asia
registered steep declines in remittances in (4 percent, 11 percent), and Latin America and
Q2. There was a recovery in remittance flows the Caribbean (0.2 percent, 8 percent).
starting in June. Following the hiatus of April
and May, it appears that some migrants drew Beyond humanitarian considerations, providing
on their savings to send money home, but that migrants access to housing and health care is
cannot be sustained for long. Another likely necessary to keep host communities safe from
reason for the observed partial recovery of the pandemic. Migrants are on the frontline,
remittance flows in June is a shift in flows from saving people from COVID-19 in hospitals and
informal (unrecorded) hand-carrying to formal science labs. They are on the frontline in stores
(recorded) remittance channels. This is espe- and restaurants, farms and factories, keeping
cially true among relatively high-skilled migrant these businesses running. Also, it is worth noting
workers with access to digital remittance that every dollar spent on supporting a migrant
services. A third reason is that some migrants is likely to increase remittances and thereby
were able to access cash transfers offered support many poor people in distant countries.
by host country governments. Three large
recipients of remittances—Mexico, Pakistan, Government policy responses, especially the
and Bangladesh—stand out as exceptions to provision of access to health care, housing,
the pattern mentioned above: these countries and education, should be inclusive of migrants
escaped a decline in Q2 and seem to register in host countries and their families in origin
increases in Q3. countries. Stranded migrants need help from
governments and the development community
Even though remittance flows will decline in in both host and transit countries. Migrant
2020, their relative importance as a source of workers may need protection from abuse or
external financing for LMICs is expected to wage theft by unscrupulous employers. Origin
increase. Remittance flows to LMICs touched a countries must find ways of supporting return-
record high of $548 billion in 2019, larger than ing migrants in resettling and finding jobs or
foreign direct investment (FDI) flows ($534 opening businesses. Many host countries and
billion) and overseas development assistance origin countries would require grants or conces-
(about $166 billion). The gap between remit- sional financing from third parties to provide
tance and FDI flows is expected to widen fur- support to migrants from other countries.
ther in 2020 as FDI flows decline more sharply
than those of remittances. Also, governments must support remittance
infrastructure, including by recognizing remit-
The declines in 2020 and 2021 will affect all tance services as essential, reducing the burden
regions, with the steepest drops expected in of remittance fees on migrants, incentivizing
viiiPhase II: COVID-19 Crisis Through a Migration Lens
digital money transfers, and mitigating factors including of stranded migrants and returning
that prevent customers or service providers of migrants. There is a pressing need to improve
digital remittances from accessing banking ser- relevant data collection systems. The World
vices. The governments of the United Kingdom Bank, through the Global Knowledge Program
and Switzerland, as well as the International on Migration and Development (KNOMAD), is
Fund for Agriculture Development, United launching an International Working Group on
Nations Capital Development Fund, and World Improving Data on Remittances in collaboration
Bank have issued calls to action to keep remit- with national statistical offices, central banks,
tances flowing. and selected international organizations to
improve data on remittances and international
Finally, the crisis has exposed significant data cooperation in the collection and dissemination
gaps that have prevented real-time monitoring of such data.
of remittance flows and migratory movements,
ixx
Phase II: COVID-19 Crisis Through a Migration Lens
Acknowledgements
This Brief was prepared by Dilip Ratha, and support. Useful comments and contri-
Supriyo De, Eung Ju Kim, and Nadege Desiree butions were received from the World Bank’s
Yameogo of the Migration and Remittances regional chief economists (Martin Rama, Hans
Unit of the Jobs Group in the Social Protection Timmer), members of the Migration Steering
and Jobs Global Practice; Sonia Plaza of the Group (Iffath Sharif, Ulrich Zachau), Harish
Finance, Competitiveness, and Innovation Natarajan, Jean Denis Pesme, and Emile J. M.
Global Practice; and Ganesh Seshan of the Van der Does de Willebois. Thanks to Rebecca
Poverty Global Practice. Thanks to Michal Ong for communications support and Fayre
Rutkowski and Ian Walker for helpful comments Makeig for editing.
xiMigration and Development Brief 33 1
Phase II: COVID-19 Crisis Through a Migration Lens
1. Evolving COVID-19 Situation and
Its Impact on Migration
1.1 Resurgence of COVID-19 in Major Judging from the experiences of the Spanish
Migrant-Hosting Countries flu a century ago, a recurrence of COVID-19
phases in major migrant-hosting countries
In October 2020, COVID-19 case numbers rose cannot be ruled out well into 2021. In Migration
again in many countries, especially in major and Development Brief 32 (World Bank 2020c),
migrant-hosting countries, notably the United we pointed out that the Spanish flu lasted two
States and European countries (figure 1.1, years (1918–20) and had three distinct phases:
panel a). On October 27, 2020, the number of phase 2 of the Spanish flu was the deadliest,
cases surpassed 44 million and the number of followed by a phase 3 that had a higher mor-
fatalities surpassed 1.1 million. The virus has tality rate than phase 1 (figure 1.1, panel b).
affected people in every country.
Figure 1.1 Recent Upsurge in COVID-19 Cases in the United States and Euro Area
Mirrors the Spanish Flu in 1918–20
a. COVID-19 daily new cases b. Deaths from Spanish flu in the United Kingdom
(7-day moving average, thousands) (per 1,000 persons, 1918–20)
140
120 United States 25
Euro Area
100
20
80
15
60
10
40
5
20
0 0
20
20
0
0
0
20
0
20
20
18
18
8
8
19
9
91
02
02
02
02
91
91
19
19
19
20
20
20
20
20
-1
-1
-1
-2
-2
-2
l-2
b-
n-
g-
n-
n-
b-
g-
p-
pr
ct
ec
ar
pr
ay
Ju
Ju
Au
Fe
Ju
Ja
Au
Fe
Se
O
A
M
A
D
M
Source: Spanish flu data are based on Taubenberger and Morens (2006, 15); COVID-19 data are from the Johns Hopkins
University Coronavirus Resource Center.
2Migration and Development Brief 33
1.2 Impact on Migrants than native-born workers. According to the
Organisation for Economic Co-operation and
Travel restrictions, lockdowns, and social Development (OECD), the share of the work-
distancing measures imposed in response to ing-age population with jobs fell by 4.0 per-
COVID-19 have inflicted enormous adverse centage points, to 64.8 percent, in Q2 2020, the
effects on lives and livelihoods. An estimated lowest figure since Q4 2010 (OECD 2020a).2
88–115 million persons are thrown back into High-frequency data are not available on the
severe poverty as a result of the economic crisis employment levels of foreign workers in most
(World Bank 2020a).1 Although by October countries. Anecdotally, however, foreign work-
2020, economic activities and employment lev- ers have lost jobs in relatively large numbers.
els around the world had rebounded to varying In the United States, for example, compared
degrees from the depths reached in the second to the pre-crisis level of February 2020, the
quarter (Q2) of the same year, they were still employment level of foreign-born workers
far from pre-crisis levels, and the near-term declined by 21 percent in April, sharper than
outlook remained uncertain. the 14 percent decline in the employment of
native-born workers (figure 1.2). Since then,
The adverse effects of the crisis in terms of loss although the employment level has improved
of jobs and earnings, and exposure to and for both categories of workers, it is still down by
infection with COVID-19, have been dispro- 12 percent for foreign-born workers (and by 5
portionately high for migrants, especially for percent for native-born workers). (The recov-
those in informal sectors and relatively low- ery has been somewhat stronger for Hispanic
skilled jobs. In times of crisis, migrants tend to workers, which has helped keep remittances
be more vulnerable to risks of unemployment flowing to Latin America and the Caribbean.)
Figure 1.2 United States Jobs Fell More for Foreign- than Native-Born Workers During
the COVID-19 Crisis
Index (Feb. 2020 = 100)
100
95
90
85
80
75
0
20
0
20
20
0
20
-2
0
-2
r-2
g-
l-2
b-
p-
ay
n-
ar
Ap
Au
Fe
Se
Ju
Ju
M
M
Native Born Foreign Born Hispanic
Source: US Bureau of Labor Statistics.
3Phase II: COVID-19 Crisis Through a Migration Lens
Having jobs has not shielded workers from cleaning, and maintenance were foreign born;
suffering income losses during the crisis. nearly one-third of workers in service occupa-
According to the International Labour tions (including food preparation and serving,
Organization (ILO), global labor income personal care, and transportation) were
losses (before considering income support foreign born in 2019.
measures) declined by 10.7 percent during the
first three-quarters of 2020 compared to the As new migration flows are reduced to a
same period in 2019. The estimated income trickle and return migration surges, 2020 may
losses amounted to $3.5 trillion, or 5.5 percent well become the first year in recent decades
of global gross domestic product (GDP) (ILO to mark an actual fall in the stock of inter-
2020). The loss of wages and earnings was national migrants. Amid travel bans and
likely higher for migrant workers. Again, there restrictions on cross-border mobility set in
is a paucity of high-frequency data on earnings place since March 2020 in several countries,
of foreign workers. Looking at historical data a smaller number of people crossed borders
from the United States, during the 2009 global during the first six months of 2020. According
recession, the earnings of the foreign born as to the provisional results of Germany’s migra-
a share of native-born earnings fell from 79.9 tion statistics, the number of people arriving
percent in 2008 to 79.1 percent in 2009 and in the first half of 2020 was down 29 percent
77.5 percent in 2010. (Destatis 2020). Australia predicts that net
migration numbers will fall from 154,000 in the
Migrants working in the informal sector and 2019–20 financial year to a net loss of 72,000
irregular (undocumented) migrants are par- in 2020–21, a first since World War II (SBS
ticularly vulnerable during this crisis. Not only News 2020). According to the International
are they suffering from a loss of income and Migration Outlook 2020, issuances of new
employment, but also are excluded from social visas and permits in OECD countries fell by 46
security and cash transfer programs imple- percent in the first half of 2020 compared with
mented by host country governments. As such the same period in 2019, registering the largest
they are more vulnerable to income loss and drop ever recorded (OECD 2020c).
poverty during the COVID-19 crisis, as we have
seen in the case of Venezuelans in Colombia, Also, cross-border movement of refugees and
Peru, and Ecuador or of South Asian migrant asylum seekers seems to have declined due to
workers in the Gulf Cooperation Council (GCC) the crisis, although more recent data are not
countries. yet available. The number of first-time asylum
seekers to the 27 European Union countries
On top of this, anecdotal reports suggest that (EU-27) fell from a peak of around 162,050 in
migrants living in dormitories or camps are October 2015 to around 29,415 in August 2020
particularly vulnerable to the risk of infection (figure 1.3). The number of persons awaiting
by the COVID-19 virus.3 Migrant workers tend a decision on their asylum cases fell from
to be in essential occupations that cannot be about 1.2 million in September 2016 to just
undertaken from home. In three‑quarters of around 0.34 million in August 2020. According
OECD countries, the share of immigrants able to the United Nations High Commissioner for
to telework is at least 5 percentage points Refugees (UNHCR), as of June 2020, there
below that of their native-born counterparts were around 79.5 million forcibly displaced
(OECD 2020b). In the United States, 57 persons around the world (box 1.1).
percent of all workers in building, grounds
4Migration and Development Brief 33
Figure 1.3 First-Time and Pending Asylum Applications in the EU-27
(Thousands)
1,200
Pending asylum applications
1,000
800
600
400
200 First-time asylum seekers
0
Ja 7
Ap 8
Ju 8
O 8
Ja 8
Ap 9
Ju 9
O 9
Ja 9
Ap 0
Ju 0
0
Ja 6
Ap 7
Ju 7
O 7
Ja 4
Ap 5
Ju 5
O 5
Ja 5
Ap 6
Ju 6
O 6
Ap 4
Ju 4
O 4
1
r-1
l-1
-1
1
r-1
l-1
-1
2
r-2
l-2
r-1
l-1
-1
1
r-1
l-1
-1
1
r-1
l-1
-1
1
1
r-1
l-1
-1
n-
n-
n-
n-
n-
n-
n-
ct
ct
ct
ct
ct
ct
Ja
Source: Eurostat.
Box 1.1 Refugee Movements and Forced Displacements
According to the United Nations High million), Afghanistan (2.7 million), South Sudan
Commissioner for Refugees, as of June 2020, (2.2 million), and Myanmar (1.1 million). The
there were around 79.5 million forcibly dis- top host countries for refugees and internally
placed persons around the world, including displaced persons are Turkey (3.6 million),
26.0 million refugees, 45.7 million internally Colombia (1.8 million), Pakistan (1.4 million),
displaced persons, 4.2 million asylum seekers, Uganda (1.4 million), Germany (1.1 million),
and 3.6 million Venezuelans displaced abroad.4 Sudan (1.1 million), Iran (1 million), Bangladesh
More than two-thirds of all refugees and (0.9 million), Ethiopia (0.7 million), and Jordan
Venezuelans displaced abroad came from just (0.7 million).5
five countries: Syria (6.6 million), Venezuela (3.6
Even as new migration flows and refugee from the GCC countries, returned to countries
movements have declined, the crisis has led to such as India, Pakistan, and Bangladesh. Some
an increase in return migration. Initially the migrants had to be evacuated by governments.
lockdowns and travel bans left many migrant For instance, India repatriated over 600,000
workers stranded in their host countries, unable stranded migrants using special flights and
to travel back. More recently, however, return shipping vessels. According to some reports,
migration has been reported in all parts of the Egypt faces the specter of growing return
world. Many international migrants, especially migration, with estimates suggesting up to
5Phase II: COVID-19 Crisis Through a Migration Lens
1 million are returning (Cairo Review 2020; The surge in return migration is likely to prove
OECD 2020d). According to the Philippine burdensome for the communities to which
Overseas Labor Office, over 230,000 over- migrants return, as they must provide quar-
seas Filipino workers were repatriated to the antine facilities in the immediate term and
Philippines as of early October, representing support housing, jobs, and reintegration efforts
about one-tenth of workers overseas and in the medium term.6
almost 50 percent of workers who lost their
jobs. About 120,000 migrant workers are said Furthermore, rising unemployment in the
to have returned from Thailand to Cambodia face of tighter visa and mobility restrictions
(this is more than 10 percent of all Cambodian is likely to result in a further increase in return
workers in that country). The Ukrainian govern- migration. Already in 2019, the number of
ment claimed in April that 2 million Ukrainians potential (involuntary) returnees had risen to
working abroad had returned to the country over 6 million in the EU-28 (which included the
due to the pandemic. Tajikistan also reported United Kingdom) and 4.5 million in the United
that the number of returning migrant workers States (figure 1.4).7 In Europe, the increase
rose sharply in February and March from in potential returnees was mainly a result of
Kazakhstan and Russia, which account for asylum applications filed in 2015 that were
more than 90 percent of Tajik migrants. Official subsequently rejected (figure 1.5, panel b).8 In
numbers from Colombia stated that 113,000 the United States, the increase was a result of
Venezuelans had returned to Venezuela by the increased enforcement of immigration regula-
first week of October. tions and detection of undocumented persons
in 2019 (figure 1.5, panel a).9
Figure 1.4 Potential Returnees in the EU-28 and United States, 2009–19
(Million)
7.0 EU-28 Includes
Asylum Seekers
6.0
US
5.0
4.0
3.0
2.0
1.0
0.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Calculations using data from Eurostat and the US Department of Homeland Security.
Note: Asylum seekers are first-time asylum applicants from non–EU-28 countries. The EU-28 included the United Kingdom.
Undocumented detected stockt = undocumented detected stockt-1 + new undocumented detectedt - returnedT.
6Migration and Development Brief 33
Figure 1.5 Potential Returnees (Undocumented Detected) in the United States
(panel a) and EU-28 (panel b), 2008–19
a. (United States, Million) b. (European Union, Million)
Undocumented Detected Undocumented Detected
1.2 Denied Entry Denied Entry
2.5
Returned Returned
1.0 Asylum Seekers
2.0
0.8
1.5
0.6
1.0
0.4
0.2 0.5
0.0 0.0
08
09
10
11
12
13
14
15
16
17
18
19
08
09
10
11
12
13
14
15
16
17
18
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Source: Eurostat and the US Department of Homeland Security. See Migration and Development Brief 28 for methodological
details (World Bank 2017).
Note: Denied entry = third-country nationals refused entry in the European Union and Schengen external border; undocumented
detected = illegally present third-country nationals within the European Union; returned = both enforced and nonenforced. The
EU-28 countries included the United Kingdom. Data in calendar years.
1.3 Remittance Flows Are Expected to Despite the projected decline, the impor-
Decline in 2020 and 2021 tance of remittances as a source of external
financing for LMICs is expected to increase
Based on the trajectory of economic activities further in 2020.11 Remittance flows to LMICs
in many major migrant-hosting countries, touched a record high of $548 billion in 2019,
especially the United States, European coun- larger than foreign direct investment (FDI)
tries, and the GCC countries, remittance flows flows ($534 billion) and overseas development
to low- and middle-income countries (LMICs) assistance (ODA, around $166 billion) (figure
are expected to register a decline of 7.2 1.6).12 The gap between remittances and FDI is
percent to $508 billion in 2020, followed by a expected to widen further as the decline in FDI
further decline of 7.5 percent to $470 billion in is expected to be sharper (box 1.2).
2021 (figure 1.6 and table 1.1). The projected
decline in remittances will be the steepest According to these projections, in 2020, in
in recent history, certainly steeper than the current US dollar terms, the top remittance
decline (less than 5 percent) recorded during recipient countries are expected to be India,
the global recession of 2009. This outlook for China, Mexico, the Philippines, and Egypt,
remittances indicates a more gradual but more unchanged from 2019 (figure 1.7). When
prolonged decline (continuing into 2021) than remittances are calculated as a share of GDP,
our April outlook (see World Bank 2020c), the top five recipients in 2020 are smaller econ-
which forecasted a sharper decline in 2020 omies: Tonga, Haiti, Lebanon, South Sudan,
followed by a modest recovery in 2021.10 and Tajikistan.
7Phase II: COVID-19 Crisis Through a Migration Lens
Figure 1.6 Remittance Flows to Low- and Middle-Income Countries Projected to
Remain Higher than FDI Flows
($ billion)
900
FDI
700
500 Remittances
300
100 ODA
Portfolio debt and equity flows
-100
20 9e
20 f
f
19 0
19 1
19 2
19 3
19 4
19 5
19 6
19 7
19 8
20 9
20 0
20 1
20 2
20 3
20 4
20 5
20 6
20 7
20 8
20 9
20 0
20 1
20 2
20 3
20 4
20 5
20 6
20 7
20 18
20
21
9
9
9
9
9
9
9
9
9
9
0
0
0
0
0
0
0
0
0
0
1
1
1
1
1
1
1
1
1
19
Sources: World Bank–KNOMAD staff estimates; World Development Indicators; International Monetary Fund (IMF) Balance of
Payments Statistics. See appendix in the Migration and Development Brief 32 for forecast methods (World Bank 2020c).
Note: FDI = foreign direct investment; ODA = official development assistance.
Box 1.2 Foreign Direct Investment to Decline in 2020
Foreign direct investment (FDI) flows to low- Lower corporate profits due to the pandemic
and middle-income countries are projected are likely to have reduced reinvested earnings,
to decrease by nearly 32 percent in 2020 in which account for a significant portion of FDI.
the wake of the global pandemic, from their In addition, the prospect of a severe global
2019 volume of $534 billion. Available data recession is likely to prompt multinational com-
show a decline of 37 percent year-on-year in panies to reassess new projects in developing
the second quarter of 2020 and 32 percent countries. Indeed, both new greenfield invest-
in the first half of 2020. Nearly all developing ment project announcements and cross-border
countries, notably China (-17 percent), India mergers and acquisitions declined by more
(-36 percent), Indonesia (-39 percent), and than 50 percent in the first months of 2020
Russia (-86 percent) experienced a sharp drop from a year before. FDI flows to developing
in FDI inflows during the first half of 2020. countries have steadily declined since 2013 (with
The global lockdown measures affected the the exception of 2018), and they could remain
implementation of existing investment projects. below pre-pandemic levels through 2021.
8Migration and Development Brief 33
Table 1.1 Estimates and Projections of Remittance Flows to Low- and Middle-Income Regions
Region 2009 2016 2017 2018 2019e 2020f 2021f
($ billion)
Low- and Middle-Income countries 305 440 480 525 548 508 470
East Asia and Pacific 80 128 134 143 147 131 126
Europe and Central Asia 35 40 48 55 57 48 44
Latin America and Caribbean 55 73 81 89 96 96 88
Middle East and North Africa 31 51 57 58 60 55 50
South Asia 75 111 117 132 140 135 120
Sub-Saharan Africa 28 38 42 48 48 44 41
World 435 596 642 695 717 666 619
Memo items
LMICs, FY 2019 income classification* 306 446 487 532 556 515 476
IDA eligible countries** 64 103 111 123 128 124 112
Region 2009 2016 2017 2018 2019e 2020f 2021f
Growth rate, percent
Low- and Middle-Income countries -4.9 -1.6 9.1 9.4 4.3 -7.2 -7.5
East Asia and Pacific -4.8 -0.5 5.1 6.8 2.2 -10.5 -4.2
Europe and Central Asia -12.8 -1.6 21.7 13.5 4.0 -16.1 -7.5
Latin America and Caribbean -12.3 7.4 11.1 9.9 8.2 -0.2 -8.1
Middle East and North Africa -6.0 -1.2 12.6 1.7 3.0 -8.5 -7.7
South Asia 4.5 -5.9 6.0 12.3 6.1 -3.6 -10.9
Sub-Saharan Africa -0.1 -8.5 9.5 13.9 0.5 -8.8 -5.8
World -5.1 -1.1 7.7 8.2 3.2 -7.0 -7.1
Sources: World Bank¬–KNOMAD staff estimates. See appendix in Migration and Development Brief 32 for forecast methods
(World Bank 2020c).
Note: e = estimate; f = forecast; IDA = International Development Association.
*This group includes countries classified as “developing countries” during FY 2019. It includes Romania and Mauritius.
**IDA-only countries are expected to see a decline in remittance inflows in 2020 and 2021, to $68 billion and $63 billion
respectively, from $71 billion in 2019.
9Phase II: COVID-19 Crisis Through a Migration Lens
Figure 1.7 Top Remittance Recipients, by Total (panel a) and by Share of GDP (panel
b), 2020
a. Top recipients by total amount ($ billion) b. Top recipients by share of GDP (%)
76 40
38
36 35
60
26 25
41 23 22 21 21
33
24 24
21 20
16 14
Le as
n
n
Sa al
o
a
a
o
Ar nes
ng ria
m
e
a
Le aiti
n
N n
ic
on r
Vi sh
Pa p.
H do
in
di
ng
a
a
in
da
ut no
ic
th
bl
ep
na
Re
r
de
st
yz ist
Ba ge
du
Ch
ex
H
ra
In
so
a
i
pu
To
Su
ba
yp lipp
ki
et
N
lv
rg j i k
la
Uk
i
ab
M
Re
Ky T a
h
Eg Phi
El
So
t,
Sources: World Bank staff estimates; World Development Indicators; IMF Balance of Payments Statistics.
Note: The top recipient countries include several high-income countries such as France and Germany (not shown in the figure), but
as a share of GDP, remittance flows to these countries are negligible. GDP = gross domestic product.
The foremost factors driving the decline in Russia seem to have a direct correlation with
remittances in 2020 and 2021 are weak cyclical movements in oil price. In the case of
economic growth and uncertainties around Saudi Arabia, the correlation is less visible at a
jobs in several high-income migrant-host- quarterly frequency, but the long-term effects
ing countries such as the United States and are present; a continued weakness in oil price
European countries. Uncertainty around has affected economic activities and hence the
work in high-income countries will continue to employment of foreign workers, and outward
dampen employment and earning prospects remittances have been falling since 2015. A
for migrant workers and therefore remittance more structural factor in the case of Saudi
flows to LMICs. Arabia and other GCC countries is a shift in
their employment policies to favor the employ-
A second factor affecting remittance flows ment of native-born workers. In the medium
is the weak oil price. The economies of GCC term, outward remittance flows from the GCC
countries and Russia—major sources of countries are unlikely to increase significantly.
remittances to South Asia, Southeast Asia, and
Central Asia—are highly dependent on the oil
price (figure 1.8). Outward remittances from
10Migration and Development Brief 33
Figure 1.8 Lower Oil Prices Have Affected Outward Remittance Flows from Russia
(panel a) and Saudi Arabia (panel b), Q1 2007 through Q2 2020
a. Remittances from Russia ($ million) b. Remittances from Saudi Arabia ($ million)
($ million) ($/bbl) ($ million) ($/bbl)
12,000 140 12,000 140
10,000 120 120
10,000
100 100
8,000 8,000
80 80
6,000 6,000
60 60
4,000 4,000
40 40
Outward remittances, Russia Outward remittances, Saudi Arabia
2,000 20 2,000 20
Brent crude ($/bbl) (Right Axis) Brent crude ($/bbl) (Right Axis)
0 0 0 0
1
13 1
14 1
15 1
16 1
17 1
18 1
19 1
20 1
08 1
09 1
10 1
11 1
12 1
13 1
14 1
15 1
16 1
17 1
18 1
19 1
20 1
1
08 1
09 1
10 1
11 1
12 1
-Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
-Q
20 - Q
20 - Q
20 - Q
20 - Q
20 - Q
07
07
20
20
Source: Haver and World Bank-KNOMAD.
Note: $/bbl = dollar per barrel; Q1 = first quarter.
A third factor affecting the flow of remittances other currencies against the US dollar will also
is the exchange rate (vis-à-vis the US dollar) reduce remittances originating from Europe
of source currencies for remittances. The and other high-income, migrant-hosting
weakening of the ruble against the US dollar, countries. (Note that South-South migration is
by over 26 percent since the beginning of 2020, larger than South-North migration, and intra-
has reduced remittances from Russia in US regional migration accounts for over two-thirds
dollar terms. Remittances to Central Asia have of international migration in Sub-Saharan
therefore declined significantly. Africa.) Remittance flows to Latin America and
the Caribbean are expected to decline by 0.2
Among global regions, Europe and Central percent in 2020. A more detailed description
Asia is expected to register the sharpest of regional trends in migration and remittance
decline, by 16 percent in 2020 (figure 1.9 and flows is provided in section 2 of this Brief.
table 1.1). The weakening of the euro and
11Phase II: COVID-19 Crisis Through a Migration Lens
Figure 1.9 Projected Growth of Remittances by Region, 2020
Regional remittance growth (%)
-0.2
-4
-8
-9
-11
-16
Latin South Asia Middle East Sub-Saharan East Asia and Europe and
America and and North Africa Pacific Central Asia
Caribbean Africa
Source: World Bank-KNOMAD staff estimates.
The outlook for remittance flows presented few months after the COVID-19 outbreak. The
in this Brief indicates that by the end of 2021, foremost reason for a recovery in remittance
remittance flows to LMICs would decline by flows starting in June was a catch-up after
over 14 percent, only slightly lower than the the hiatus of April and May. Even as migrants
15 percent decline projected in April 2020. (especially lower-skilled or irregular migrants)
As noted earlier, the new outlook indicates suffered a loss of income or employment,
a trajectory of more gradual but prolonged their families back home needed support.
decline continuing into 2021. Meanwhile, the Anecdotally, some migrants drew on their sav-
intra-year variations in remittance flows in ings to send money home, but that cannot be
2020 merit further analysis. sustained for long. A second reason is likely to
be a shift in flows from informal (unrecorded)
1.3.1 Intra-year Patterns in 2020 hand-carrying to formal (recorded) remittance
channels. This is especially true in the case of
For most countries where monthly or quar- higher-skilled migrant workers with access to
terly data on remittances are available, data digital remittance services. A third reason is
reveal a common intra-year pattern in 2020: that some migrants were able to access cash
a sharp decline in April and May (the initial transfers offered by some host country govern-
crisis months marked by abrupt, pervasive, ments.13 However, while documented migrants
and chaotic lockdowns, travel bans, and would have access to the stimulus support,
disruption to remittance services) followed by undocumented migrants would not.
a slow but partial recovery (figure 1.10). Most
countries, notably those in Europe and Central
Asia, registered steep declines in remittances
in Q2. Remittances to Latin America and the
Caribbean also dropped abruptly in the first
12Migration and Development Brief 33
Figure 1.10 High-Frequency Data Indicate Uneven Changes in Remittance Flows
during Q2 and Q3, 2020
Year-on-year change in remittances (%)
Q3* Bulgaria
Bolivia
Q2 Uganda
Nigeria
Kazakhstan
Belarus
Mozambique
Turkey
Bosnia and Herzegovina
Peru
Albania
Serbia, Rep. of
Armenia
Uzbekistan, Rep. of
Malaysia
Colombia
Indonesia
Georgia
Thailand
South Africa
Russian Federation
Moldova
Ecuador
El Salvador
Sri Lanka
Ukraine
Montenegro
Jordan
Egypt
Morocco
Kyrgyz Rep
Philippines
Honduras
Costa Rica
Guatemala
India
Mongolia
Kenya
Bangladesh
Nepal
Dominican Rep.
Mexico
Pakistan
Azerbaijan
Samoa
Brazil
Kosovo
Jamaica
N. Macedonia
-90 -80 -70 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50
Source: Haver and World Bank–KNOMAD.
*Data for Bolivia, Bulgaria, Mexico, Morocco, the Philippines, and Ukraine are for July and August only.
13Phase II: COVID-19 Crisis Through a Migration Lens
Figure 1.11 Remittance Flows to Mexico Rose in Q2 in a Response to a Depreciation
of the Peso (panel a), but a Sharp Drop in Hispanics’ Employment Rate in the United
States Is Likely to Dampen These Flows (panel b)
a. Remittances and depreciation of peso b. Remittances and US employment
(Mexican
($ million) peso/US$) ($ million) (Million)
4,500 25 4,500 40
Mexico Remittances
4,000 MXP USD rate 23 4,000 US Employment
(right scale) (Hispanics, right scale) 35
3,500 21 3,500
30
3,000 19 3,000
25
2,500 17 2,500
2,000 15 2,000 20
Se l-18
Ja -18
M -19
Ju 19
Se 19
Ja -19
M -20
M r-20
Ju 20
Se l-20
20
a 8
ay 8
Ju -18
8
ov 8
Ja 18
ay 9
Ju -19
9
Ja -19
a 0
ay 0
Ju -20
0
ov 9
N -18
N -19
M -19
a 9
M n-1
Se l-1
N p-1
M r-1
M n-2
M r-2
l -2
M r-1
Se l-1
N p-1
M n-1
p-
-
-
-
-
ay
ay
ar
ov
ov
n
p
n
p
l
Ju
a
Ja
Source: Haver and World Bank–KNOMAD; US Bureau of Labor Statistics.
Note: MXP = Mexican peso.
Three large recipients of remittances—Mexico situation in the United States—employment of
($39 billion in 2019), Pakistan ($22 billion), Hispanics declined by 5 million in April—is likely
and Bangladesh (18 billion)—stand out as to dampen remittance flows in the near future
exceptions to the general pattern mentioned (figure 1.11, panel b).
above: these countries escaped a decline in
remittance inflows in Q2 and seem to register In the case of Pakistan, there was a sharp
increases in Q3. In the case of Mexico, a sharp increase in remittances in July, mostly from the
rise in remittance flows observed in Q1 2020 GCC countries, particularly from Saudi Arabia
may have been triggered by a 25 percent (figure 1.12). Arguably this spike in remittances
depreciation of the peso against the US dollar could be at least partially attributed to the “Haj
(figure 1.11, panel a). For Mexican migrants in effect”—Pakistani migrants remitting home the
the United States, a weaker peso provided a money saved for pilgrimage to Mecca due to
strong incentive to remit more to take advan- a sharp reduction in the number of Haj visas
tage of lower prices (in US dollar terms) of to contain the pandemic. In 2019, more than
goods and assets in Mexico.14 Over 90 percent 1.8 million foreigners made the Haj, whereas
of Mexican migrants are in the United States this year only local residents (formally 1,000)
and many of them who have resident status were permitted. In addition, the government’s
or a legal work permit may have had access efforts to attract remittances and migrants’
to social protection measures offered by the savings through tax incentives may be working,
United States. However, a weak employment although these are yet to be evaluated.15
14Migration and Development Brief 33
The “Haj effect” seems to have affected than one-quarter of the country’s landmass,
remittance flows to Bangladesh as well in July affecting nearly 1 million homes and 4.7 million
2020. But perhaps a more important reason people. Other plausible explanations include
for a whopping 53.5 percent year-on-year pent-up remittances after the shutdown in Q2
increase in remittance flows in Q3 was the and a shift in flows from informal to formal
damage from the floods that inundated more channels.
Figure 1.12 Remittances from GCC Countries to Pakistan Rose in Q2 and Q3 of 2020
($ million)
1,800 GCC
1,600 Non-GCC
1,400
1,200
1,000
800
600
400
200
0
2018 - 2018 - 2018 - 2019 - 2019 - 2020 - 2020 -
Jan Jun Nov Apr Sep Feb Jul
Source: Haver and World Bank-KNOMAD.
Note: GCC = Gulf Cooperation Council.
Figure 1.13 Remittances from the United States to Pakistan Fell in Q2 and Q3 of 2020
($ million)
500 U.S. U.K. EU
400
300
200
100
0
2018 - 2018 - 2018 - 2019 - 2019 - 2020 - 2020 -
Jan Jun Nov Apr Sep Feb Jul
Source: Haver and World Bank–KNOMAD.
15Phase II: COVID-19 Crisis Through a Migration Lens
A closer look at data on remittances to 1.4 Recent Progress toward Migration-
Pakistan, disaggregated by source country, Related Sustainable Development Goals
reveals that even remittances from the GCC
countries—in particular, Saudi Arabia—have 1.4.1 Trends in the Costs of Remittances
been either flat or declining for the past three (SDG Indicator 10.c.1)
years, perhaps reflecting the indigenization
policy mentioned earlier. A second interesting According to the World Bank’s Remittance
trend is a decoupling of flows from the United Prices Worldwide Database, the average cost
States and the United Kingdom this year and of sending $200 to LMICs was 6.8 percent
a sharp increase in flows from Europe starting in Q3 2020. This cost has remained below
in Q2, perhaps reflecting the relocation of 7 percent since Q1 2019 (figure 1.14), yet
money transfer operators to outside the United remains more than double the Sustainable
Kingdom after Brexit (figure 1.13). More Development Goal (SDG) target of 3 percent
recently, remittance inflows from the United by 2030 (SDG target 10.c). The World Bank
States declined sharply in Q3, reflecting the initiated a weekly survey of remittance costs in
weak employment situation in the country. several vital corridors to assess the effects of
the COVID-19 crisis on the remittances sector.
Findings show mixed results in terms of costs.16
Figure 1.14 Global Average Cost of Sending $200, 2011–20
(Percent)
10
9
8
7
6
5
4
The SDG target rate of 3%
3
2
1
0
3 1
1 1
3 2
1 2
2 3
3 3
4 3
1 3
2 4
3 4
4 4
1 4
1 5
3 6
2 5
3 5
4 5
2 6
4 6
1 6
2 7
3 7
4 7
1 7
2 8
3 8
4 8
1 8
2 9
3 9
4 9
1 9
2 0
3 0
20
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 2
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 1
Q 20 2
20
1
Q
Source: Remittance Prices Worldwide database, World Bank.
16Migration and Development Brief 33
Figure 1.15 How Much Does It Cost to Send $200? A Comparison of Global Regions in
2019 and 2020
(Percent)
10 Q3 2019 Q2 2020 Q3 2020
9.0
8.7
8.5
8 7.5
7.2 7.2
6.8 6.8 7.0 7.1
6.7 6.5 6.8
6.6
6.3
5.9 5.8 5.8
6
5.0 4.9 5.0
4
2
0
Global SAR LAC ECA EAP MENA SSA
Average
Source: Remittance Prices Worldwide database, World Bank.
Note: EAP = East Asia and Pacific; ECA = Europe and Central Asia; LAC = Latin America and the Caribbean; MENA = Middle East
and North Africa; SAR = South Asia; SSA = Sub-Saharan Africa.
Money transfer companies have experienced 1.4.2 Developments in De-Risking Practices
a significant increase in their transactions
through formal channels in the wake of the Before COVID-19, several countries had seen
global pandemic. MoneyGram’s digital a reduction in the number of correspondent
transactions surged 106 percent in 2020 Q2 banks for financial services, including remit-
compared to the previous year, while Western tances. In several instance, this reduction was
Union’s rose 50 percent for the same period. lined to “de-risking,” with banks closing bank
accounts of money transfer operators under
The cost was the lowest in South Asia, at the justification of avoiding risks of money
around 5 percent, while Sub-Saharan Africa laundering or terrorist financing. From 2011 to
continued to have the highest average cost, at 2018, the number of correspondent banking
about 8.5 percent (figure 1.15). Remittance relationships around the world declined by
costs across many African corridors and small 20 percent. Some countries, such as Somalia
islands in the Pacific remain above 10 percent. and countries in the Caribbean and Pacific
Islands, have few correspondent banking
Banks continue to be the costliest channel for relationships.17
sending remittances, with an average cost of
10.9 percent in 2020 Q3, while post offices Financial institutions continue to perceive
are recorded at 8.6 percent, money transfer remittances as more vulnerable to risks of
operators at 5.8 percent, and mobile operators noncompliance or weak compliance with
at 2.8 percent. the anti-money laundering/countering the
financing of terrorism (AML/CFT) regulations
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