ILO (2020) warns there will be a significant loss in labor income in the range of USD 860 billion to USD 3.4 trillion. World Bank (2020) predicts that economic growth is expected to fall to a range between 1.5 % and 2.8 % in the fiscal year 2020 because of a reduction in the inflow of remittances. Many developing countries have been dependent on it as it contributes around 25 % to the national GDP. Many migrant workers will return home and chances of jobless will be increased. What will be its consequences on the national and international economy? What will be the alternates of it?
https://kathmandupost.com/columns/2020/05/26/the-way-forward-in-south-asia
https://www.weforum.org/agenda/2020/04/how-coronavirus-could-hit-the-billions-migrant-workers-send-home/
https://www.who.int/docs/default-source/nepal-documents/novel-coronavirus/covid-19-nepal-preparedness-and-response-plan-(nprp)-draft-april-9.pdf?sfvrsn=808a970a_2
Hi Deepak, there will be a volatility of the remittances, due to their volume and stability and their dynamics of course will influence on balance of payment within many developing countries. For how long it will be lasting and which countries will be most affected we will see in the coming period. A best alternative for it would be a foreign & international financial aid for some of the developing countries that are most affected.
To encourage discussion of the economic impact generated by the SARS-CoV-2 virus, and the control measures taken at the international level, we invite you to read the following article.
Economy or Health, Constant Dilemma in Times of Pandemic: The Case of Coronavirus Disease 2019 (COVID-19).
Journal of Pure and Applied Microbiology, 2020. DOI: 10.22207/JPAM.14.SPL1.07
Article Economy or Health, Constant Dilemma in Times of Pandemic: Th...
Dear Goran Miladinov, Thank You for your valuable insight. I fully agree with you. However, there is still a question that is it possible to get sufficient foreign aid at this time?? Actually it is hard to recover created by remittance losses because it was not only related to household economy but also it was a big source for foreign currency.
Just before days, our finance minister put the Budget post-COVID-19, and he proposed 25 % of the total budget will be from foreign aid or loan.
https://kathmandupost.com/national/2020/05/29/despite-massive-blow-to-economy-from-covid-19-government-aims-for-7-percent-growth
Thank you @ Jorge Andrés Sánchez-Duque for the useful article. Of course, it is related to this discussion.
Remittances during the COVID-19 Pandemic
https://journals.tplondon.com/rem/article/view/950/746
Dear Deepak Chaudhary, thanks for your discussion. So, to address to your further question: If it is not possible to get a sufficient foreign aid at this time than the second option would be an international loan(s). In addition, your government and many others should consider cutting of some budget's items or to be made a conversion of assets within the planned budget for the ongoing fiscal year.
remittance dropped by nearly 25 per cent in April in many countries of the world. in Bangladesh it fell by 16 % in april compared to march 2020.
Thank you Bashrat Hossain for the information sharing. Same in Nepal, around 14 % is dropped.
Dear Basharat, Would you share, how Bangladesh is recovering such losses ?
May be useful to you;
https://www.businesswire.com/news/home/20200417005559/en/Global-Remittance-Market-COVID-19-Insights-Forecast-2020-2024
Dear Md. Shakhaowat Hossin , Thank you for sharing. It is really useful.
https://kathmandupost.com/money/2020/08/24/remittance-defies-projections-of-a-massive-drop
It is evident that COVID-19 has established significant changes in employment and income. But the central issue is that the liberal model has demonstrated its exhaustion for situations in which the collectivity needs to gain importance. In this respect, we are living two great processes: a) the individualistic logic is the same that does not order a solidarity behavior of controlling the flow of people, as a way to contain the spread of the disease. That is, the individualistic behavioral pattern deteriorates our capacity for survival and collective well-being; b) it is imperative to rescue from the State its capacity to consolidate and maintain the offer of public social equipment, the quality of its services, through social policies that produce control, vaccination and research, as a resolution to the physical and psychological illness of national societies. This crucial point reveals that the National States must establish income policies, local development strategies, economic practices in solidarity that guarantee food security, medical-hospital care, education and social welfare in all its dimensions. I believe that this should be the nod of supra-state structures, such as the World Bank, ILO, WHO, IDB, to the national economies. Consolidating a world truce of speculation, reduction of interest rates, debt forgiveness of the most vulnerable economies. Perhaps this is the time for a project of humanity and not a project of economic value. In fact, this is an excellent research agenda. What economic policies, especially in the area of food security and income, have been established by the National States in front of COVID-19 ?