On the 9th of February 2021, Global Research Forum on Diaspora Transnationalism [GRFDT], Cross-Regional Center for Refugees and Migrants [CCRM], Migrant Forum in Asia [MFA], and the Civil Society Action Committee [CSAC] jointly organized a virtual panel discussion on the GCM Objective 20: Promote faster, safer and cheaper transfer of remittances and foster financial inclusion of migrants. Mr. Jeevan Baniya, Assistant Director of Social Science Baha, Ms. Sonia Plaza, Senior Economist, World Bank, Ms. Nathania Aritao, Entrepreneur, Artist, and Social Justice Advocate, Dr. Tasneem Siddiqui, Professor of Political Science, University of Dhaka, and Mr. Alvin Ang, Professor at the Department of Economics, Ateneo de Manila University, were the panelists who led the discussion on various aspects of remittance and development. The webinar was moderated by Mr. William Gois, Regional Coordinator, Migrant Forum in Asia. Mr. Gois began by asking the panelists if remittances are all about money and if they are always a one-way flow?
Effects of COVID-19 on Remittance Flows
Mr. Jeevan Baniya began by highlighting the statistics related to remittances, stating that approximately 80% of the world depend on remittances for their livelihood, while in Nepal remittances contribute about 20-30% of the Gross Domestic Product. COVID-19 has resulted in the reduction of migration flows as people are forced to pay a higher amount of recruitment fees and relative fees, which has an adverse impact on migrants. Some migrants are taking irregular routes due to COVID-19 restrictions, thus, exposing them to risks of smuggling and trafficking. The restrictions on mobility have also left migrants in financial uncertainty.
“Some are indebted and trapped in the cycle of debt, especially those who had to return soon after migrating due to loss of jobs and income. They are not in the condition to repay their loan, so they have to undergo some type of forced migration”: Mr. Jeevan Baniya
Mr. Baniya acknowledged the efforts of the Nepali government in coming up with policies and incentives for returning migrant workers to facilitate their integration into the labour market in Nepal. The matching of the skills of return migrants with the job market in the country is particularly important for the economic development of any country, including Nepal. He concluded his presentation by stating that with the recent change in governmental setup, initiatives may be derailed and there is the risk of funds being redistributed from the planned initiatives.
Need for Migrant Financial Literacy
Ms. Nathania Aritao’s presentation focused on financial literacy and inclusion. The purpose of TAYO International is to support migrants to break cycles of poverty, debt, and financial vulnerability. There are four foundations of financial literacy that the organization focuses on-accessibility, relatability, sustainability, and scalability. The organization works primarily with Filipino migrants in the United Kingdom to teach them on finding ways for mobilizing resources and save money for retirement or when they go back to their home countries, without going broke.
“(We are) making sure that they can go home but not go home broke; a sad reality is that a lot of migrants end up retiring in poverty or not being able to retire at all”: Ms. Nathania Aritao
Ms. Aritao concluded her presentation by remarking that it is important to build confidence in migrant workers, and ensure their accessibility to information and knowledge as those are very empowering strategies in helping migrants.
Importance of Remittances
Ms. Sonia Plaza began her presentation by noting that remittances are the key for a country in terms of foreign exchange, maintainingthe balance of payment, ensuring sustainability, and getting good credit ratings for a country. Ms. Plaza further emphasized that remittances reduce poverty and help families of migrants have access to important services such as health and education.
“Remittances help both sending and receiving countries, families back home send help to migrants, (thereby) reverse remittance system exists”: Ms. Sonia Plaza
The lowest skilled migrants transfer a lot of knowledge in both the host and sending states. There is, however, very little progress on GCM 20. Of all the objectives of GCM, Objective 20 is the most tangible but no progress has been done, observed Ms. Plaza. In her concluding remarks, Ms. Sonia Plaza emphasized the fact that the World Bank not only provides loans to national governments but also facilitates a lot of development programs.
Increase in Remittance During the Pandemic
Dr. Tasneem Siddiqui discussed how migrant remittances were expected to decline in Bangladesh, which was the case in the first few months of COVID-19, but then steadily increased starting in June. In Bangladesh, 70% of women migrants continued to remit during the pandemic while only 30% of males remitted.
Dr. Siddiqui stated that approximately US$5000 is paid by workers of Bangladesh for purchasing a visa to go to the United Arab Emirates. Historically this has been facilitated through the informal channel, hence remittances flowed back through the informal channel to pay back the loans. However, COVID-19 has forced remittances and visa purchases to be facilitated through a formal channel. Demand for informal channels reduced due to COVID restrictions leading to increased remittance through formal channels.
“The remittance system was an underground market, but it all came into light due to COVID-19. This has led to the visibility of remittance flow, making it seem like there is an increase in the remittance flows”: Dr. Tasneem Siddiqui
Dr. Siddiqui concluded the presentation by stating that development comes in different ways as a result of the remittance system, for instance, when migrants send money to educate their children; that is development.
Change in Remittance Patterns
Mr. Alvin Ang spoke about the Filipino migration trends, pointing out that the attraction for migration in the Philippines is the wage gap. Since the 1970s, the Filipino government had a labour export policy that saw Filipino workers move to places like Dubai for labour. Mr. Ang emphasized that this labour export policy has since been revoked on paper, but the practice has continued. The magnitude of the Filipino workers in the diaspora has contributed to the Philippines ranking 3rd as the largest remittance-receiving country. Remittances are crucial for the economy and development of the Philippines if managed properly.
“There is need to create a conducive environment for the sustainability of remittances in the development of the Philippines”: Mr. Alvin Ang
Mr. Ang wrapped up his presentation by acknowledging that reverse remittance happened during the 2009 Global Financial Crisis and it is currently happening with families sending money to relatives in Dubai for repatriation or to sustain them during a crisis.
The panel discussion ended with the recognition that remittances are not a one-way flow. The pandemic has led to an increase in what is termed “reverse remittance”, with migrants receiving financial assistance from back home to assist in sustaining their livelihood during the pandemic. The panelists also concluded that contrary to the early projections which forecasted a negative flow of remittance due to COVID-19, in most countries that trend only lasted for a few months before the remittance flows stabilized and then eventually increased.
Inomusa Ndlovu – Student of M.A in Political Science at Lucknow University, India. A feminist and creative writer, with a focus on activism. Her academic and professional interests are in Migration and International Relations. She can be reached on Twitter @InomusaCN