Avril’s family members have all migrated to the United States. “Sending money back home to family to help with mundane living expenses like paying utility bills and making ends meet is now a thing of the past for me but my nephew is now doing so to meet the needs of his overseas relatives,” she explained.
Her devoted nephew has been able to wire transfer essential money to members of his family tree in Georgetown, Guyana despite living in a state where the novel coronavirus (COVID-19) has racked up 513 deaths per million with more than 70 percent of the casualties reported in New York City.
The U.S. surpassed one million in confirmed COVID-19 cases a few days ago, accounting for about a third of all cases worldwide with New York registering the highest reported rate of confirmed cases at a magnitude of 35 times over the state with the lowest incidents of the disease.
An example of how New York’s infection rate was climbing untamed was provided by the Centers for Disease Control and Prevention (CDC) on April 7th. Minnesota, the CDC noted, only recorded 20.6 cases per 100,000 while New York had skyrocket to 915.3 per 100,000.
So, by the end of April, New York State with 304,372 positive cases of the disease, 18,312 confirmed COVID-19 deaths and 11,598 patients in hospitals but with a slowed infection rate is under ‘shelter in place’ orders with businesses closed and the entire workforce, with a few exceptions sent packing.
A March 20 order by the state’s Governor, Andrew Cuomo, which included restriction of movement to essential businesses and with the requirement to maintain social distancing are similar to contagion control measures worldwide including bans on international travel.
However, shutting the doors of businesses and the abrupt halt to other economic activity in order to contain infection is a bitter pill to swallow. Estimates by the International Monetary Fund (IMF) indicate advanced economies will contract by at least 6.1 percent and emerging markets/ developing economies by 1.0 to 2.2 percent by the end of the year.
The World Bank also projects real economic growth to fall by -4.6 percent in Latin American and the Caribbean region, -0.5 percent I East Asia, 4.4 percent in Europe and Central Asia, -1.8 percent in the Middle East and North Africa, -2.8 percent in South Asia and -5.1 percent in Sub-Saharan Africa.
The World Banks’ review also noted the economic crisis induced by COVID-19 disproportionately slammed output in retail/wholesale trade, tourism, transport, agriculture and some professional services.
But the Organization for Economic Co-operation and Development (OECD) Secretary General, Angel Gurria, see a bleaker future for the more developed economies.
In a recent G20 Summit statement he contended that the impact of business closures could result in reductions of 15 percent or more in the level of output throughout the advanced and major emerging-market economies while the median economies may see output fall by as much as 25 percent.
Valerie Taylor is aware that the COVID-19 pandemic has led to dire economic circumstances as she shelters in her Brooklyn home and is contented with a reduced responsibility to only transfer money periodically to pay taxes and maintenance expenses for her house in Jamaica.
Her, heartthrob, her mother whom shared a portion of her income over the years passed away in 2017 during a vacation visit to her homeland. She said she now has “fewer reasons to remit money home.”
But she like Avril, whose years of sending money back home has ended or is significantly reduced has no idea how ominous the circumstances awaiting Avril’s nephew as he grapples with his responsibilities.
And the World Bank has more news he may not want to hear.
Approaching the end of last month, World Bank projected a sharp decline of some 20 percent in global remittances due to loss of income attributed to business closures associated with the COVID-19 pandemic.
The “fall which would be the sharpest decline in recent history, is largely due to a fall in wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in the host country”, the bank reported.
Overall, remittances to low and middle income countries are projected to fall by 19.7 percent to $445 billion, representing a denial of a critical lifeline to dependent households in those countries.
Remittance flows to Latin America and the Caribbean is expected to fall by 19.3 percent but most noticeable among the Bank’s regional group of countries is a precipitous fall of 27.75 percent for the Europe and Central Asia region with Sub-Saharan Africa and South Asia expecting a 23.1 and 22.1 percentage downward slip respectively.
International money transfers from migrants in the Middle East and North Africa (MANA) seem to mirror the anticipated Caribbean and Latin American (LAC) experience with a fall by 19.6 percent but in 2019 remittance flows between the two groups showed contrasting potential when the LAC region grew by 7.4 percent as compared to 2.6 percent by the MANA region.
Although money transfers from immigrants like Avril’s cousin count a lot, the lead economist Dilip Ratha of KNOMAD, a global knowledge hub on migration associated with the World Bank sees individual transactions as a mere tip of an iceberg.
He opined in a published paper that “on a larger scale analysis across countries worldwide shows significant the poverty reduction effects of remittances: A ten percent increase in per capita official remittances may lead to a 3.5 percent decline in the share of poor people.”
Michael Clemens, director of migration, displacement and humanitarian policy at the Center for Global Development in Washington, DC elaborated on the link between money transfers and poverty in an interview on the BBC’s Business Daily last Friday.
“Remittances are crucial to poverty reduction – a study from the World Bank found a 10 percent rise in remittances is associated with a 3-point decline in extreme poverty across 71 developing countries – that is a massive, massive effect on poverty,” he told the BBC radio magazine audience.
Clemens expects a fallback into poverty for dependent populations of some recipient countries as a result of reduced cash flows caused by the COVID-19 pandemic. “The countries with more than 10 (around) percent of their populations abroad … are going to just see massive economic shocks ripple across their whole economies and they are going to last for a very long time.”
A Caribbean Today (CT), review of population statistics from the Migration Policy Institute (MPI) and the World Bank suggest a number of Caribbean countries are awaiting a gloomy fate as predicted by Clemens.
MPI, formed in 2001 and describes itself as a non-partisan think-tank notes that the top destination for Caribbean emigrants is the United States where some 4.4 million souls account for 10 percent of that nation’s 44.5 million immigrants.
Canada is in the second spot with a head count of 405,000. And outside of the region Spain (294,000) and the U.K. (232,000) take the hindmost positions.
CT , by employing immigrant data provided by MPI as a percentage of the population of select Caribbean country of origins was able to determine Jamaica, the athletic sprint kings of the world, is beyond tippy-toeing with danger at a 24.89 percent of their population outside of the country.
The amount of individual Caribbean country emigrant totals is computed on the basis of the sum of nationals abroad in the United Kingdom, United States and Canada.
But Guyana with no world renowned athletes, clocked a whopping 53.27 percent of their population abroad, Antigua & Barbuda (38.42) Barbados (32.44) Trinidad & Tobago (25.25) St. Lucia (19.79) Bahamas (10.37) Dominica (58.63).
If Clemens’ prognostication bears fruit, the Caribbean area may be in for tough times ahead.