The economic crisis induced by COVID-19 could be long, deep, and pervasive when viewed through a migration lens, the World Bank said in a report: “COVID-19 Crisis Through a Migration Lens.”

In the report the Bank said lockdowns, travel bans, and social distancing have brought global economic activities to a near standstill. According to the Bank host countries face additional challenges in many sectors, such as health and agriculture, that depend on the availability of migrant workers. Migrants face the risk of contagion and also the possible loss of employment, wages, and health insurance coverage. This Migration and Development Brief provides a prognosis of how these events might affect global trends in international economic migration and remittances in 2020 and 2021. Considering that migrants tend to be concentrated in urban economic centers (cities), and are vulnerable to infection by the coronavirus, there is a need to include migrants in efforts to fight the coronavirus.

Remittances
The Bank said migrant remittances provide an economic lifeline to poor households in many countries; a reduction in remittance flows could increase poverty and reduce households’ access to much-needed health services. The crisis could exacerbate xenophobic, discriminatory treatment of migrants, which calls for greater vigilance against such practices.

The World Bank said that the magnitude of internal migration is about two-and-a-half times that of international migration. “Lockdowns, loss of employment, and social distancing prompted a chaotic and painful process of mass return for internal migrants in India and many countries in Latin America. Thus, the COVID-19 containment measures might have contributed to spreading the epidemic. Governments need to address the challenges facing internal migrants by including them in health services and cash transfer and other social programmes, and protecting them from discrimination,” the report noted.

Migration to fall
Additionally, the Bank said that migration flows are likely to fall, but the stock of international migrants may not decrease immediately, since migrants cannot return to their countries due to travel bans and disruption to transportation services. Migrant workers tend to be vulnerable to the loss of employment and wages during an economic crisis in their host country, more so than native-born workers. Lockdowns in labour camps and dormitories can also increase the risk of contagion among migrant workers. Many migrants have been stranded due to the suspension of transport services. Some host countries have granted visa extensions and temporary amnesty to migrant workers, and some have suspended the involuntary return of migrants. In 2020, remittance flows to low- and middle-income countries are expected to drop by around 20 percent to $445 billion, from $554 billion in 2019. In the midst of this sharp decline, the relative importance of remittance flows as a source of external financing for low- and middle-income countries is expected to rise. This is because foreign direct investment is expected to decline by even more, due to travel bans, disruption of international trade, and wealth effects of declines in the stock prices of multinational companies. This Brief estimates that it could fall by more than 35 percent. Private portfolio flows through stock and bond markets could fall by over 80 percent. The global average cost of remittances declined to 6.8 percent in the first quarter of 2020, from 6.9 percent a year previous. This remains far above the Sustainable Development Goal target of 3 percent. Remittance service providers have been affected by lockdowns, shorter business hours, and social distancing. This has increased the relative importance of electronic transfers, since some cash-based services and remittance operators have been closed or impacted negatively by the crisis. Although the use of digital payment instruments for sending remittances is increasing, poorer and irregular migrants often lack access to online services. They require the origination and distribution of funds through banks, payment cards, or mobile money.

Online transactions
Online transactions (like cash-based services) require remittance service providers to exercise vigilance against fraud and financial crime, to comply with antimoney laundering and countering the financing of terrorism (AML/CFT) regulations. However, such due diligence has become difficult amid staff shortages. So far, government policy responses to the COVID-19 crisis have largely excluded migrants and their families back home. But there is a strong case for including migrants in the near-term health strategies of all countries, given the externalities associated with the health status of an entire population in the face of a highly contagious pandemic. Also, governments would do well to consider short-, medium-, and long-term interventions to support: (i) stranded migrants; (ii) the remittance infrastructure; (iii) loss of subsistence income for families back home; and (iv) access to health, housing, education, and jobs for migrant workers in host/transit countries and their families back home. The pandemic has also highlighted the global shortage of health professionals and an urgent need for global cooperation and long-term investments in medical training.