The crucial contribution of remittances to the alleviation
of the financial shock caused by the COVID-19 pandemic
Taking into consideration the recent publication of Oxford Economics report, in January 2021, ‘The Remittance effect: A Lifeline for developing Economies through the pandemic and into recovery,’(source: https://www.weforum.org/agenda/2021/01/remittances-key-post-covid-recovery/)
The report illustrates how remittances have positively supported growing economies, in the short and longer term. Throughout the pandemic, international remittances have served as the prime financial flow into the developing countries, exceeding all other channels of financial support from fiscal or government authorities. They truly weave a “safety net” for the recipient communities, covering for their most immediate needs and offering a considerable multiplier effect in the local economies. Hikmet Ersek, CEO of Western Union stresses some critical aspects of this report.
As Hikmet Ersek says, “Today, it is my honor to bestow a new title upon our customers, these global citizens, and local heroes: they are the world’s “Economic First Responders.” The love and money they send across the world’s borders have helped smooth the economic shocks from the pandemic, fostering stronger resilience and recovery in their home nations throughout 2020 and into 2021 and beyond than would have been the case without these flows.
These global citizens provide an essential lifeline to their home communities by funding necessary expenditures, lowering extreme poverty, and supporting healthcare and education. They serve on the front lines within their host communities as medics, scientists, grocers, bus drivers, construction workers, teachers, and contribute human capital toward the functioning of a robust economy.”
For a hundred and seventy years now, Western Union connects individuals to their families globally, anyplace, any day. At the beginning via a worldwide telegraph network; nowadays, through one of the world’s biggest international economic networks, transferring 130 currencies electronically to nearly any point on the planet in a few minutes.
The contributions of “Economic First Responders.” throughout an unparalleled global pandemic highlight the criticality of remittances and those who send them. They are a resilient and inclusive global financial force.
Policymakers, development specialists, and economists should give cross-border remittances the attention and priority they deserve as they are a large global economic engine.
The need for innovation and technology improvement has never been greater than today, that the need to have on-the-ground financial assistance flowing directly across borders is imperative.
To sum up, The Oxford economic report illustrates what Western Union has witnessed repeatedly: Crises make humans more resilient and determined to offer aid to the ones they care about the most. COVID-19 pandemic has just proven the conclusion once again!
When times get tough in growing economies, remittance-senders come to be the front-line actors of economic security. Simple mathematics indicate that remittances’ volume, reliability, and cascading impact render them the decisive factor of the return to normalcy for the developing economies.