These are the countries most affected by the falling remittances sparked by the Covid-19 pandemic

The economic slowdown in rich countries is felt by middle- and low-income countries.
The economic slowdown in rich countries is felt by middle- and low-income countries.
Image: AP Photo/Amr Nabil
We may earn a commission from links on this page.

Remittances—the money immigrants send back to their home countries—will be lower this year due to the Covid-19 pandemic. Countries dependent on that cash have already started preparing for the decline.

While Covid-19 hasn’t led to large casualties in countries like Haiti (25 cases, 1 deaths) and Tonga (no cases), they are experiencing an economic shock caused by lower remittance inflows. Remittances are a key source of capital income for poorer countries. According to World Bank data, middle- and lower-income countries receive remittances at about the same level as foreign direct investment.

So far, eight countries have enacted policies that cite a forecasted plunge in remittances, according to International Monetary Fund’s policy tracker.

Almost 30% of Kyrgyzstan’s GDP in 2019 came from money and goods transferred from its nationals abroad. About three quarters of it came from Russia. Kyrgyzstan has seen remittances fall 15% compared to last year, according to IMF. With less foreign cash flowing into its borders, its central bank sold a large share of its foreign currency reserves to balance the country’s payments for foreign goods.

Tonga and Haiti receive most of their remittances from the US. Gambia and Senegal’s come from Europe. Egypt and Bangladesh get theirs from Middle Eastern countries. These remittance-sending areas are hit the hardest by Covid-19 and the global crash in oil prices.

Many immigrant workers are losing their jobs in the US and Europe as businesses close down to contain the spread of the virus. They might not be able to continue to support their families back home who rely on the cash from abroad.

Daniel Canning, the managing director for the Americas region at WorldRemit, an international money transfer services provider, is anticipating a decline in both transfer frequency and the transfer amounts from countries that are currently under stay-at-home orders. A “shutdown means people are not going to work, and they are not given a paycheck. Their remittance behaviors are going to be impacted in the short term,” says Canning,  “As people go back to work, we believe and we’ve seen historically, remittances will hit back up.”