Declare remittance service providers essential: UN body
With the significant decline in money sent home by migrants due to the impacts of the Covid-19 pandemic, the United Nations' International Fund for Agricultural Development (IFAD) yesterday called for governments across the world to declare remittance service providers essential businesses in times of crisis.
"Remittances are a lifeline for poor families in low and middle income countries. Governments should take measures and do everything possible to facilitate the flow of funds during crises like the Covid-19 pandemic," said Gilbert F Houngbo, president of IFAD, on the occasion of the International Day of Family Remittances.
Personal remittances account for a significant portion of the GDP in most South Asian countries, the UN agency said in a statement.
It said the Covid-19 restrictions have hit the economic sectors that employ migrant workers, such as tourism, hospitality and agribusiness, hard.
As a result, many migrants have become underemployed or unemployed. Remittance flows are projected to make their sharpest decline in history, falling by 20 percent in 2020.
"IFAD is now tracking the impact of declining remittances on the 'receiving end' in developing countries, where typical remittances of $200 to $300 per month account for about 60 percent of household income," said Pedro de Vasconcelos, the head of IFAD's Financing Facility for Remittances.
"While the reduction in remittances will not fall evenly across countries and communities, the impact is likely be substantial in rural areas where remittances count the most."
To address the situation, IFAD called on governments to develop more conducive policies and regulatory environments that enable competition, regulation and innovation on the remittance market and declare these services essential.
Private sector entities should invest in developing innovative technological solutions for remittance transfers to reduce costs, improve speed, enhance security and increase flows through digital means to remote areas, it said.
Access to remittance services, especially in poor rural areas, needs to be improved. There should be incentives to develop and use digital products that link remittances to a full range of financial services, so that migrants and their families can be encouraged to save and invest their money.
Since March, IFAD has led a global Remittances Community Task Force comprised of 35 international organisations, inter-governmental bodies, industry and private sector groups, and networks of diaspora organisations, which is working on a series of concrete measures to help mitigate the impact of the Covid-19 crisis on the lives of the one billion people directly involved in sending and receiving remittances, the statement read.
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