Migration creates new livelihood and income opportunities, including through remittances. Interruptions to cross-border financial flows related to the current pandemic particularly hit migrants and their families. Migrants in most cases have limited safety nets, due to often being in informal employment, engaged in jobs that cannot be done remotely and excluded from government measures to mitigate the impact of job losses, resulting in limited to no income. In this crisis, many migrant workers face unemployment or reduced income, are stranded in their host countries with little or no support and are unable to support their families at home.
Migrants’ families in their home countries depend on incoming remittances for basic necessities such as purchasing food, and paying for housing, education and healthcare. Without remittances, families face the risks and acute consequences of not being able to afford these basic needs.
On both ends of the remittance channel, remittance service providers have had to close or reduce their service hours while mobility restrictions and limited public transportation make it difficult for people to reach branches and cash-in/out agents. These access restrictions are critical challenges to many migrants’ and their families’ abilities to send and receive remittances as there is limited awareness and adoption of digital channels. A reduction in remittances has the potential to reverse the development progress made on the 2030 Agenda for Sustainable Development and the SDGs.
Remittances account for more than 5 percent of GDP for at least 60 LMICs. For Least Developed Countries and Small Island Developing States, this share is often even larger. As foreign direct investment is expected to decline by more than 35 percent in 2020, remittance flows are expected to become even more important as a source of external financing for LMICs.
A reduction in remittances can have major ripple effects across entire local economies and communities, resulting in a decrease in productive investment, consumption spending and access to education and health services. As such, it is critical that action is taken to ensure that remittances – from migrants and from wider diaspora communities – keep flowing, including through supporting greater access to and use of digital technologies.
When migrants’ income is reduced, remittances fall and so the revenues of remittance service providers in sending and receiving countries also decline. Unexpected flows and volatile exchange rates make it difficult for remittance service providers to manage their liquidity. Forced closures and remote working pose challenges to providers’ ability to continue operating.
Remittance service providers are worried about their customers’ health and safety, but face challenges in transitioning clients to digital channels due to lack of digital readiness in the market and face-to-face customer verification obligations. In addition, the lack of identification documents, adequate financial awareness, access to digital technology and digital literacy amongst migrants and families can mean that when access to formal channels declines, there is an increased reliance on informal remittance channels. Higher rates of digital financial inclusion can mitigate this, and help keep flows in formal channels.
With a view to leaving no one behind in the current crisis, the following call to policymakers, regulators and remittance service providers should be considered for the benefit of migrants, their families and local communities in line with the 2030 Agenda for Sustainable Development.
Declare the provision of remittances as an essential financial service
Establish economic support measures that will benefit migrants and remittance service providers
Support the development and scaling up of digital remittance channels for migrants and families
Advise banks to apply risk-based due diligence measures with a view to continuing to provide banking services to remittance service providers during the crisis
Consider clarification of compliance and licence renewal requirements for remittance service providers during the crisis
Provide regulatory guidance for proportionate Know-Your-Customer (KYC) requirements that are critical to scale digital financial services, especially for unbanked and undocumented individuals
Explore measures to provide relief to migrants, such as reducing remittance transaction costs, free cash pick-up and delivery, and other value-added services
Invest in financial education and awareness, including on digital remittance channels and available agent locations
Promote inter-operable open systems that can enable a foundation upon which migrant-centric financial products can be offered
The "COVID-19 Response Tracker: Migrants and Remittances" strives to encourage and facilitate knowledge sharing among stakeholders by keeping record of responses to the coronavirus pandemic that beneficially impact migrants and/or remittances. These actions and initiatives may have been considered by the respective governments independent of their association with the Call to Action.
The Tracker is hosted and maintained through joint efforts of Call to Action members, led by the governments of Switzerland and United Kingdom. Governments or organizations may submit initiatives through the form below. Following submission all answers will be reviewed for accuracy and legitimacy before being published to the tracker. Please include your contact information so that team may reach out if additional corroboration is required.
The actions and initiatives updated in the airtable are based on secondary sources that have been vetted through publicly available information. For any concerns, please send an email to calltoaction@knomad.org. The survey link is here
On the occasion of the International Day of Family Remittances, Switzerland and the United Kingdom in partnership with World Bank/KNOMAD, UNCDF, IOM, UNDP, the International Association of Money Transfer Network, and the International Chamber of Commerce would like to invite you to a webinar to build on the recently launched Call To Action "Remittances in Crisis: How to Keep them Flowing"
Time:
8:00-9:00 ET / 14:00-15:00 CET Tuesday, June 16 2020
Please register for the webinar at: https://bit.ly/RemittanceWebinar
On behalf of the Governments of the United Kingdom and Switzerland, we invite to you to join the anniversary event of the Call to Action “Remittances in Crisis: How to Keep them Flowing” on Friday, 25 June 2021, from 3:00 – 4:30 pm CEST / 9:00 – 10:30 am EST (see letter enclosed).
The Call to Action created an awareness about the critical importance of remittances for the achievement of the Sustainable Development Goals. To date, 31 Governments and 16 organisations from the multilateral system, industry associations and civil society have joined the coalition in support of the Call to Action.
This high-level event on June 25 will provide an opportunity to discuss the remittance trends during the pandemic and identify effective measures taken and progress made to mitigate the negative impact of COVID-19 on remittances.
At the anniversary event, the United Kingdom and Switzerland will also propose the continuation of the Call to Action to offer a space to take joint action in addressing the persistent challenges in the remittance market and pursue the opportunities the crisis has created in this regard. The agenda for the meeting will follow at a later stage.
Invitation Call to Action Anniversary Event 25 June 2021 Agenda Call to Action Anniversary Event 25 June 2021 Concept Note Stocktaking ReportPlease register here:
Please see also connection details below:
Join meetingMeeting link: https://worldbankgroup.webex.com/meet/pr97477
Meeting number (access code): 730 429 518
Yours sincerely,
Rachel Turner
Director, International Finance
Foreign, Commonwealth and Development Office
Christian Frutiger
Assistant Director General
Swiss Agency for Development and Cooperation
The Call to Action aims to raise awareness about the importance of remittances for low- and middle-income countries. It also aims to identify key measures that could mitigate the significant impact of the COVID-19 crisis on remittances, highlight them for the attention of policymakers, regulators and remittance service providers, and generate momentum for action.
The Call to Action encourages policymakers, regulators and remittance service providers to improve access for migrants and wider diaspora communities to physical or digital remittance services. Facilitating the sending and receiving of remittances without obstacles will enable hundreds of millions of people globally who rely on these flows, particularly those in vulnerable situations due to the current crisis, to cover basic necessities such as food, education and healthcare. This will prevent millions of people from falling into poverty, which would negatively impact the achievement of the SDGs. Maintaining the flow of remittances is vital for the resilience and recovery of local economies and communities in many low- and middle-income countries heavily affected by the health and economic crisis caused by the spread of COVID- 19.
The current global crisis related to COVID-19 affects all regions of the world, all generations and all segments of society. Besides health vulnerabilities, migrant workers and their families are also hit hard by the economic effects of the crisis. Many migrants have lost their jobs and are compelled to return home, others are stranded without pay in their countries of destination, leaving them without income to support themselves or their families back home.
One crucial aspect of how the COVID-19 crisis is affecting migrants, members of diaspora communities, as well as the families, communities and economies that rely on receiving remittances, is the severe disruption to those remittance flows. The secondary impacts of COVID-19 include migrants having less or no income, closure or reduced operating hours of remittance service providers, challenges for migrants in accessing remittance transfer services due to lockdown restrictions, and difficulties for their families who cannot receive the remittances.
The current global crisis related to COVID-19 affects all regions of the world, all generations and all segments of society. Besides health vulnerabilities, migrant workers and their families are also hit hard by the economic effects of the crisis. Many migrants have lost their jobs and are compelled to return home, others are stranded without pay in their countries of destination, leaving them without income to support themselves or their families back home.
One crucial aspect of how the COVID-19 crisis is affecting migrants, members of diaspora communities, as well as the families, communities and economies that rely on receiving remittances, is the severe disruption to those remittance flows. The secondary impacts of COVID-19 include migrants having less or no income, closure or reduced operating hours of remittance service providers, challenges for migrants in accessing remittance transfer services due to lockdown restrictions, and difficulties for their families who cannot receive the remittances.
This is particularly urgent as remittances provide a vital lifeline for hundreds of millions of people round the world, and yet the World Bank has projected that as a consequence of the crisis, flows to low- and middle-income countries will decline by about 20% – roughly US$110bn – in 2020. This significant reduction will not only cause hardship for families and communities directly dependent on remittances and may drive further migration, it also carries the risk of adverse macroeconomic impact in many developing and emerging countries. In various low- and middle-income countries, total remittances correspond to more than 10% of their GDP, and remittances to low- and middle-income countries as a whole exceed both foreign direct investment and ODA. Given that in past crises remittances have typically acted as a countercyclical and stabilising factor, the impact of a drastic slump in remittances will be significant.
The Call to Action “Remittances in Crisis: How to Keep them Flowing” is an initiative jointly launched by the Governments of Switzerland and the United Kingdom on 22 May 2020, in partnership with the World Bank, UNCDF, IOM, UNDP, the International Association of Money Transfer Networks (IAMTN) and the International Chamber of Commerce (ICC).
The Call to Action aims to raise awareness about the importance of remittances for low- and middle-income countries. It also aims to identify key measures that could mitigate the significant impact of the COVID-19 crisis on remittances, highlight them for the attention of policymakers, regulators and remittance service providers, and generate momentum for action. Because of the nature of the Call to Action, it is not set up with either the intention or the funding to implement specific programmes (for example to provide technical assistance, or capacity-building).
An invitation to join the Call to Action was issued to all countries and a range of other stakeholders on 22 May 2020. Interested countries and stakeholders are encouraged to join the Call to Action ahead of the United Nations International Day of Family Remittances on 16 June, but this is not a hard deadline – we would welcome others joining at any time to indicate their support for this critical issue.
The Call to Action is designed to highlight the vital role that remittances play in supporting hundreds of millions of people round the world, and to generate momentum around a number of important measures that can keep remittance flows moving in the crisis. Countries and stakeholders joining the Call to Action are expected to contribute to the promotion and implementation of the Call to Action.
The Call to Action identifies a number recommendations for policymakers, regulators and remittance service providers that should be considered for the benefit of migrants, diaspora communities, and the economies, communities and families that rely on receiving remittances.
It is not the expectation that all recommendations will be equally applicable in all countries. Some will be more relevant in some places than others, in particular depending on whether a country mostly sends or receives remittances. In addition, the expectation is not that by joining the Call to Action a national government necessarily undertakes to fully implement all those measures in its territory – not least because there may well be other stakeholders involved (including in many countries state or provincial governments).
By joining, stakeholders endorse the Call to Action, but they can also expect to benefit from actions generated. For example, countries who mostly receive remittances will benefit from those flows being maintained. Remittance service providers will benefit from efforts by policymakers and regulators to keep businesses operating and keep remittance channels open. The more stakeholders join, the greater the impact and the more effective the call to action will be.
In addition, access to existing global platforms on remittances can be facilitated for all who join the Call to Action, to support the promotion and implementation of its recommendations. Countries and other stakeholders who join are invited to share contact details for their focal point.
The Call to Action is designed to highlight and promote measures that will generate action from key stakeholders – in particular policymakers, regulators and remittance service providers – to mitigate the impact of COVID-19 on remittances. Any direct activities that the Call to Action may initiate will depend both on demand, and offers of resources/capacity, from those who join. It is well understood that there are other initiatives that also work in this area, and it will be important to join forces to ensure that any activities complement other work being undertaken.
Subject to the points above, activities of the Call to Action could include:
