COVID

NO.148 AUGUST2020 KEYPOINTS •TheeconomicrecessionfromtheCOVID-19pandemicthreatensthejobsecurityandwell-beingofover91millioninternationalmigrantsfromAsiaand thePacific. ADBBRIEFS COVID-19ImpactonInternationalMigration,Remittances,andRecipientHouseholdsinDevelopingAsia1 •TotalremittancestoAsiaareexpectedtodropbetween $31.4billion(baselinescenario)and$54.3billion(worst-casescenario)in2020,equivalentto11.5%and19.8%ofbaselineremittances,respectively. •WithmanyhouseholdsdependingoninternationalremittancesindevelopingAsia—particularlyinthePacificandCentralandWestAsianeconomies—asudden AikoKikkawaTakenaka Economist EconomicResearchandRegionalCooperationDepartment AsianDevelopmentBank RaymondGaspar Consultant EconomicResearchandRegionalCooperationDepartment AsianDevelopmentBank JamesVillafuerte SeniorEconomist EconomicResearchandRegionalCooperationDepartment AsianDevelopmentBank BadriNarayanan Consultant EconomicResearchandRegionalCooperationDepartment AsianDevelopmentBank stopinremittanceflowtotheseregionscouldpushpeopleintopoverty. •Sourceandhostcountriesofmigrantworkersareencouragedtoextendtemporarysocialprotectionprogramstoassiststrandedandreturnedmigrants;extendsocialprotection tothepoorincludingtheremittancerecipienthouseholdswhofallbacktopoverty;design comprehensiveimmigration,health,andlaborpoliciesthatenablemigrantstoreturntojobs;andensurethecontinuityofremittance servicesandenabling INTRODUCTION:THECOVID-19PANDEMICANDINTERNATIONALMIGRATIONFROMASIAANDTHEPACIFIC Thecoronavirusdisease(COVID-19)pandemicrisksdevastatingimpactoneconomiesaroundtheworld,includingwidespreadunemploymentandlowerincomes.Toward theendofJune2020,workplaceclosuresappliedto77%ofcountryobservationsworldwide,albeittoavaryingextent—9countriesstillrequiredstrictclosingofallbutessentialworkplaces.2Alongsidetheeffectsofthepandemiconinternationalanddomestictravel,trade,investmentflows,andotherproductiveactivities,theAsianDevelopmentBank(ADB)estimatesemploymentinAsiaandthePacifictobelowerbyasmuchas167millionpersonmonthsshouldcontainmentmeasureslast 6monthsfromwhentheoutbreakfirstintensified(ADB2020).Jobcutsintheregionarereducingwageincome,withestimatesofthedeclineprojectedtorangefrom $359billionto$550billion.Migrantworkersmaybeamongthehardesthitgroups. 1ThisbriefwasdraftedundertheoverallguidanceofCyn-YoungParkandbenefitedfromthereviewandcommentsbyYasuyukiSawada,GunturSugiyarto,andKijinKim.Theauthorswishto businessenvironment. acknowledgethecontributionsofAleliRosarioandMa.ConcepcionLatoja. 2OxfordCOVID-19GovernmentResponseTracker.https://www.bsg.ox.ac.uk/research/research-projects/coronavirus-government-response-tracker. ISBN978-92-9262-318-0(print) ISBN978-92-9262-319-7(electronic) ISSN2071-7202(print) ISSN2218-2675(electronic)PublicationStockNo.BRF200219-2 DOI:http://dx.doi.org/10.22617/BRF200219-2 ADBBRIEFSNO.148 MigrantsoriginatingfromAsiaandthePacificaccountfor33%ofmigrantworkersworldwidein2019(Figure1a),thelargestshare.MajordestinationregionsforAsianmigrantsincludedAsia(35%),theMiddleEast(27%),EuropeinclusiveoftheRussianFederation(19%),andNorthAmerica(18%).AlloftheseregionshavebeendevastatedbytheeconomicimpactsoftheCOVID-19pandemic,witheconomicoutputintheseeconomiesprojectedtocontractfrom6.7%to10.2%in2020. RemittancestoAsiaandthePacific,amountingto$315billionin2019,areanimportantandstablesourceofincomeforfamiliesbackhomeandhelpstrengthenexternalfinancing—alongsideforeigndirectinvestmentandtourismreceipts—inmanydevelopingeconomies(Figure1b).Theyboostgeneralconsumptionaswellasinvestmentandhelpsustaingovernmentdebtsbycontributingtotheforeigncurrencyrevenuebase. Ingeneral,remittanceinflowsareconsideredcountercyclicalasmigrantstendtosendmorefundstotheirfamiliesbackhome, whofaceeconomicshockssuchasnaturaldisasters(Halliday2006,Yang2008).Unliketheusualdisastersandshockswithlocalizedeffect,however,theCOVID-19pandemicissimultaneouslyhurtingmigrantsourceandorigincountries. Furthermore,theCOVID-19crisishassuppressedglobaldemandforoil,3causingtherecentcollapseinoilprices,anadditionalblowtopetrol-heavyeconomiessuchastheRussian Federation4andintheMiddleEast,majorhoststoAsianmigrants,especiallyfromCentralAsiaandSouthAsia.Thedeclinein oilprices,whichstartedinthesecondhalfof2014anddippedbelow$40perbarrelbytheendof2015,wasassociatedwiththesameyeardeclineinremittancesfromoil-producingcountries,particularlyfromtheRussianFederation(Barne2016).ThevalueofremittancesfromtheRussianFederationhasfallenin TurkmenistanandUzbekistan(47%),theKyrgyzRepublic(25%),Tajikistan(24%),andKazakhstan(23%)in2015. Figure1:InternationalMigrantStockandRemittancestoAsiaandthePacific a.Totalmigrantstockatmidyearbyregionoforigin1990–2019,million b.FinancialinflowstoAsiabytype,$billion 300800 250 600 200 400 150 200 100 50 0 0–200 19901995200020052010201520191991199419972000200320062009201220152018 AsiaAfricaEurope LatinAmericaandtheCaribbean MiddleEast NorthAmericaOtherregions NetequityinflowsNetFDIinflows ODAandofficialaid Remittancereceipts Tourismreceipts FDI=foreigndirectinves