Remittances and COVID-19: Is Pakistan ready for a likely decline in flows?

Remittances and COVID-19: Is Pakistan ready for a likely decline in flows?

Publication details

  • Wednesday | 01 Apr, 2020
  • Kashif Majeed Salik
  • COVID-19 Policy Review Series
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Introduction: The spread of COVID-19, an unprecedented anomaly of our times, is so wide and rapid that even most advanced economies are unable to respond to it quickly and appropriately. If this situation persists longer, not only the global health system may collapse but also there are apprehensions of large-scale socioeconomic meltdown. The Global North is currently the most-affected region due to Coronavirus outbreak where most of the governments have clamped complete lockdowns (Map A). These countries not only drive the global economy, trade and politics but also paved the way for labour migration from the Global South, which is underdeveloped or least developed. The Global South is heavily dependent on financial remittances from migrants. In 2019, the global flow of remittances to developing countries was recoded US$ 550 billion, which is larger than Foreign Direct Investment (FDI) and Official Development Assistance (ODA) (Plaza et al. 2019). This flow of remittances helped the developing countries to reduce poverty, overcome food insecurity, support balance of payments, and contribute to national economic growth....