The recent World Bank report sheds light on the significant repercussions of the Covid-19 pandemic on global migration and remittances, with a particular focus on India’s projected financial fall. As the world grapples with a recession and wage reductions for migrant workers, it becomes critical to understand how these changes will shape global economy and socio-economic dynamics.
Projected Fall in Remittances
According to the report, India can anticipate a 23% drop in remittances in 2020, while the international community will experience a nearly 20% decrease overall. This substantial decline is predominantly attributed to the recession triggered by the Covid-19 pandemic.
Migrant workers, most susceptible to wage cuts and job losses during an economic downturn, will be profoundly impacted. This will directly affect expatriate Indians working not only in the Gulf but around the world, particularly those in oil-producing countries like Saudi Arabia and the United Arab Emirates, which will also face a significant hit due to plummeting crude prices.
Understanding Remittances
Remittances refer to the money sent abroad, generally to family members living in another country. It constitutes a major income source for people dwelling in low-income and developing countries, often exceeding direct investments and official development assistance.
Primarily, remittances help families meet their basic needs such as food and healthcare. India, being the world’s highest remittance recipient, relies heavily on this source to boost its foreign exchange reserves and finance its current account deficit.
About the World Bank
Established in 1944 during the Bretton Woods Conference, the World Bank originated as the International Bank for Reconstruction and Development (IBRD) in tandem with the International Monetary Fund (IMF). Today, the World Bank Group boasts a unique global partnership of five institutions striving to alleviate poverty and promote shared prosperity in developing countries with 189 member nations.
World Bank Reports
Among the key reports released by the World Bank are the Ease of Doing Business, Human Capital Index, and World Development Report. These publications provide essential insights into global economic trends and practices.
World Bank’s Five Institutions
The five development institutions under the World Bank cover a broad range of financial and advisory assistance. The IBRD offers loans, credits, and grants; the International Development Association (IDA) furnishes low- or no-interest loans to economically challenged countries; the International Finance Corporation (IFC) provides investments, advice, and asset management for companies and governments; the Multilateral Guarantee Agency (MIGA) insures lenders and investors against political risks like warfare; while the International Centre for Settlement of Investment Disputes (ICSID) mediates investment conflicts between investors and countries.
