Remittance flows to low- and medium-income countries in 2020 declined less than expected, according to the World Bank. In the midst of the pandemic, people kept sending money home - a lifeline that exceeded foreign direct investment and aid flows.
The World Bank said that "recorded remittance flows to low- and middle-income countries reached $540-billion in 2020, just 1.6% below the 2019 total of $548-billion". It noted that the decline was smaller than the 4.8% drop recorded in 2009 in the throes of the global financial crisis.
"It was also far lower than the fall in foreign direct investment (FDI) flows to low- and middle-income countries, which, excluding flows to China, fell by over 30% in 2020. As a result, remittance flows to low- and middle-income countries surpassed the sum of FDI ($259-billion) and overseas development assistance ($179-billion) in 2020," the Washington-based lender said.
Remittance flows mostly refer to money that someone working abroad has sent back home to their family. Presumably, many foreign workers from developing economies had reduced income last year in the face of the lockdowns to contain the Covid-19 pandemic's lethal march. Much, though certainly not all, of that workforce is engaged in relatively low-wage jobs...