Summary

The economic crisis induced by COVID-19 could be long, deep, and pervasive when viewed through a migration lens. Lockdowns, travel bans, and social distancing have brought global economic activities to a near standstill. Host countries face additional challenges in many sectors, such as health and agriculture, that depend on the availability of migrant workers. Migrants face the risk of contagion and also the possible loss of employment, wages, and health insurance coverage. This Migration and Development Brief provides a prognosis of how these events might affect global trends in international economic migration and remittances in 2020 and 2021.

Considering that migrants tend to be concentrated in urban economic centers (cities), and are vulnerable to infection by the coronavirus, there is a need to include migrants in efforts to fight the coronavirus. Migrant remittances provide an economic lifeline to poor households in many countries; a reduction in remittance flows could increase poverty and reduce households’ access to much-needed health services. The crisis could exacerbate xenophobic, discriminatory treatment of migrants, which calls for greater vigilance against such practices.

This Brief is largely focused on international migrants, but governments should not ignore the plight of internal migrants. The magnitude of internal migration is about two-and-a-half times that of international migration. Lockdowns, loss of employment, and social distancing prompted a chaotic and painful process of mass return for internal migrants in India and many countries in Latin America. Thus, the COVID-19 containment measures might have contributed to spreading the epidemic. Governments need to address the challenges facing internal migrants by including them in health services and cash transfer and other social programs, and protecting them from discrimination.

Migration flows are likely to fall, but the stock of international migrants may not decrease immediately, since migrants cannot return to their countries due to travel bans and disruption to transportation services. Migrant workers tend to be vulnerable to the loss of employment and wages during an economic crisis in their host country, more so than native-born workers. Lockdowns in labor camps and dormitories can also increase the risk of contagion among migrant workers. Many migrants have been stranded due to the suspension of transport services. Some host countries have granted visa extensions and temporary amnesty to migrant workers, and some have suspended the involuntary return of migrants.

In 2020, remittance flows to low- and middle-income countries are expected to drop by around 20 per cent to $445 billion, from $554 billion in 2019. In the midst of this sharp decline, the relative importance of remittance flows as a source of external financing for lowand middle-income countries is expected to rise. This is because foreign direct investment is expected to decline by even more, due to travel bans, disruption of international trade, and wealth effects of declines in the stock prices of multinational companies. This Brief estimates that it could fall by more than 35 per cent. Private portfolio flows through stock and bond markets could fall by over 80 per cent.