The Asia Pacific is known for having a third of the migrant workers in the world. So they have a dependency on the yearly remittance inflow in the economy. So drop in remittance inflow can be a major hit in the regional economy.
According to the stats, 91 million migrant workers belong to the region. Since most of the countries in the region are developing nations this might be an obstacle for the development of the region.
ADB briefed the recent situation at the ‘COVID-19 Impact on International Migration, Remittances, and Recipient Households in Developing Asia.’
Policy measures needed to reduce the economic fallout in the Asia Pacific
A strong policy response is the only solution to save the countries from a potential economic failure in the region, according to the ADB officials.
ADB economists estimate that the region faces remittance losses ranging from USD 31.4 billion to USD 54.3 billion. To reduce the economic and social impacts, policy responses are proposed in areas such as social protection, immigration, labour, and health.
Before a novel Coronavirus spread in the region in 2020 Asia Pacific had the most remittance recipients in the world with the following countries taking a bigger share.
These countries share their remittance to the GDP with higher inflows comparing to other countries. Central Asian countries, on the other hand, send migrants to Europe and Russian federation taking significant foreign currency inflow.
However, ADB is mostly worried about the Asia Pacific region which is responsible for a $315 billion remittance inflow. The remittance inflow has been used in the region to boost consumption, investment, and reduce government debts for decades.