Transfers abroad staggered blow


MIAMI – Until a month ago Diana Leticia Hernandez was selling face creams door-to-door in Miami. Her husband painted houses. The money fed her family and at least six relatives in Honduras.

Hernandez hasn’t sold anything in South Florida since last month due to fear and social distancing restrictions. Her husband didn’t work either. This month, for the first time since arriving in the United States 16 years ago, they were unable to send about $ 300 home to help their families with food, rent, medicine, and school bills.

In the Honduran town of Villa Nueva Cortez, Hernandez’s mother, Teonila Murillo, is running out of money to buy insulin for her diabetes, and Hernandez’s brother doesn’t know if he can pay his $ 60 rent next month.

“I’m really bad,” Murillo told the Associated Press. “There is no money and no work. If you get sick here, you will die.”

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The havoc Covid-19 has wreaked in the developed world by affecting the financial lifelines for people in Latin America, Africa and Asia.

The World Bank estimates that in 2018, the last year for which figures are available, a record $ 529 billion was sent to developing countries through official channels. Billions more moved undetected in cash. Many of these remittances are sent home by people in service jobs or occupations such as day laborers who do not have a monthly paycheck and who are hardest hit by the global downturn. Some also come from migrants in illegal countries who are not eligible for part of the aid packages uncorked by advanced economies.

SHOCK WAVES

With the coronavirus crippling industries, many earners in Miami, Las Vegas, London, and other economic centers can no longer afford to transfer their monthly $ 50, $ 100, or $ 200 to Honduras, Somalia, or India. The shock waves drive their loved ones to despair.

“I’m scared,” said Hernandez, 45. “They’re counting on me. I’m trying to get whatever I can send, $ 30, $ 50, whatever.”

All over Africa, where remittances have exceeded foreign aid and foreign direct investment and around $ 82 billion in 2018 alone, countless millions of people are already feeling the need. A money transfer company in Europe sending money to Africa saw volume fall 80 percent in a single week, the Washington-based Center for Financial Inclusion said last month.

In Somalia, Abdalla Sabdow, a former security guard and father of six, recently went through Mogadishu to check the $ 200 he receives a month from his cousin Yusuf Ahmed, a taxi driver in the United States. But the money came too late. His cousin, like many in the United States, was locked up at home for almost three weeks and unable to work.

“I came back empty-handed,” said a worried-looking Sabdow after peering under the partition as worker, one with a face mask and gloves, fanned through stacks of crispy $ 100 bills. “I asked the counter to double check my name, but nothing happened. Time is running out. … It’s very worrying. “

With three of his young children at home on his laps, he was concerned about defaulting on rent, no small matter in a city where camps with hundreds of thousands of internally displaced people are constantly reminded of the fragility of the situation.

“We had a big problem this month,” his cousin Ahmed said later on the phone. He hoped to send the money the following week.

Remittances account for more than 5% of GDP in at least 13 African countries, sometimes far more, the Brookings Institution said last month. Kenya’s remittances are now its largest source of foreign currency, its president said in December. More than a third of all money transfers to Africa come from the European Union, and other significant sources include North America, Gulf States and other African countries. Informal remittances, while not recorded in the World Bank and other data, are estimated to be a source of additional billions of dollars.

“We’re going to see a decline in the economy,” said Olayinka David-West, professor at Lagos Business School in Nigeria, in a recent seminar at the Center for Financial Inclusion. Africa’s largest oil producer is also the largest recipient of remittances in sub-Saharan Africa, with the money exceeding its petroleum revenues.

Central America, a region heavily reliant on remittances from the United States, could see a 20 percent decrease from $ 23.9 billion last year to $ 19.12 billion this year, Jonathan Mencos said, Director of the Central American Institute of Fiscal Studies.

Across Latin America and the Caribbean, US remittances could fall between 7 and 18 percent this year, from $ 75 billion last year, according to the Washington-based Inter-American Dialogue.

“‘It’s a wide range, and unfortunately the largest drop may be more precise,” said Dr. Manuel Orozco, director of migration, remittances and development at the think tank.

A FAMILY’S STORY

In the largely indigenous Guatemalan city of Joyabaj, half of the 100,000 residents depend on remittances, almost all of them from the USA

Rosa Lopez, 18, recently left a money transfer office where her two-year-old son and $ 100 were kept by her sister who works at a Texas dairy. The dairy cut the working hours in half and forced the nurse to cut the money she sent.

The money that came will enable Lopez and seven other relatives to buy rice, beans, and other staple foods, but they may no longer have to pay the light and water bills, she said.

“We have to find a way not to starve to death,” said Lopez. “She’s the only one who helps the whole family.”

One of the most remittance-dependent countries in the world is Haiti, where remittances of US $ 3 billion from abroad make up about 30 percent of gross domestic product.

Juliette Andre, a 25-year-old nursing student in Port-au-Prince, received $ 150 a month from her aunt who cares for the elderly in Brooklyn, NY. In March, Andre received a total of $ 50.

“That is nothing in Haiti because the cost of living has quadrupled,” she said. “We’ll fight for a while.”

Asia is the world’s largest recipient of remittances, with India receiving the largest amount in the world at $ 79 billion in 2018, followed by China at $ 67 billion, according to the World Bank. The Philippines are also among the top 5 recipients of wire transfers.

In India, nearly 19% of total remittances in the country go to the southern state of Kerala. Tens of thousands from the state work in various Gulf states and send money home. The tourism-dependent local economy has been hard hit by the 21-day lockdown across India and families who rely on remittance money are increasingly concerned.

Last month, Sajeela Mol, a 36-year-old housewife in the Mallapuram district of Kerala, received no money from her husband Shabeer Ali, who works in a fast food restaurant in Jeddah, Saudi Arabia. Mol lives with her four school-age children and a sick mother-in-law. The family depends on the $ 150 that her husband sends each month.

With the restaurant closed due to the lockdown, Mol said her husband was not sure he would get his salary.

“If my husband doesn’t have money, I don’t know what he’ll send his family home,” said Mol.

Information on this article was contributed by Mohamed Sheikh Nor and Subramoney Iyer of The Associated Press.

Women wearing face masks stand a safe distance to contain the spread of the coronavirus as they wait in front of a school in the largely indigenous village of Xesuj, Guatemala for food to be given to their children USA (AP Photo / Moises Castillo)

Sunday Monday business on April 12th, 2020

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