Unravelling the COVID-19 Remittances Puzzle
This paper will first re-examine the importance of remittances to developing countries and will also look at the impact of the COVID-19 pandemic on remittances flows in 2020, both across the Commonwealth and beyond. It reviews cases in which countries have recorded unexpected increases to or stable remittances flows. These phenomena warrant further investigation for two main reasons: first, remittances support macroeconomic fundamentals in several developing countries, reflected as a high proportion of gross domestic product (GDP); and, second, vital lessons can be learned from those countries that have been able to sustain remittances flows during the COVID-19 pandemic. Finally, the paper outlines some policies that developing countries can adopt to help maintain the flow of remittances in the wake of a crisis.
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