COVID-19: consequences for international migration and development

By Jason Gagnon, Development economist, OECD Development Centre

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

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While the COVID-19 pandemic is not a migration issue, it is being viewed and managed as one. Fear-exploiting rhetoric around the crisis could provide the political space to push structural anti-migration policies through. This would be detrimental to the rights and health of migrants, and the positive impact migrants have on development – in 2017, an estimated 258 million international migrants filled labour shortages and contributed to transferring much needed skills, goods and services around the globe.

We have made remarkable strides to strengthen migration governance but if migrants’ rights are not protected in the short and long-term response to the COVID-19 crisis, progress could unravel, putting migrants and their families, as well as some of the foundations of our global economy at risk.


Minimising the short-term effects of the Covid-19 crisis on migrants

The immediate effect of an economic downturn will be quickly felt by migrants and their households, as many have irregular migrant statuses or work informally, making them easily dismissible – which is the case of the majority of migrants in developing countries. Moreover, refugee camps are some of the most densely populated places in the world and residents may not be able to leave, choose where to go or socially distance themselves. In some refugee camps in Cox’s Bazaar, Bangladesh for instance, population density is about 5 to 10 square metres per person.

Border closures will demonstrate how dependent we are on the mobility of labour. While all eyes are on high income and OECD countries and on how labour shortages could threaten food supply, an abrupt stoppage to international migration will also affect food security in developing countries where the agricultural sectors are heavily reliant on seasonal labour. How will countries like Thailand (from Cambodia), Côte d’Ivoire (from Burkina Faso) and Costa Rica (from Nicaragua) cope with constrained labour supplies, if borders remain closed?

Immediate effects will also be felt by migrants’ families in their countries of origin. Remittances are a major source of income and foreign exchange in developing economies, having steadily risen since 1990 from USD 64 billion to 683 billion in 2018 – most (77%) of it going to developing nations. In 2019, remittances were estimated to consist of at least 10% of GDP in 28 countries. As an insurance mechanism for households, remittances tend to increase in times of crises – or at least prove more resilient than other flows; private flows tend to decrease and official development assistance (ODA) becomes more difficult to administer. This was the case during the 2008-2009 crisis. But previous crises were less severe and global than this one.

Migrants already living in rich countries or who were planning for upcoming deployment may be hit the hardest by the economic crisis. Already, several money transfer operators are working reduced hours and with limited local currency. This may cut off a vital lifeline for many households, who may need to rely on remittance when the pandemic cuts off other sources of income. For many migrants who do not have a bank account, this is their only way to send money. On the other hand, major remittance sending countries, like the US and Eurozone countries, have seen their currencies appreciate since the outbreak spread outside of China – this alone may be triggering a rise in remittances to developing economies in the short-term.

Leveraging the crisis to address the unfinished business of international co-operation on migration

International migration will likely remain constrained, due to fear of retransmission of the virus, lack of transport options, xenophobia and political reasons. But in today’s global economy, heavily reliant on the mobility of skills, especially those that are hard to find, what will the consequences of a reduced (domestic) labour market be?

The crisis fallout will also impact refugee resettlement, which was already significantly reduced. Will countries reduce resettlement even more, or will there be shortages of labour in potential hosting countries that will help swing resettlement back up? And if it is reduced, how will the international community respond to financial needs in camps? This also shifts the burden-sharing squarely back on developing nations, where 84% of refugees are located.

As the crisis wears on, the challenge for the international community will be to advocate more strongly for financial resources to help deal with the financial and social fallout of the crisis. One low-hanging fruit will be diaspora groups, who are often knowledgable and sympathetic to the needs and development of their home countries. The use of diaspora bonds during and following the COVID-19 fallout maybe a sensible way to go. Another policy entry point will be the use of communication tools, to continue sensitising the public on the positive aspects of migration, and combat fake news, readily available and unjustifyably associating the spread of the COVID-19 crisis with international migration.

The international community should also fulful comittments to reduce the costs associated with sending remittances, and equip households with financial literacy and business tools for better remittance management. A remittance community task force set up by the International Fund for Agricultural Development, is specifically addressing these challenges in relation to the COVID-19 crisis. This is also the time to boost support for better co-operation on mobile transfers.

The crisis will hopefully bring to light the cost of poor socio-economic integration of migrants, including refugees in their host countries. First, good integration minimises the emergence and spread of epidemics and diseases outbreaks. Cities should plan for adequate integration infrastructure, and ensure that migrants have access to adequate healthcare and social security services. Second, proper migrant integration offers an easier path to providing healthcare to some of the most vulnerable people, often hard to reach. This is particularly true in developing countries, where integration is not necessarily on the radar or a policy focus, yet where migration dynamics are fluid. Migration between developing countries is high – in some sub-regions of Africa nearly 80% of all migrants come from other nearby countries.

The COVID-19 crisis may also be the impetus needed for governments to create opportunities for migrants to use their skills and for countries to create conditions for their skills, certificates and diplomas to be recognised. The crisis should be leveraged to address the unfinished business of international co-operation on human mobility.