Growth & Jobs | Remittances assist families during the pandemic
FOR MANY Jamaicans, remittances from abroad during the COVID-19 pandemic have contributed to an essential part of their survival, because it has allowed them to meet their daily expenses.
“My salary was reduced by almost half last year, shortly after the pandemic began. And if it were not for the remittances from my brother in United States of America, I do not know how I would have managed. The funds assisted me to pay the bills and provide for my family,” explained Brian Richardson, a 38-year-old electrician.
“Currently, my salary has returned to the normal level; however, I am unable to do overtime, because my company is still not at the stage where they were prior to the pandemic. The remittances from my brother assist me in meet my other obligations,” he added.
Prior to the pandemic, a report from the Inter-American Development Bank (IDB) revealed that remittances have become the world’s largest poverty reduction programme for some 10 million families in Latin America and the Caribbean, who relied on funds from abroad to fend off poverty. In addition, the IDB stated that remittances helped households to maintain their consumption levels through economic shocks and adversity; and supports vital investments in education, health, and entrepreneurship.
The World Bank also reveals that since the start of the pandemic, global remittances for 2020 was about 1.9 per cent lower than the 2019 figures, with US$540 billion in transactions compared with US$548 billion the previous year. The multilateral agency stated that this figure was higher than earlier predictions of low remittance transactions. The report added that migrant workers cut their consumption patterns, reduced their savings, or benefited from unemployment programmes in their countries of residence in order to support families in their homeland.
Economist Kemmehi Lozer explained that remittances played an important role in the lives of many people. He added that prior to the pandemic, it took pressure off many social services and reduced the burden on the state. Lozer emphasised that this was even more important during the pandemic, with many persons either losing their jobs or having their incomes reduced.
“If it weren’t for remittances, many more persons would have fallen below the poverty line, due to loss of employment or reduction in hours. It meant that the various initiatives implemented by the Government to alleviate poverty would have to be widened, and that would have impacted our economy even more,” Lozer affirmed.
“The remittances during the pandemic formed a part of our social safety net, because most people use it to pay rent, utilities, purchase medication, food and other items needed for their daily survival. For some, it helps with purchasing devices and data plans to assist with online schooling,” he added.
Horace Hines, general manager, JN Money Services, owners and operators of the JN Money brand, added that figures from the Bank of Jamaica revealed an increase in remittances sent to Jamaica last year. Hines noted that many Jamaicans living overseas were employed in the essential services sectors, such as health and transportation, and remain employed. He said many navigated the challenges associated with lockdowns in the various countries to send remittances home. He added that others used online services to ensure that their loved ones in Jamaica were able to survive.
“Based on feedback received from our customers in our overseas markets, many found creative ways to ensure that their families back home were not left vulnerable to economic shocks, because their relatives needed to pay bills, purchase food or medication. Many found ways to stay safe while remaining connected to their loved ones and, therefore, used our online services; or used the time available when they could go out to do their transactions,” he stated.
“The determination and resilience of our people were reflected in the 2020 Bank of Jamaica’s figures, which revealed that Jamaicans abroad sent home approximately US$2.91 billion. This figure represented a 20 per cent increase over the January to December 2019 period, when remittance inflows totalled US$2.42 billion. That figure also represented some 21 per cent of our gross domestic product. These figures are important because they help our economy during these challenging time,” he added.
Whether remittances are used to buy food or cover medical expenses, its importance has not been lost on many, especially those employed in sectors which have been adversely affected by the pandemic.
“Since March last year, I have relied on remittances to help me with the shortfall in my income,” Marsha Campbell, a restaurant worker in Kingston, said. “I now work less hours; and if it were not for the remittances from my sister and her husband abroad, things would have been harder. I am able to pay my bills and purchase food, which would not have happened without funds from overseas.”