Kavita Datta (School of Geography, Queen Mary University of London) and
Vincent Guermond (Department of Geography, Royal Holloway University of London)
Global remittances are predicted to decline by around 20% due to the Covid-19 pandemic, constituting the sharpest contraction in recent history, including the 2008 financial crisis (World Bank 2020). For low- and middle-income countries, this will potentially represent a reduction from US$550 billion in 2019 to US$445 billion in 2020. Geographically varied, remittance volumes are already shrinking in heavily remittance-dependent countries like Somalia (Majid et al. 2020; World Bank 2020). In other countries such as Mexico, while remittances have proved remarkably strong – even reaching a record high in early 2020, despite earlier predictions of decline – long term prospects are uncertain (Smyth 2020). At best, these cross-border data paint a partial picture failing to account for informal remittance flows as well as domestic remittances despite the continued significance of internal migration, estimated at 740 million migrants in 2017, with particular concentrations in India and China (IOM 2017).
Constituted predominantly of small sums of money remitted to 800 million receivers living in rural and urban neighbourhoods in developing countries, these downward trends in remittances will undoubtedly intensify the economic crisis that is unfolding alongside the pandemic. With the IMF (2020) predicting a 3% contraction in the global economy, the pace and timeline for the recovery of remittances is uncertain. Furthermore, given that the majority of remittances continue to be spent on everyday subsistence needs, concerns about food insecurity, education and health, alongside macroeconomic recovery, are prevalent.
In this Intervention we reflect on the economic, social and digital realities that these trends mask. Recognizing that remittances are often presented as abstract “free” resources that are detached from the realities of an international migration regime that creates and perpetuates indebtedness, sacrifice, separation, racism, xenophobia, exploitation and inequality, hyper-precariousness, imprisonment and even loss of life (Hernandez and Coutin 2006), we make three key arguments. We propose that there is an urgent need to reconnect remittances to migrant labour, to recognise the intermeshing of production and reproduction, and to acknowledge the limits to the digitisation of everyday life.
Reimagining Key Workers? Migrant Labour During Times of Crisis
“Some people will die of the virus. The rest of us will die of hunger.” (Jamkhandikar and Waydande 2020)
While long predating the pandemic, profound labour market inequalities have been laid bare in recent weeks as governments across the globe have sought to balance what has curiously been framed as competing demands of saving “the economy” versus saving lives. Palat (2020) observes the emergence of a three-tier system of privilege, whereby the super-rich have retreated to second homes in the mountains and on the seaside; the middle classes are expected to work from home and care for children; while the working classes are compelled to continue to labour in fields, stores, transportation and other key services, choosing essentially between “life and livelihoods” (Samaddar 2020: 12).
The nexus of financialized neoliberalism and a politics of closure as evidenced by restrictive immigration regimes and discriminatory welfare policies have determined where significant numbers of migrant workers fit into this schema. A “migrant division of labour” as noted by Wills et al. (2010) in the global city of London – whereby migrants dominate in low paid, and so-called “unskilled” or “semi-skilled”, work where precarious, abusive and unsafe employment arrangements are endemic – is prevalent in richer economies. Migrants are also more likely to be self-employed partly due to barriers to labour market entry. In turn, migrant livelihoods are extremely precarious in low- and middle-income economies, often located within the informal economy with constant battles to maximize income while minimizing consumption (see below).
The global picture is one of significant disconnect between the variegated realities of migrant workers, and the policies put forward to tackle the economic, health and labour crisis. Precarious employment and/or legal status mean that migrant workers have been confronted by three stark options, all of which have adverse implications on their ability to remit (Schling et al. 2020). These are to continue to work at risk of exposure, forced incarceration in overcrowded worker dormitories, and/or an unsafe return “home”. The coronavirus has revealed migrants as key workers from celebrated doctors and nurses to the less visible women and men working in food delivery, agriculture, construction, social care, cleaning and domestic help. Instead of viewing them as heroic front-line responders, and falling into the trope of “good” versus “bad” migrants, it is important to recognise that many of these workers have no choice but to labour (see also Penny 2020). With few exceptions, recourse to public funds is specifically restricted as a condition of migrant visas such that access to host government interventions is uneven. Even more significantly, in these “close-contact” professions, migrant status interplays with gender, race and class to produce very different life and death outcomes (ONS 2020).
Covid-19 has also rendered the human body a biomedical site, bereft of social and political life. Reflecting the extent to which “race, class and caste operate at the fault lines of disease management landscapes” (Samaddar 2020: 11), while the initial spread of Covid-19 was attributed to elite mobility, and in an ironic reversal in some instances from the global North to the global South, it has since been associated with poor migrants. Labelled as “diseased”, they face forcible incarceration so as to halt the spread of the disease, being held, for example, in overcrowded worker dormitories in Singapore (Ratcliffe 2020). Similarly, “illegal” migrants have been rounded up in Malaysia despite warnings from the UN that this will facilitate the spread of the virus (Reuters 2020). Attendant wage declines and job losses are adversely impacting upon remittance sending.
Returning home has reversed the dynamic between “productive” migrants and “dependent” recipients. The Indian lock down, implemented with a mere four hours notification, set in motion hundreds of thousands of daily wage earners desperate to return home in the face of no work and no food (Sinha 2020). Given the predominant practice of remitting a large proportion of meagre wages to rural families (estimated at US$7.5 billion in 2007/08), these workers had no or limited savings to fall back upon (Deshingkar 2020). The decision to return home also reflected pre-Covid-19 iterative seasonal circular mobility between villages and towns. Yet, what is distinct in the current moment is that instead of being welcomed as “remittance heroes”, returnees are disciplined, sanitized and treated with hostility (Jha and Pankaj 2020). This applies equally to international and domestic migrants with fears of contagion resulting in few countries rushing to repatriate these citizens back home.
Intermeshed Spheres of Production and Reproduction
Remittances reflect vital transnational connections between production and reproduction, constituting a significant safety net for millions of remittance recipient households. For them, the projected 20% drop in global remittances will exacerbate the struggle for social reproduction – defined as the “activities and institutions that are required for making life, maintaining life and generationally replacing life” (Bhattacharya 2020) – they have long faced (Federici 2020). For example, in the Horn of Africa, where 40% of households are heavily dependent upon remittances, disruptions to resources sent by the Somali diaspora will heighten food insecurity (Majid et al. 2020). Furthermore, remittances do not only support immediate household members but are also re/distributed amongst extended family and friends, while underpinning local economies through payments to shopkeepers and construction workers (Guermond 2019). As such, changes in the sphere of production (for example, decreases in wages and job losses), can, via contractions in domestic and transnational remittances, significantly impact the sphere of reproduction (Bhattacharya 2013; Gunaratman 2020).
Yet, solely focusing on the contribution of migrants’ remittances to the social reproduction of remittance households in the global South is problematic. It suggests, as often implied by proponents of the “remittances-to-development” agenda (Bakker 2015), that those who stay behind, and women in particular, only “spend” remittances. This contributes to further invisibilising household labour involved in social reproduction. It also runs the risk of ultimately differentially valuing self-employed, insecure, non-waged but income-generating activities that are conducted by so many remittance recipients in what Sanyal (2007) calls the “need economy”. A fixation on the wage relation – and an understanding of the household as always in service to the waged (market) economy – overlooks significant and valuable human activity often performed by women and “non migrants”. This includes subsistence work, income-generating activities, as well as activities that add to the well-being of other household members (Bhattacharyya 2018). In turn, while migrants are sometimes depicted as “working for others”, remittance sending functions as a safety net for them too, strengthening social relations and facilitating place-making for future return.
As such, a social reproduction lens helps us understand how members of remittance receiving households secure their own present and future means of life as well as that of migrants through unwaged, income-generating activities, reproductive work and emotional labour here, with the support of the outcomes of often precarious, hyper-exploitative waged work there. Indeed, as remittances decline, recipients are, more than ever, increasingly responsible for all these “life-making activities” (Bhattacharya 2020). However, as agricultural workers, street vendors or petty traders, many remittance recipients involved in the need economy face the same impossible dilemma as migrant workers: to stop working and lose their livelihoods, or face the risk of contagion. In fact, as argued in a recent ILO (2020) report, the pandemic and lockdown measures are likely to “worsen poverty and vulnerabilities among the world’s two billion informal economy workers”.
While wage remittances play an essential role in the production and reproduction of life within and beyond remittance households, it is also necessary to shed light on the work and labour of remittance recipients that are an equally important, although largely unacknowledged, part in this process. For them, the current pandemic has created a double burden, through the contraction in global and domestic remittances, and the increasing risks of continuing to work.
Times of crisis are recognised as opportune moments for accelerating societal and economic transformation (Klein 2007, 2020). Covid-19 has aided the digitisation and automation of the everyday, from working from home to staying in touch with loved ones, to tracking and tracing the virus. Digital remittance services, which have grown significantly over the previous two decades, have been promoted during the pandemic for two inter-related reasons. These are, first, the difficulty of physically accessing remittance service providers that have themselves been affected by lockdown and social distancing measures resulting in reduced working hours, fewer agents and long queues, and, second, (unfounded) fears that “dirty” cash might aid the transmission of the coronavirus (Garcia Mora and Rutkowsi 2020; Gardner 2020; Mader 2020). Access difficulties at the other end of the remittance payment process – the “last mile” – have led to similar advice to send remittances to bank accounts, mobile money wallets or as airtime as opposed to cash pay-outs (World Remit 2020). The World Bank (2020) has noted a relative increase in the use of digital remittance services in recent weeks.
Broader debates on the relative advantages and disadvantages of digital versus “bricks and mortar” remittance service providers predate Covid-19. Given that the latter often offer digital services as part of their suite of remittance services, the point of contention is actually between digital versus cash payments. Proponents, including large telecommunications companies and fintechs, argue that digital payments are cleaner, faster and, crucially, cheaper. The latter claim is especially significant in that it furthers a global ambition – as articulated by the Sustainable Development Goals (SDGs) – to reduce remittance transaction costs, which remain stubbornly high in some of the poorer remittance corridors (World Bank 2020). Any such reduction – particularly at times of “crisis” – is welcome as it potentially means more money in the pockets of migrants and remittance recipients. Transnationally trackable digital payments also address (largely unfounded) concerns about cash intensive businesses related to criminality ranging from money laundering to terrorist financing (De Goede 2018). In turn, where digital payments can be linked to banking systems, this shift from cash to digital furthers the financial inclusion development agenda (Datta 2016; Guermond 2019). In combination then, these priorities seek to reduce cash remittances in favour of digital payments.
Critics point out that the shift from physical to digital remittance services has not been as seamless and unproblematic as suggested, highlighting the limits of digitisation. For a start, a persistent (and often gendered) digital divide, especially evident at the end of the remittance mile, but also among poor and undocumented migrants, undermines the efficacy of these measures (Datta and Vicol 2019; World Bank 2020). Literacy rates, convenience and habit further limit the use of digital payments services (Mader 2020). In turn, the World Bank (2020) reports that staff shortages attributable to the pandemic have slowed down digital payments as providers have struggled to keep up with due diligence requirements. Far from weaning people off cash, Covid-19 has, in fact, led to the hoarding of cash in some instances as concerns about access have led to a run on money transfer businesses (Majid et al. 2020). Irrespective of whether transactions are conducted digitally or in cash in high street businesses, the cost of sending remittances is likely to rise due to volatility in foreign exchange markets (Garcia Mora and Rutkowski 2020). These Covid-19 specific issues sit alongside longer-standing concerns about who stands to profit from the digitisation of remittances given the entry of large private payment institutions in the remittance marketplace in recent years (Datta and Vicol 2019). Amongst migrants living in hostile environments, concerns about the surveillance of digital financial flows as well as data mining shape the use – or lack thereof – digital payment systems (Datta 2019).
Tentative responses to counter the adverse impacts of the pandemic on remittance sending are emerging, designed to tackle both short- and medium-term challenges (World Bank 2020). While the latter entail a range of (familiar) ambitious measures which entail regulatory reform, addressing digital infrastructure barriers and compliance concerns, shorter term measures aim to “keep remittances moving”. A key recommendation is for public authorities to support the remittance industry with appropriate instruments to meet their credit and liquidity risks (ibid.). Further, even while digital services are being championed, there is recognition that a plurality of services need to be supported (Mader 2020). Thus, it is recommended that “bricks and mortar” remittance service providers are classified as essential services, meaning that they are exempt from shutting down if they enforce social distancing measures (Garcia Mora and Rutkowsi 2020). Yet, the fact that this industry – and especially small and niche cash intensive remittance service providers – has experienced significant “de-risking” (closure of bank accounts) on the grounds that they are “high risk and low value”, the avenues open to migrants to send money home have been contracting for some time (Datta and Vicol 2019).
Declines in remittances will be a crucial vector through which the economic crisis accompanying Covid-19 will be transmitted from richer to poorer nations, and from urban to rural areas. As we have argued here, these contractions reflect worsening labour market conditions for migrant workers who are increasingly faced with stark “choices” during the current pandemic. Deeply embedded in social relations, shrinking remittances also mean that the burden on close family members in recipient households is escalating, giving rise to fears of growing food insecurity, higher levels of household debt and impoverishment. The imperative to “keep remittances moving” as a key response to the global economic downturn caused by the coronavirus has been taken up by key international players. Yet, despite some practicable suggestions in the short term, the majority of these are initiatives which have failed to gain much traction over a period of time. Ultimately, of course, remittance flows are highly dependent on whether migrants have the wherewithal to remit in the first place.
Migration scholars, activists and practitioners are increasingly calling for an end to the hostile environment which has wreaked havoc for migrant workers including curtailing access to health care (Goodfellow 2020). In this context, a key intervention for richer nations must be to adopt inclusive economic policies which protect the life and livelihoods of migrants, and have the added benefit of reducing the socio-economic impacts of the pandemic, as their jobs are linked to the survival of millions of others. If remittances are accepted as beneficial not only for migrants and their families, but also the global economy, then restrictions on mobility need to be addressed, and narratives whereby migrant/labour is a disposable commodity challenged.
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