Neither by Land Nor by Sea: The Rise of Electronic Remittances during COVID-19

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Adding Insult to Injury: The COVID‐19 Crisis Strikes Latin America

“…Remittances did not decline substantially and actually grew in 2020 in many Latin American countries (CEPAL, 2022a: 147). See also Dinarte et al (2021). similar policies in mostly the same sequence at mostly the same timethe two middle weeks of March 2020' .…”

“…16 For Latin America, this trade surge manifested in a 17 per cent increase in export prices and an 8 per cent increase in volume, translating into an overall 25 per cent gain in export value in 2021 (CEPAL, 2022a). Remittances, which contribute significantly to the GDP of Central America, soared by 30 per cent in 2021 (after a somewhat surprising growth of 8 per cent in 2020, probably due, as Dinarte et al, 2021 argue, to a shift in remittances from informal channels to formal, registered ones). The region grew (or more properly, recovered) in 2021 by an average of 6 per cent: South America, Central America and Mexico expanded between 6 and 6.5 per cent, while the Caribbean (excluding the exception that is Guyana) grew by only 1 per cent.…”

Migración y remesas en 2020 en Centroamérica, Haití, México, Panamá y República Dominicana: Impacto del Covid-19, de los huracanes y expectativas a mediano plazo

“…En efecto, las limitaciones de movilidad que impedían a los viajeros llevar efectivo a través de las fronteras habría impulsado el uso de transferencias electrónicas para enviar remesas. Dinarte (2021) encontró que el aumento de las remesas formales entre México y Estados Unidos en 2020 fue impulsado parcialmente por los municipios más cercanos a un cruce fronterizo. Al mismo tiempo, encontró un aumento importante y desproporcionado en el número de nuevas cuentas en las instituciones financieras entre los municipios cercanos a un cruce fronterizo desde la implementación de las medidas de confinamiento.…”

COVID-19 and remittances to Mexican states

“…This type of travel occurs more frequently with shorter distance to the border. Ongoing research shows that in the first months of the implementation of border closure mechanisms, remittances increased the most near the border (Dinarte, Jaume, Medina-Cortina and Winkler, 2021). Therefore, the increase in remittances recorded in formal channels could only be due to an informal channel replacement.…”