Abul Basar has been in Saudi Arabia for 14 years now. After failing to find suitable employment in Bangladesh, he tried his luck as a migrant worker in the oil-rich desert state to support his family in Bangladesh, first in Riyadh and then in Jeddah. More recently, he worked as a plumber at a sewage treatment plant in Al Qasim province. Then the coronavirus hit.
Abul Basar has a job in Al Qasim Province, Saudi Arabia
To date, Basar is one of approximately 260 million migrants worldwide whose labor contributes to a major redistribution of capital to low-income regions of the world. Ninety percent of what he earns – 2,000 Saudi riyals ($533, €498) a month – he sends her home to support his family of four.
More than half of all migrant workers come from South, East and Southeast Asia. They make up around 20% of the workforce in Western, Northern and Southern Europe — and the United States. In the Gulf States, it’s about 41%.
Europe, the United States and the Gulf States are particularly important destinations for migrant workers and the source of most remittances (dark blue on the map).
Remittances: the economic stabilizer
With their remittances, migrant workers do not just support their families. They also stabilize entire national economies. In Zimbabwe, Georgia, Nicaragua and Senegal, remittances represent more than 10% of the national economy. In El Salvador, Gambia, Jamaica and Nepal it is more than 20% and in Kyrgyzstan and Tajikistan. it’s about 30%.
North and sub-Saharan Africa, South and Southeast Asia and Central America particularly benefit from remittances.
With the onset of the COVID-19 pandemic, however, that model appeared to be in jeopardy. Closures and job losses threatened to stifle the steady flow of capital transfers. In April 2020, World Bank Experts estimated that migrants would send $129 billion less home in the first year of the pandemic, a drop of 20%.
In fact, payments recovered quickly after a brief, sharp drop. The currencies of major emerging economies such as Brazil, South Africa and Turkey depreciated sharply at the start of the pandemic, while remittances from dollar and euro economies increased in value. Many migrant workers have also dipped into their savings to support their families back home, despite losing their jobs.
“In general, I send around BDT 500,000 ($5,775; €5,450) a year to my family,” Abul Basar said.
But that changed during the pandemic. For the past two years, he has tried to send more money to his family.
“In 2021, my father was infected with COVID-19 and his treatment cost more than 100,000 BDT. By compromising my savings that year, I sent more than 600,000 BDT to my family to meet their expenses additional.”
The “job gap” with the local population
The pandemic has therefore resulted in a heavier financial burden and severe cuts for migrant workers. In particular seasonal and migrant workers, who are poorly protected by law, quickly lost their jobs. The unemployment rate has also increased among the local population in many countries. But migrant workers have been more affected by the layoffs. In some countries with many seasonal workers, such as Hungary, Spain and Italy, a migrant worker was 50% more likely to be unemployed than a local worker.
According to the International Labor Organization, an agency of the United Nations, the reason why migrant workers are more likely to be unemployed than the local population is that they often work in precarious and low-wage sectors. These include sectors particularly affected by the pandemic, such as catering, tourism, culture, retail and construction.
The true unemployment figures are probably even higher if we consider migrants who have left the country due to job losses and are therefore not counted in the statistics.
India alone had 6.1 million stranded workers who had to be repatriated on charter flights when the pandemic hit. Thailand, Nepal, Malaysia and Sri Lanka have also seen hundreds of thousands of people leave the country, many due to layoffs. The ILO says the situation in South America and Africa was similar. Migrant workers in the Gulf Arab states have been even more affected.
It is not known if these people will soon be able to return to the countries where they worked. While at the start of the pandemic virtually every country in the world closed its borders to prevent travel, migration policies have since varied: many countries in sub-Saharan Africa quickly lifted regulations, while others in Europe like Spain and Italy have tightened travel restrictions. after the increase in the number of COVID.
Vaccination rules have also made entry more difficult. The United States, the EU, South Korea, the United Arab Emirates and especially Saudi Arabia do not only require a proven vaccination against COVID-19. At least for a time, they rejected some Chinese-produced vaccines, deeming them insufficient. But these were frequently used in South and Southeast Asia.
The “Saudiization” of Saudi Arabia
The restrictive policy in the Gulf in particular could be due to the so-called Saudiization of the economy. Ongoing since 2018, the government initiative requires companies to “increase the proportion of Saudi nationals in their workforce”, with penalties for “companies with low percentages of Saudi workers and ‘surplus’ foreign workers. “said a statement. study from the human rights organization FairSquare Project describes. The Saudi health sector, for example, must meet an employment quota for locals of between 30% and 60%.
“Companies above the quota get benefits, while those below face restrictions on hiring expatriates,” said one. study by the Center for International Development at Harvard University.
Throughout the pandemic, discrimination against foreign workers has been further compounded by demonization in the media. Numerous reports alleged that migrant workers were driving up infection rates.
Labor migration out of Bangladesh, however, has only been affected in the short term by restrictions such as those in Saudi Arabia. The number of workers going abroad fell by more than two-thirds between 2019 and 2020, the Bangladesh Bureau of Manpower, Employment and Training documented. But since 2021, the number has increased sharply again.
Recent figures show that about 75% of Bangladeshi migrant workers left for Saudi Arabia
For three consecutive years, Bangladesh has broken the record for the highest remittances ever seen in its history. According to official estimates, workers sent back more than $22 billion in 2021.
According to Dr. Zahid Hussain, former chief economist of the Dhaka office of the World Bank, two particular factors explain the recent record of remittances in Bangladesh. First, migrant workers probably sent more funds through unofficial channels than through legal channels.
“Due to the complete disruption of unofficial channels during the pandemic, they were forced to choose the latter,” Hussain said.
Many have also transferred their savings to Bangladesh, fearing they will lose their jobs.
“Some may have returned home with all their savings because they didn’t have a job,” he said. “This may help boost remittances from the past two years.”
Edited by: Kristie Pladson