The two nations have called for greater global collaboration to declare money transfers as essential financial service
UK and Switzerland urge countries to make international remittances essential financial service. (Credit: Crown copyright.)
The UK and Switzerland have urged countries to work together to enable money transfers by people to their families in developing countries during the Covid-19 (coronavirus) pandemic.
The joint call highlights the urgent need for a continued access to money transfer services.
The two countries have also urged countries to declare money transfers as essential financial services and provide greater access to digital remittance services.
Besides, the UK and Switzerland are also encouraging remittance service providers to reduce costs and fees for people making such payments.
The call by the UK and Switzerland is supported by partners, including the World Bank, the UN Capital Development Fund, UN Development Programme and the International Organisation for Migration.
Many countries, including Ecuador, Egypt, El Salvador, Jamaica, Mexico, Nigeria and Pakistan, have already joined the collaboration.
Last year, money sent to developing countries amounted to $554bn
Remittances are considered as a vital lifeline in many developing countries, as they boost economic development and contribute to a reduction in poverty.
Last year, the money transfers made by individuals to their respective family and friends living in low and middle income countries totalled $554bn.
International Development Secretary Anne-Marie Trevelyan said: “The coronavirus pandemic means we are all concerned about how our family and friends here and overseas are coping. That’s why we’re making it easier for diaspora communities in the UK and other countries to continue to transfer money to their relatives.
“This will be lifesaving for some families in developing countries where coronavirus is making a lack of food and healthcare, and extreme poverty, even worse. We are helping to prevent fragile economies from facing potential collapse during the pandemic.”
The Covid-19 pandemic is already having an impact on migrant workers, as their wages have dropped and the restrictions due to coronavirus are also making it more difficult for people to access money transfer services.
The World Bank expects a drop of 20% in remittances to low and middle income countries this year, totalling $110bn.
The decline could seriously impact the countries where many people already facing destitution and even starvation, due to the huge economic impact of the pandemic.
In at least 60 developing countries, remittances account for more than 5% of their gross domestic product (GDP).
Swiss Federal Department of Foreign Affairs head Ignazio Cassis said: “Remittances are important, but difficult because of COVID-19. So let’s make sure those barriers are removed worldwide! New technologies can help us here.”