BVI's remittance sector is expeced to take a hit as the latest estimates published in the World Bank's Migration & Development Brief show that global remittances will decline by 14% by 2021 compared to the pre-covid-19 levels in 2019.
As the government struggles to keep its COVID-battered income streams flowing, this prediction is not in the BVI's favour — a major migrant-hosting territory where expats make up some 70% of its workforce.
Remittance had started to bring in a profit for the jurisdiction this year when the government imposed a seven percent tax on all monies leaving the BVI through money transfer agencies.
The underlying fundamentals driving remittances are weak"
At that time, premier Andrew Fahie confirmed that the government was projected to collect more than $1.7m from local money transfers by the end of this year. However, many expats have now returned to their home countries because businesses in the BVI have been struggling to remain profitable amid the pandemic.
The World Bank says remittance flows to low- and middle-income countries are projected to fall by seven percent to $508 billion in 2020, followed by a further decline of 7.5% to $470bn in 2021.
"Migrants are suffering greater health risks and unemployment during this crisis," said Dilip Ratha, lead author of the World Bank's Migration and Development Brief.
"The underlying fundamentals driving remittances are weak and this is not the time to take our eyes off the downside risks to the remittance lifelines," Ratha added.