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Illustration: Aïda Amer/Axios

The coronavirus pandemic could cause remittance payments around the world to drop by 20%, the sharpest decline in history — threatening the livelihoods of the families who rely on them, the World Bank projects.

Why it matters: Families across the globe are depending on remittances more than ever as the coronavirus crisis batters local economies. Without them, millions will struggle to pay for basic needs, such as housing, health care and education.

Zoom in: Mexico was the third-largest recipient of remittances in 2018 and the largest recipient of money from the U.S., the New York Times writes.

  • Remittances account for just 3% of Mexico's GDP, but they are an "enormous boon to some of the country's poorest communities," the Washington Post writes.
  • In the state of Michoacán, remittances make up more than 11% of the local economy.
  • Nearly 1.65 million households across Mexico receive money from abroad, per the Post.
  • Mexican President Andrés Manuel López Obrador in April urged Mexicans abroad to continue to send remittance payments.
  • Zoom out: In the most remittance-dependent countries, like Nepal or Haiti, they account for roughly one-third of GDP.

The big picture: The United Nations says remittance payments are actually three times more important than international aid since the money goes directly into the hands of people who need it most.

The state of play: Remittances in 2019 totaled $554 billion, and the World Bank expects the number to drop to $445 billion in 2020.

  • Remittances as a share of a country’s GDP tend to be the largest in poor countries, small-island developing nations and those experiencing armed conflict.
  • And even in countries with a strong GDP, remittance payments can act as a lifeline for some of its poorer or more rural communities.

What they’re saying: The World Bank recommends countries develop long- and short-term plans to support families that rely on the payment by increasing access to health care, housing and education.

  • Governments should aid families who rely on remittances with cash payments to cover daily expenses as well as develop more secure ways to transfer remittance payments, the World Bank says.

The bottom line: Historically, remittance payments have dropped in a handful of countries at a time. “This time, however, the pandemic has affected all countries, and the economic fallout is likely to vary,” the World Bank writes.

Go deeper: Remittances are an invisible $500 billion aid juggernaut

Go deeper

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

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  2. Health: Lessons for trapping the next pandemic.
  3. Tech: "Fludemic" model accurately maps COVID hotspotsVirtual doctor's visits and digital health tools take off.
  4. Politics: Harris breaks tie as Senate proceeds with lengthy debate on COVID relief bill — Republican governor of West Virginia says there's no plan to lift mask mandate.
  5. World: Canada vaccine panel recommends 4 months between doses — In AstraZeneca spat, EU fights hard for a vaccine its hardly using.
Dave Lawler, author of World
2 hours ago - World

In AstraZeneca spat, EU fights hard for a vaccine it's hardly using

Macron, Merkel and European Council President Charles Michel (R) at a summit in October. Photo: Yves Herman/Pool/AFP via Getty

Italy on Thursday blocked the export of 250,000 AstraZeneca doses to Australia, becoming the first EU country to exercise an export ban due to a vaccine shortfall in the bloc.

Why it matters: The controversial step exposes multiple major challenges to distributing vaccines — even among the world’s richest countries.

Dave Lawler, author of World
2 hours ago - World

Global freedom continues steady decline: report

The global erosion of democracy has continued for a 15th consecutive year, according to an annual report from Freedom House.

Zoom in: The report calls particular attention to India, which slipped from “free” to “partly free” due to the government's “scapegoating of Muslims” and “crackdown on critics.” Prime Minister Narendra Modi is, according to the report, “driving India itself toward authoritarianism.”