Since the beginning of the novel coronavirus pandemic in 2019, global remittances have decreased dramatically. Due to less travel, fewer opportunities for work, and international budgetary shortages, fewer people are sending money overseas. For the first time since the pandemic began, there is now hope that it will end as various companies develop promising COVID-19 vaccines.
As a business owner, you’re curious how these vaccines will affect the economy. Thankfully, once people receive the vaccine and increase their travel, global remittances should increase due to these factors.
Availability of Global Online Spending
The infrastructure that allows you to quickly send money online has not vanished since the pandemic again. You can send funds to Nigeria or any other country that participates in electronic money-sharing systems.
Thanks to the hundreds of banks globally that accept funds through remote transfers, you can support developing economies by purchasing their products without actually visiting their brick-and-mortar stores. If your budget has become freer thanks to the vaccine, consider increasing your overseas spending now to help start the post-pandemic economic recovery.
Return of Migrant Workers
Although businesses such as yours are responsible for many global remittances, a large percentage of international money transfers are initiated by migrant workers for personal reasons. People who travel to different countries for work opportunities often send home money for medical expenses, rent, and food.
Due to safety concerns and travel restrictions, most migrant workers have been unable to leave their home countries or to work in the country where they are currently residing. As a result, fewer global remittances take place.
The following industries rely on migrant workers’ labor:
- Service work in private homes
- Textile manufacturing
While exact statistics on migrant workers are difficult to track, once these industries’ production returns to normal levels, global remittances from migrant workers should also have increased. However, if people receive fewer wages due to their employers’ shrunken budgets, they will have less money to send home. Additionally, depending on the availability of COVID-19 vaccines in other countries, it may be much longer before migrant workers can safely return to work.
Most people have stopped traveling for personal and business reasons since the pandemic began. Once a vaccine allows people to travel without contracting or spreading the virus, international travel will go up. At the same time, global remittances should increase. People who are traveling internationally for vacation send money overseas for the following reasons before leaving:
- Purchasing plane tickets from a foreign airline
- Securing a hotel room or another form of lodging
- Hiring tour guides
- Buying tickets for concerts and other forms of entertainment
Even people who don’t plan their overseas vacations well usually contribute a little to global remittances before their trips begin.
As for traveling for business reasons, work trips allow you to make new business relationships abroad. In addition to sending money to your destination for lodging and transportation, you’re likely to develop a lasting partnership with your contacts. After you return, you’ll have to send or receive money for each other’s services. Since the mail isn’t a reliable or safe way to send money, you’ll both rely on electronic monetary transfers, participating in and helping each other’s economies.
Vaccines for COVID-19 are still being developed, but the early trials suggest that once enough people receive shots, the pandemic will end. As a business owner who participates in the global market, you should watch carefully for these signs that global remittances are increasing. Do your part to help small businesses in your country and abroad so that all markets can recover from these turbulent times.
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