Remittances and personal transfers are very important for the Republic of Moldova because they represent about 17% of the GDP. The lack of these can lead to the impoverishment of the families that are dependent on remittances. The politicians and regulatory authorities are encouraged to facilitate the transmission and receipt of remittances. The subject was discussed within a working group coordinated by the United Nations Development Program (UNDP), IPN reports.
National Bank vice governor Cristina Harea said the personal remittances in 2019 constituted US$1.3 billion. The personal transfers reach Moldova through international money transfer systems, classical bank transfer system and through bilateral systems between countries. In 2020, remittances declined by about 12% in March and April, but they grew by about 25% in May. The rise is probably due to the change of the transmission channels. Earlier, a part of the money was sent through units of transport. When transport was suspended, the persons turned to electronic transfers. Remittances from Russia decreased by about 26% compared with the corresponding period last year. Remittances from Germany, Italy, France, Turkey, and Ukraine also declined.
Hanspeter Wyss, of the Global Program Migration and Development of the Swiss Agency for Development and Cooperation, said that measures to attenuate the negative impact of the decline in remittances should be taken. Switzerland encourages the political, regulatory factors and not only to improve the access of migrants to physical and digital remittance services. The regulators are encouraged to come with guidelines for remittance service providers, to facilitate access to liquidity and to renew licenses. The facilitation of the permission and transmission of remittances will help millions of people in the world to benefit from remittances and to avoid poverty. “The maintaining of the flow of remittances is vital for the low-income countries, such as Moldova,” stated Hanspeter Wyss.
Chris Perkins, head of the Programs Section of the British Embassy in Chisinau, said that about one fourth of households in Moldova receive remittances and for half of them these are the only income. These households will fall into poverty if remittances disappear. The dependence on remittances has existed since 2009 and the dependence level has varied. Those from rural areas depend more on remittances.
IOM Chief of Mission to Moldova Lars Lönnback said it is vital to keep the flow of remittances, especially for such a country as the Republic of Moldova. Diaspora can be followed through remittances. According to an IOM study conducted among Moldova’s diaspora, about 80% of the respondents said the possibilities of sending money home decreased. 40% said they send by 70% less money home. “For Moldova’s economy, this is a rather harsh blow when remittances represent about 17% of the GDP,” he stated.
World Bank Country Manager for Moldova Anna Akhalkatsi said the decline in remittances will significantly affect individual households. The WB considers over 71 million people worldwide will fall into extreme poverty. In Moldova, there is also the problem of salaries that were affected by the pandemic. The people either do not get salaries or get lower salaries. Salary reductions can lead to the expansion of poverty. As regards remittances, they should be used productively and should not have a survival effect only, but should help Moldova grow its economy.
On June 16, Switzerland, the UK, the World Bank, IOM, UNDP and UNICEF called on the Moldovan authorities to take measures to continue to ensure the Moldovan population’s access to remittances.
