New Oxford Economics Report
DENVER--(BUSINESS WIRE)-- Person-to-person ("P2P") international transfers, or remittances, sent by global citizens to their homelands represent the largest foreign economic support structure for developing economies. According to a new report by Oxford Economics, commissioned by Western Union (NYSE: WU), a global leader in cross-border, cross-currency money movement, remittances have helped smooth COVID-19 pandemic-induced economic shocks, increasing the resilience of developing nations throughout 2020 and presenting a potential lifeline for recovery in 2021 and beyond.
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The Remittance Effect: Global Citizens Emerge as Economic First Responders of the Developing World (Graphic: Business Wire)
The Oxford Economics Report: The Remittance Effect: A Lifeline for Developing Economies Through the Pandemic and Into Recoveryidentifies several positive economic and remittance consumer fundamentals that could support unexpected strength in remittance flows to developing nations compared to World Bank forecasts of slowdown in 2021.
The report states that global P2P transfers to developing nations, which surpassed the value of Foreign Direct Investment in 2019, can potentially achieve what overseas development aid (ODA) and private direct investment cannot - the P2P transfers quickly and efficiently put money directly into the hands of individuals who then use the money to fund a broad range of economic activities. This "Remittance Effect" drives profound gains for developing economies, including reducing poverty and driving increases in economic activity. In addition to being engines for growth, P2P transfers enhance connectivity by linking individuals worldwide, thereby contributing to economic, social, and political interdependence between nations, even as governments shut borders.
"The research further shines a light on the resilience of this global web of financial interconnectivity and confirms what Western Union has witnessed repeatedly: Crises make people more determined to provide support to the people they care about. When times get hard in developing economies, remittance-senders become front-line workers of economic security,"said Hikmet Ersek, President and CEO of Western Union.
"This report justifies bestowing a new title of 'Economic First Responders' upon these global citizens and local heroes. The love and money they send across the world's borders have helped smooth the economic shocks from the pandemic and foster resiliency and recovery within their home nations throughout 2020 and into 2021 and beyond," he added.
The World Bank estimates that the pandemic will push an additional 88-115 million people into extreme poverty, with the total potentially rising to as many as 150 million in 2021. The developing world, home to many of the world's most economically vulnerable people, will face the most extreme consequences.
To avoid the economic divide, Western Union is encouraging policymakers across the spectrum to prioritize legal, smart, safe, and equitable cross-border migration systems, which will uplift developing nations' economies and continue to support developed economies to recover and address human capital shortages.
Ersek added, "In the critical task of rebuilding developing nations in a post-pandemic world, millions of these Economic First Responders will continue to step up. These heroes deserve so much credit for the irreplaceable role they play in their host and home countries' economies. There has also simply never been a greater need for innovation and technology that provides the on-the-ground financial support flowing instantly across borders." Read blog.
For 170 years, Western Union has been focused on connecting individuals to their families and loved ones globally, anytime, anywhere, and today, it continues to connect them through one of the world's largest global financial networks that move 130 currencies electronically worldwide within minutes.
Oxford Economic report - Key Highlights
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About Western UnionThe Western Union Company (NYSE: WU) is a global leader in cross-border, cross-currency money movement and payments. The company's omnichannel platform connects the digital and physical worlds and makes it possible for consumers and businesses to send and receive money and make payments with speed, ease, and reliability. As of the end of September 2020, the Western Union network included over 550,000 retail agent locations offering branded services in more than 200 countries and territories, with the capability to send money to billions of accounts. Additionally, westernunion.com, the fastest-growing channel in 2019, is available in over 75 countries, plus additional territories, to move money worldwide. Western Union moves money for better with our global reach, connecting family, friends, and businesses to enable financial inclusion and support economic growth. For more information, visit www.westernunion.com.
About Oxford Economics Oxford is a leader in global forecasting and quantitative analysis. Our worldwide client base comprises more than 1,500 international corporations, financial institutions, government organizations, and universities.
Headquartered in Oxford, with offices around the world, we employ 400 staff, including 250 economists and analysts. Our best-in-class global economic and industry models and analytical tools give us an unmatched ability to forecast external market trends and assess their economic, social, and business impact. For more information visit www.oxfordeconomics.com/all-services.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210127005359/en/
For further information please contact: Western Union Global Communications: Pia De Lima; Pia.DeLima@wu.com Western Union EU&CIS: Nicholas Mandalas; Nicholas.mandalas@wu.com Western Union Middle East & Africa: Mohamed El Khalouki; Mohamed.ElKhalouki@wu.com Western Union Asia-Pacific: Karen Santos; Karen.Santos2@wu.com
Source: The Western Union Company