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COVID-19: Remittance Flows to Shrink 14% by 2021

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As the COVID-19 pandemic and economic crisis continues to spread, the amount of money migrant workers send home is projected to decline 14 percent by 2021 compared to the pre COVID-19 levels in 2019, according to the latest estimates published in the World Bank’s Migration and Development Brief.  

Remittance flows to low and middle-income countries (LMICs) are projected to fall by 7 percent, to $508 billion in 2020, followed by a further decline of 7.5 percent, to $470 billion in 2021. The foremost factors driving the decline in remittances include weak economic growth and employment levels in migrant-hosting countries, weak oil prices; and depreciation of the currencies of remittance-source countries against the US dollar.

The impact of COVID-19 is pervasive when viewed through a migration lens as it affects migrants and their families who rely on remittances,” said Mamta Murthi, Vice President for Human Development and Chair of the Migration Steering Group of the World Bank. “The World Bank will continue working with partners and countries to keep the remittance lifeline flowing, and to help sustain human capital development.”

The declines in 2020 and 2021 will affect all regions, with the steepest drop expected in Europe and Central Asia (by 16 percent and 8 percent, respectively), followed by East Asia and the Pacific (11 percent and 4 percent), the Middle East and North Africa (8 percent and 8 percent), Sub-Saharan Africa (9 percent and 6 percent), South Asia (4 percent and 11 percent), and Latin America and the Caribbean (0.2 percent and 8 percent).

The importance of remittances as a source of external financing for LMICs is expected to amplify in 2020, even with the expected decline. Remittance flows to LMICs touched a record high of $548 billion in 2019, larger than foreign direct investment flows ($534 billion) and overseas development assistance (about $166 billion). The gap between remittance flows and FDI is expected to widen further as FDI is expected to decline more sharply.

Migrants are suffering greater health risks and unemployment during this crisis,” said Dilip Ratha, lead author of the Brief and head of KNOMAD. “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.”

This year, for the first time in recent history, the stock of international migrants is likely to decline as new migration has slowed and return migration has increased. Return migration has been reported in all parts of the world following the lifting of national lockdowns which left many migrant workers stranded in host countries. Rising unemployment in the face of tighter visa restrictions on migrants and refugees is likely to result in a further increase in return migration.

“Beyond humanitarian considerations, there is a strong case to support migrants who work with host communities on the frontline in hospitals, labs, farms, and factories,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank. “Supportive policy responses by host countries should include migrants, while origin or transit countries should consider measures to support migrants returning home.

Origin countries must find ways of supporting returning migrants in resettling, finding jobs or opening businesses. The surge in return migration is likely to prove burdensome for the communities (to which migrants return) as they must provide quarantine facilities in the immediate term and support housing, jobs, and reintegration efforts in the medium term.

According to the World Bank’s Remittance Prices Worldwide Database, the global average cost of sending $200 was 6.8 percent in the third quarter of 2020, largely unchanged since the first quarter of 2019. This is more than double the Sustainable Development Goal target of 3 percent by 2030. The cost was the lowest in South Asia (5 percent) and highest in Sub-Saharan Africa (8.5 percent). Banks are the costliest channel for sending remittances, averaging 10.9 percent, followed by post offices at 8.6 percent, money transfer operators at 5.8 percent, and mobile operators at 2.8 percent.

Despite being the cheapest, money transfer and mobile operators face increasing hurdles as banks close their accounts to reduce risk of non-compliance with anti-money laundering (AML) and combating terrorism financing (CFT) standards. To keep these channels open, especially for lower-income migrants, AML/CFT rules could be temporarily simplified for small remittances. Further, strengthening mobile money regulations and identity systems will improve transparency of transactions. Facilitating digital remittances would require improving access to bank accounts for mobile remittance service providers as well as senders and recipients of remittances.

The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. It is supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. The WBG is making available up to $160 billion over a 15-month period ending June 2021 to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans and $12 billion for developing countries to finance the purchase and distribution of COVID-19 vaccines.

Regional Remittance Trends

Remittance flows to the East Asia and Pacific region are projected to fall by 11 percent in 2020 to $131 billion due to the adverse impact of COVID-19. China and the Philippines are the region’s top recipients, while as a share of GDP, the top recipients are Tonga and Samoa. Remittance costs: The average cost of sending $200 to the region increased slightly to 7.1 percent in the third quarter of 2020. The five lowest-cost corridors in the region averaged 2.5 percent, while the five highest-cost corridors, excluding South Africa to China, which is an outlier, averaged 13.3 percent.

Remittances to countries in Europe and Central Asia are estimated to fall by 16 percent to $48 billion as the pandemic and fall in oil prices are likely to have wide-ranging impacts on economies, with nearly all countries in the region posting double-digit declines of remittances in 2020. The depreciation of the Russian ruble is also likely to weaken outward remittances from Russia. Remittance costs: The average cost of sending $200 to the region fell slightly to 6.5 percent in the third quarter of 2020 from 6.6 percent a year ago.

Remittance flows into Latin America and the Caribbean are expected to be about $96 billion in 2020, a decline of 0.2 percent over the previous year. Remittances to Colombia, El Salvador, and the Dominican Republic registered positive year-on-year growth between the months of June and September after falling sharply in April and May. Flows to the region’s top recipient, Mexico, held up in part because migrants were employed in essential services in the United States and eligible migrants also benefitted from U.S. stimulus programs. Remittance costs:The average cost of sending $200 to the region rose slightly to 5.8 percent in the third quarter. In many smaller remittance corridors, costs continue to be high. For example, the cost of sending money to Haiti and the Dominican Republic exceeds 8 percent.

Remittances to the Middle East and North Africa region are projected to fall by 8 percent in 2020 to $55 billion due to the projected persistence of the global slowdown. Remittances inflows to Egypt, the region’s largest recipient, have so far been countercyclical to the crisis, as Egyptian workers abroad increase one-off transfers to their families back home. Flows are likely to eventually decline due to lower oil prices and slower economic growth in the Gulf countries, with major remittance-receiving countries likely to register falls in remittances. Remittance costs: The cost of sending $200 to the region rose in the third quarter of 2020 to 7.5 percent, compared with 6.8 percent a year ago. Costs vary greatly across corridors: the cost of sending money from high-income OECD countries to Lebanon continues to be in the double digits.

Remittances to South Asia are projected to decline by around 4 percent in 2020 to $135 billion. In Pakistan and Bangladesh, the impact of the global economic slowdown has been somewhat countered by the diversion of remittances from informal to formal channels due to the difficulty of carrying money by hand under travel restrictions. Pakistan also introduced a tax incentive whereby withholding tax was exempted from July 1, 2020, on cash withdrawals or on the issuance of banking instruments/transfers from a domestic bank account. Bangladesh registered a large increase in remittance inflows in July after the floods that inundated a quarter of its landmass. Remittance costs: At just under 5 percent in the third quarter of 2020, South Asia was the least costly region to send $200 to. But costs are well over 10 percent in some corridors (from Japan, South Africa and Thailand, and from Pakistan to Afghanistan).

Remittances to Sub-Saharan Africa are expected to decline by around 9 percent in 2020 to $44 billion. Within the region, remittances to Kenya have so far stayed positive, though flows are likely to eventually decline in 2021. All major remittance-receiving countries will likely see a decline of remittances. As the COVID-19 pandemic affects both destination and origin countries of Sub-Saharan migrants, the fall in remittances is expected to further lead to an increase in food insecurity and poverty. Remittance costs: Sending $200 remittances to the region cost on average 8.5 percent in the third quarter of 2020, representing a modest decrease compared with 9 percent a year ago. Sub-Saharan Africa is the costliest region to send remittances to. The promotion of digital technology, combined with a regulatory environment promoting competition in the remittances market and review of AML/CFT regulations, are essential to lowering remittances fees for the region.

Detailed regional and global analysis is available in the Migration and Development Brief 33 available on www.knomad.org and blogs.worldbank.org/peoplemove. Brief 33 highlights developments related to migration-related Sustainable Development Goal indicators for which the World Bank is a custodian: increasing the volume of remittances as a percentage of gross domestic product (17.3.2), reducing remittance costs (10.c.1), and reducing recruitment costs for migrant workers (10.7.1).

Finance

World Bank Supports Croatia’s Firms Hit by COVID-19 Pandemic

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photo: World Bank

Tamara Perko, President of the Management Board of the Croatian Bank for Reconstruction and Development (HBOR) and Elisabetta Capannelli, World Bank Country Manager for Croatia, signed a Loan Agreement for the HEAL Croatia Project (Helping Enterprises Access Liquidity) in the amount of EUR 200 million (US$242 million equivalent). The Croatian Deputy Prime Minister and Minister of Finance, Zdravko Marić also signed a Guarantee Agreement with the Bank for the Loan. The HEAL Croatia Project will provide liquidity and financial restructuring to firms that have been hit by the COVID-19 pandemic and by the two devastating earthquakes of 2020 and will support an inclusive and resilient recovery.  

The COVID-19 crisis has caused a sharp decline in the economic activity of Croatian businesses and has had a profound effect on jobs and livelihoods. The pandemic disrupted firms’ production and reduced the demand for their goods and services, while the financial sector tightened lending to companies, due to rising credit risk. The crisis also exacerbated Croatia’s regional disparities and reduced credit access for young firms and for firms owned and managed by women.

To mitigate such negative effects, the HEAL Project will increase access to finance to firms focused on export, both small and medium enterprises (firms employing fewer than 250 people) and mid-caps firms (employing from 250 to 3000 people), as well as for firms from less developed regions of Croatia, and firms owned or managed by women. It will also increase access for young enterprises (operating less than five years). The Project will support HBOR’s continued development through improved business processes, strengthened sustainability and climate change resilience, and use of EU funds.

“The loan being signed today represents a continuation of the significant support provided by the World Bank to the Republic of Croatia since the beginning of the crisis in 2020, which is reflected in operations worth a total of EUR 760 million (including HEAL). With this project, we are contributing to the further recovery of Croatia’s private sector, following the existing measures of the Government of the Republic of Croatia adopted in the context of the COVID-19 pandemic, post-earthquake reconstruction and creating foundations for future sustainability and resilience,” said Zdravko Marić, Deputy Prime Minister and Minister of Finance of the Republic of Croatia.

“Terms and conditions granted by the World Bank will provide us an additional source of finance for granting further favorable loans to our entrepreneurs. We are pleased that the World Bank has recognized the significance of financing entrepreneur groups whose importance has also been recognized in HBOR’s five-year strategy. Exporters and entrepreneurs in underdeveloped areas are among them. In addition to granting favorable financing terms, the World Bank will support us in improving our Environmental and Social Management System. This will be important as HBOR’s activities in the coming period will be particularly committed to building more capacity for supporting sustainable projects and inclusive growth,” stated Tamara Perko, President of the Management Board of HBOR.

“We look forward to a smooth and quick implementation of the HEAL Croatia project which will help preserve jobs and support household livelihoods through direct support to approximately 150 firms employing around 25,000 people. The Project will contribute to a resilient, inclusive and sustainable recovery of Croatia, which has been hard hit by the global pandemic, the economic recession, and the devastating earthquakes of March and December 2020,” said Elisabetta Capannelli, the World Bank Country Manager for Croatia.

The HEAL Croatia project complements two other World Bank crisis operations approved last year, the Croatia Crisis Response and Recovery Program and Earthquake Recovery and Public Health Preparedness Project – worth together US$ 500 million, to help mitigate the effects of the economic shock, advance recovery, facilitate earthquake reconstruction and strengthen national systems for public health preparedness for pandemic outbreaks. The Justice for Business Project focused on improving the business regulatory procedures and justice service standards for businesses and citizens was also approved in March 2020, bringing the World Bank support to the country to EUR 760 million under the ongoing Country Partnership Framework.

The World Bank has been a partner to Croatia for over 27 years. During this period, the Bank has supported more than 50 projects, worth almost US$5 billion, produced numerous studies, and provided technical assistance to help strengthen institutions and support the design of policies and strategies. The Bank’s current program focuses on mitigating the economic and social impact of COVID-19, post-earthquake reconstruction, transport, justice, innovation, business environment, land administration, science and technology, and economic development of the Pannonian region.

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Decentralized Finance heats up: new approaches needed for industry transformation

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Decentralized finance (DeFi) aims to transform traditional forms of finance by reconstructing and reimagining services. The World Economic Forum today released the Decentralized Finance (DeFi) Policy-Maker Toolkit, providing policy-makers and regulators with guidance for technologies that are global and transforming rapidly.

The toolkit is a collaboration with the Blockchain and Digital Asset Project at the Wharton School of the University of Pennsylvania. It draws on contributions from an international expert group of academics, legal practitioners, DeFi entrepreneurs, technologists, global policy-makers and regulators, and is the second report in the series, after DeFi Beyond the Hype.

DeFi has been evolving since the launch of the Ethereum blockchain in 2015 and is a category of financial services based on blockchain’s distributed ledger technology. It does not rely on central institutions, and interest has risen sharply from both private and public sectors.

The report notes that, in the past year, the value of digital assets locked in DeFi smart contracts grew by a factor of 18, from $670 million to $13 billion. The number of associated user wallets grew by a factor of 11, from 100,000 to 1.2 million, and the number of DeFi-related applications grew from eight to more than 200.

The first-of-its-kind toolkit provides a foundation for understanding the major factors that should drive policy-making decisions. It provides an overview of DeFi, explores and illustrates benefits and risks with case studies, and maps out legal and regulatory responses.

Representatives from governments around the world contributed to the creation of the toolkit, including those developing Europe’s Markets in Crypto-assets (MiCA) framework and major U.S. financial regulators. The government of Colombia is among those planning to use the toolkit in their policy-making and regulations.

“We are in a critical time for DeFi. Following its rapid growth, and the price activity in crypto more generally, governments are closely watching cryptocurrencies and decentralized applications,” said Sheila Warren, Deputy Head of the Centre for the Fourth Industrial Revolution Network; Executive Committee, World Economic Forum. “This toolkit is a critical first step in helping policy-makers and regulators navigate this quickly evolving space. By outlining the potential risks, while highlighting the opportunities for innovation, we hope it will be a valuable resource in informing balanced approaches to policies and regulations.”

“DeFi has transformative potential for financial services worldwide but also creates an array of serious concerns,” said Kevin Werbach, Director of the Blockchain and Digital Asset Project at Wharton. “Policy-makers and regulators need frameworks to address these issues responsibly. The toolkit provides that roadmap.”

“DeFi presents a generational expansion of financial opportunity (and always accompanying risk). The most important first step before any regulatory or policy undertaking is to level-set on the evolving landscape,” said Michael Mosier, Acting Director of the Financial Crimes Enforcement Network (FinCEN) in the United States. “This report helpfully provides us with a thoughtful, clear and comprehensive cartography of DeFi so that we can make the most of truly innovative opportunities for financial expansion and novel risk mitigation.”

“We have been following the evolution of Crypto and DeFi and decided to take an active role in developing our policies in this field due to the opportunities it could unleash for our people,” said Jehudi Castro Sierra, Digital Transformation Advisor, Presidency of Colombia. “We were pleased to contribute to the toolkit and we are looking forward to using it to inform approaches to this space that are balanced, risk-aware, and forward looking. As the first country in the region to use the Policy-Maker Toolkit, we aim to be the leader in Latin America for DeFi policies and regulation.”

Authors call for technologically neutral approaches that can balance objectives of regulatory regimes and innovation and market development with policies that are fair, efficient and enforceable. Effective regulations should involve a combination of existing, retrofitted, new and bespoke regulations.

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Top 5 Sales Automation Tools for 2021

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In the earlier days, marketers did not have the internet. They had to rely on other forms of media outlets for reaching out to their target market. This process was very lengthy. Months would go by before marketers would see stable growth in their leads.

Moreover, in those days, there were no strong monitoring and tracking tools. So, after deploying their marketing campaigns, marketers had no solid data on how many people they have reached and how many have been successfully converted into clients.

But we live in the era of Automation. Currently, there are hundreds of online marketing tools that let a marketer speed-up their efforts by automating repeated tasks.

In this article, we are going to look at the top 5 Sales Automation tools for 2021. We will see what problems they solve and who can benefit from them.

SignalHire

Signlahire is a strong tool for curating the contact information of your target market. It is a real-time tool for curating verified contact information. It is equally useful to sales representatives, digital marketers, and recruiters.

SignalHire has an online database of over 450M people. Furthermore, it can also help you crawl through different social media accounts like Amazon, LinkedIn, Facebook, Twitter, GitHub, MeetUp, Dribbble, Gmail, Xing, Quora.

Unlike other Email finder tools, SignalHire only curates valid ones. You can use it to conduct a search for bulk emails, looking for up to 1,000 people at once. This tool lets you search for your target audience’s contact information based on their location, position, or name to make things even easier for digital marketers. 

You can use postal code, country, state, province, area, city, or radius to narrow down the search location. For more accurate results and to find emails of the specific target segment, you can use the Boolean search.

Intercom

Chatbots were not this prevalent as they are now. Almost every popular website has one today. They serve multiple purposes now. Starting from giving customer support, receiving customer feedback, to connecting a customer to an agent, these are only some of the tasks that Chatbots are assigned today.

Chatbots have now grown into an industry standard. If you want your website to stand out, you must have one. Moreover, online buyers have grown accustomed to Chatbots. They have developed the comfort zone to interact with a Chatbot and find answers to their queries.

According to a recent study, almost 75% of all online buyers expect a Chatbot to reply within seconds after they submit their query. If you want to offer exactly this to your clients, look no further, Intercom will help you out.

After you download and install the Intercom software on your website, you can set multiple automated replies for your site visitor. You can assign Intercom’s Qualification Bot for curating contact information from your clients. 

Albacross

Albacross is a great tool that lets you assess the identity of your site visitors. It doesn’t stop there. It also gives you the right tools that help you reach out to them and turn them into valuable leads.

If you prefer keeping things organized, you can also use its filtering features to properly divide the audience based on their background, which industry they belong to, and many other different factors.

Albarcross tracks down the behavior of your followers after they land on your site. Furthermore, it also curates their contact information. Once you have this information, you can ask your sales team to conduct an outreach campaign and increase your sales.

Just to make things easier for you, Albacorss will provide you with detailed daily, weekly, and monthly reports. You can also integrate it with your CRM to streamline your outreach efforts.

Sumo

Email is still a popular communication channel. According to an estimate, around half of the global population still uses Email. Moreover, due to the Covid Pandemic, both Generation Z and Millennials have started using Emails on a daily basis for work and academic purposes.

If you agree that Email Marketing is still a highly effective marketing channel, and you want to capitalize on it, Sumo is the tool you should be using.

This marketing tool lets you create beautiful Opt-In forms on your website. When using Sumo, you do not have to write a single line of code. You can pick from premade templates, change the messages on them, and deploy them instantly.

Sumo is a brainchild of the same people behind AppSumo. AppSumo is a globally popular deal listing website for online tools, software, and different Marketing tools.

For beginners, Sumo offers a free plan that comes with a generous amount of advanced features. But if you are serious about Digital Marketing, you should get the Paid plan as it comes with features like unlimited emails and revenue, white labeling, and advanced Analytics.

Drift

If you are looking to increase your conversion from your website, Drift is the tool you should be using. It is often referred to as the most comprehensive tool for increasing conversions.

The key benefit of using Drift is that you can get in touch with your site visitors when they need help. When you are using it, your site visitors will no longer have to wait for long hours before they get a reply.

Drift comes with a built-in Chatbot that lets you set many automated answers. If you want your website to handle automated conversations with your site visitors, then Chatbot is what you need.

After getting Drift, visit your website, and ask your developer to insert the snippet </head> before the end of the title.

Verdict

In conclusion, we wish you all the best with your marketing efforts. We hope you achieve all your marketing goals and increase sales. This article covered the top 5 Sales Automation tools out in the market. We looked into SignalHire, Sumo, Albacross, Drift, and Intercom. Do leave a comment below if you need any help or struggle to make sense of any part mentioned above. Cheers!

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