The world runs on remittances. Covid-19 could end that for many

Money transfer advertisements are viewed in the window of a money transfer service specializing in transfers to Latin America on March 28, 2011. Remittances to Mexico alone in 2019 were worth nearly $39 billion.

Mexico City (CNN)For the past ten years, Mirian López Aceves, 30, received money from her mother, who lives in the United States. But as the pandemic crept its way into the Western Hemisphere earlier this year, the monthly financial provisions that she depends on all but vanished.

The funds don't only support López Aceves, a graphic designer in Mexico's southern Chiapas state -- they also go to support her five-year-old daughter and her grandmother. Never before have they found themselves without the extra help of remittances, like millions of other Mexican families.
When the money dried up, it came at the worst possible time -- López Aceves' clients were also dwindling amid the pandemic and economic shutdown. "I don't have a lot of work right now," López Aceves told CNN in a phone interview. "The truth is, the salary I make is not enough."
The money her mother sent had helped with food, savings, and paying for her daughter's education. With it, they "live okay," she said. But in the wake of the coronavirus, her mom can no longer afford to send money home.

    Mexico depends on remittances

    Money sent from overseas is a huge part of the Mexican economy — a nearly $39 billion annual infusion, according to data from The World Bank. Mexican President Andrés Manuel López Obrador says that 10 million Mexican families like López Aceves' depend on these money transfers, and during a daily press conference on May 8, he thanked citizens abroad for their contributions. "Double, triple thanks to our migrant countrymen, because this helps a lot," he said.
    Ninety-four percent of those transfers come from the US, according to a November 2018 report by the think tank Inter-American Dialogue.
    "Remittances from the US are unfortunately a very important part of Mexico's economy, more for the most vulnerable part of the citizenship," Larry Rubin, President of the American Society of Mexico told CNN.
    But as the coronavirus sweeps the US, mass layoffs and business closures could soon make it difficult for many to send money back home. An April report from the World Bank-backed Global Knowledge Partnership on Migration and Development predicted that remittances "to low- and mid-income countries" will drop around 20% this year in what it described as "the sharpest decline in recent history," due to unemployment and falling wages in host nations.
    López Aceves' mom lost her full-time cleaning job in March, and found herself without work for the first time in seven years. "If she didn't have some savings, she would have returned to Mexico," the daughter said. "And I was worried about myself, but also about my mother. She is alone up there with no one," she added. Her mother declined an interview with CNN.
    For now, remittances to Mexico do not appear to have fallen. According to data from the Bank of Mexico, the country saw a record -- and short-lived -- spike of remittances in March of this year, with a little over $4 billion, a 36% increase from last year.
    In an analysis posted to Twitter, Mexican economist Jonathan Heath attributed the record increase to "the depreciation of the exchange rate encouraging higher shipments," and to many Mexicans returning home from the United States, who may have sent their savings in advance, "to avoid traveling with cash and getting robbed."
    As the pandemic swelled and lockdowns expanded, remittances have slowed back to normal rates in April and May, with nearly $2.9 billion and $3.4 billion respectively.

    A global pause on remittances?

    Globally, remittances are a lifeline between people in rich and poor countries.
    They move more money to families in low-and middle-income countries around the world than foreign direct investment and official development funds combined, according to the Migration Policy Institute. So when the economies in wealthy countries stumble, families across the globe can find their ability to pay for basics like food and medicine threatened.
    Remittances to El Salvador, for example, dropped 40% in April 2020, compared to the same month last year, according to the country's central bank.
    Mirian López Aceves relies on remittances from her mother working in the US.
    "The ongoing economic recession caused by Covid-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies," said World Bank Group President David Malpass in a recent statement.
    As unemployment skyrockets across Latin America, the UN's World Food Programme (WFP) is already worried about hunger in the region. "[Latin America] has seen an almost three-fold rise in the number of people requiring food assistance," WFP said in a statement at the end of June.
      López Aceves' mother has found a new part-time job. But she is not yet able to resume sending money home. So López Aceves moved an hour away to look for work, leaving her daughter in the care of her sister, and hoping the change will help make ends meet.
      "We tried to quarantine but I couldn't completely because the situation here in Mexico is different," she told CNN. "I have to go look for work—to find a way to make money to help with the indispensable, which is food."