Bangladesh is an over populated country with huge labor surplus. And a significant portion of population are working as migrant all over the world and putting contribution to build better Bangladesh by sending hard work remittance. Remittances is now an important part of household livelihood strategies.
A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland. Money sent home by migrants competes with international aid as one of the largest financial inflows to developing countries. Workers’ remittances are a significant part of international capital flows, especially with regard to labor-exporting countries. Remittance has been defined by the World Bank as the part of the earnings which a migrant worker sends back to family members in the country of origin.
Export earnings and remittance are the two main source of Bangladesh foreign currency. The number of Bangladeshi young foreign job seekers are increasing day by day. According to Bangladesh Labor Force Survey 2022, the number of unemployed populations was about 2,582,000 out of which the number of unemployed youths aged 15-29 was 2,184,000. In addition, a good number of graduate and post graduates are added to these unemployed people every year. As per Bureau of Manpower, Employment and Training (BMET), in 1976 total overseas employment who left Bangladesh was 6,087 and foreign remittance inflow in Bangladesh was USD 23.71 million. Gradually number of oversees employment had increased bringing in increased foreign currency remittance amount and in 2023 overseas employment seekers who left Bangladesh was the highest ever total at 1,305,453 number, and in 2021 highest remittance entered was USD 22070.87 million. Meanwhile, judging the early trends of FY 2024-25 the remittances may reach at USD 30 Billions in Bangladesh.
In Bangladesh, export is the main source of foreign currency and remittance is 2nd main source of foreign currency earnings which is 48% in average of gross total export earnings. But significant attention is not given on remittance like the attention given for exports. Last 5 years total export vs. remittance statistics with percentage is shown blow:
Remittances in early of FY 2024-2025 is in increasing trend which indicates it may record the highest remittance in the Bangladesh history. And in previous three consecutive financial years remittance was in growing trend despite the effect of Covid-19 pandemic, effect of Russia-Ukraine war and geo political volatiity. Bangladesh was the 8th highest recipient of remittances in the world with almost USD 21.50 billion in 2022 while neighboring India was 1st recipient remittances with USD 111.22 billion and Pakistan was the 5th highest recipient with USD 30.17billion according to World Bank.
As per Annual Report (July 2022-June 2023) of Bangladesh Bank, Remittance earnings of Bangladesh increased by 2.75 percent to USD 21.610 billion in FY23 from USD 21.031 billion in FY22. The report showed that country’s remittance earnings increased in FY23 because of strong labor market conditions, wage hikes in the high-income destination countries, and high demand for less-skilled migrants due to higher energy prices in the GCC (Gulf Cooperation Council) countries. Apparently, Russia-Ukraine war ignited the soaring global inflation that did not dampen the remittance flows significantly. Besides, numerous supportive policy measures like increasing cash incentives from 2.0 percent to 2.5 percent for the remitters to curb the informal channels, withdrawing the interest ceiling on non-resident foreign currency deposits, imposing ceiling on internet banking transfers and removing the proof of source of income requirements along with the time and cost-effective money transfer process encourage the expatriates to remit more remittances using formal channel throughout the fiscal year in the Gulf and the Middle East region, especially in countries of Oman, Kuwait, the UAE, Qatar, Bahrain and Saudi Arabia.
Chief Adviser of Bangladesh’s interim government Nobel Laureate Prof Muhammad Yunus addressed the 79th session of the United Nations General Assembly (UNGA) on 27th September 2024.In that speech he mentioned about 15 million Bangladeshi diaspora live and work worldwide. In order for migration to be beneficial for all, we have to create pathways for safe, orderly, regular, and responsible migration and mobility of people. The international community has to ensure full respect for human rights and the humane treatment of migrants, regardless of their migration status. Going with the global phenomena on Migration, Bangladesh government is also committed to curve unsafe migration.
Overseas employment has also been increased over the decades. As per Bureau of Manpower, Employment and Training (BMET) data year by year (since 1976-2023) outgoing number of overseas employment and respective year remittance inflows shown as under:
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Remittance earnings represent almost 50% in average of last five years total export. So all sorts of sector barriers need to be identified properly and addressed in time to continue the growth of remittance and employment abroad with safe pathway and law costs.
As per Monetary Policy Review 2023-2024 of Bangladesh Bank “Remittance inflows registered at USD 19.1 billion, growing by 7.9 percent during July-April of FY24, while the growth rate was 2.75 percent in FY23 (Chart III.13). The highest amount of remittance was received mainly from the Gulf region, which accounts for about half (48.8 percent) of the total remittances. During July-April, FY24, remittances from Saudi Arabia decreased by 28.8 percent. The UAE, the Euro region, Malaysia, and the UK contributed significantly to maintain the improved growth in country’s remittance inflows. On the other hand, remittance from the USA declined by 25.3 percent during the same period of FY24 (Chart III.14). However, to enhance the workers’ remittances with the high growth of overseas employment, the government and the BB have taken few need based multifaceted policies like dual incentive scheme, the double limit for remittances to individual mobile financial service (MFS) account, expanded remittance channels, streamlined banking regulations, fair pricing for remittances, the ‘PROBASH’ pension scheme for expatriate Bangladeshis etc.”
Overseas employment has been playing a vital role to the national economy of Bangladesh as well as its continuous development. Bangladeshi migrant workers abroad are imparting in them substantial financial power in Bangladesh. For example, recent upheavals were vividly supported by a group of migrant workers who declared remittance shut down. This had resulted into significant fall of remittance amount in July 2024 USD 1.913.77 billion from USD 2.538 billion in June 2024.
who were power oligarchs having influence in Govt. & were earlier not brought into lawful actions Malpractice and irregularities by a “syndicate” of Bangladeshi recruiting agencies need to be identified and addressed strictly to ensure low-cost but highly skilled labor export for a higher remittance inflow. In some cases, Bangladeshi migrant workers have been & are being forced to face brutality & greed of recruiting agent syndicates frequently. For example, it is reported few years back that a former Bangladeshi MP was punished in Kuwait for human trafficking, facilitating migrant worker travel on fake contracts. A Kuwait court sentenced him to four-year imprisonment, after around seven months of trial in a case filed for bribery and human trafficking and an Appeal Court has sentenced him for another three years of imprisonment (in total 7 years). At the same time, he had been fined by around BDT 56.32 crore (KWD20 lakh). Present Govt. has plan to file cases against the syndicate & exporters of manpower
Malaysia is one of the top migration destination countries at low costs for the Bangladeshi manpower exports and high remittance earnings. Malaysia froze its recruitment from Bangladesh in 2018 as well as this year because of the anomalies. Recently, the Daily Star reported that 16,970 people have failed to reach Malaysia for mismanagement. The Daily Star also reported on 31 May 2024 “Recruitment in Malaysia: Syndicate siphons over $1b out of Bangladesh”. The report also shown how the recruiting agencies extracted BDT 542,000 from each worker instead of Tk. 78,990 set for going to Malysia.
On December 19, 2021, Bangladesh and Malaysia signed a memorandum of understanding, according to which, a workers would need to spend no more than Tk 78,990 for the passport, health checkup, registration, welfare, insurance, identity card, clothing, and recruitment agency fees.
In early October 2024 the Chief Adviser Prof Muhammad Yunus exchanged greetings with Malaysian Prime Minister Anwar Ibrahim on a short visit at Dhaka and held bilateral talks. They discussed the possibility of signing new agreements on agriculture, energy, education, the semiconductor industry, the blue economy, innovation, defense, and youth development. The meeting discussed how Malaysia can take more workers and professionals from Bangladesh through multiple entry visas. Mr. Ibrahim said that he would consider the entry of 18,000 Bangladeshis to his country as soon as possible, if all conditions are met in respect of those Bangladeshi migrant workers who could not reach Malaysia by the May 31 deadline mainly because of shortage of flights.
As remittance by the overseas employees is the second largest source of foreign currency earnings in Bangladesh which is also in growing trend. To boost the remittance inflow and continuing the upward trend, a number measures need to be taken by the government and its related agencies both in short and long term basis. This may include:
Skilled and professional migrant workers can earn much more foreign currency comparing to the unskilled but a lion’s share of Bangladeshi migrant workers in abroad are unskilled. Government and its agencies related to the foreign employment should find out the requirements of foreign recruiting countries and its relevant agencies. Effective measures should be taken to meet the requirements and necessary awareness program should be taken and published about the rule of destination country before an expatriate leave Bangladesh.
Manpower development is one of the key sources of productivity and output so according to the requirement of manpower importers, sufficient skills need to be developed for the job seekers with easy access as well low costs. Attention in quality education system especially technical, vocational education systems, technical training centers and information technology (IT) training centers may play a vital role to develop more skilled and smart workers.
Language is very important for the communication in the destination country of an expatriate. As for example job seekers in South Korea, Japan etc., a certain level language skill of the respective country is a pre-requisite . Language teaching center facility need to be available and affordable for the youth job seekers. Government of Bangladesh can undertake various short-term, medium-term and long-term schemes to financially help employment seekers to establish career and earn livelihood for the potential expatriate who have permanently returned to Bangladesh.
Prevent money laundering which may include campaigning to create awareness to the expatriates, money exchange facility increasing like agent banking in remote areas where no bank or branch exists so that the ultimate receiver can get the available and easy facility to withdraw the remittance. Exchange house increasing at abroad by the Bangladeshi Banks to reduce dependency on money laundering (Hundi). Expatriate normally follow two methods “formal banking channel and “Hundi” to repatriate remittance in Bangladesh though Hundi is informal routes. A group of workers particularly the unskilled like “Hundi” option resulting Bangladesh to be deprived from much needed foreign currency inflow in official channel on record.
All sorts of malpractices and irregularities must be addressed and Bangladesh government must show zero tolerance and act to dismantle the syndicates. The Anti-Corruption Commission must investigate any allegations of corruption, raise cases on money laundering by the manpower agents to demonstrate exemplary punishment of malpractice and irregularities.
Workers usually aspire respect and quick support from Bangladesh embassies/foreign office. So, Embassy/foreign office staffs should be trained to approach and extend extra-ordinary level need based support to the expatriate.
Foreign employment related organization like BOESL should search effectively new labor market and requirements review for Bangladeshi youth job seekers abroad and signing more MoU for manpower recruitment at low & affordable migration costs and in an ethical way.
Since long, there are lot of allegations about airport harassment faced by the workers at airports while they travelled to Bangladesh. To continue the upward trend remittance and contribution to increase foreign currency reserve, all sorts of harassment at airport in Bangladesh should be identified and addressed timely giving remitters motivations, complacence & pride from being remitters.
To conclude as remittances is the 2nd main source of foreign currency in Bangladesh and remittance is now an important part of household livelihood strategies across the country particularly in huge number of rural families. And Bangladesh has a long-time experience and advancement in exporting manpower of skilled, semi-skilled and unskilled level. The Indian diaspora measuring nearly 18 million people collectively sent more than $125 billion back to the country in 2023. In fact, India became the first country to ever receive more than $100 billion in personal remittances in 2022. Comparing Indian migrant workers, Bangladeshi migrant workers are poor in skilled and technical ground. Top 10 Countries Remittances Received (2000-2023):
Bangladesh is in 8th position in the list, marking a significant progress. Yet hurdles, bureaucratic procrastinations & volatile government policies need corrections. Bangladesh Government should identify to effectively bring in more FCY inflows from this sector. Bangladesh Government should plan to optimize its labor surplus employment scopes abroad for increased remittance earnings & accelerating economic development with sustainability.
References:
- https://en.wikipedia.org/wiki/Remittance
- Annual Report (July 2022-June 2023), Bangladesh Bank (The central bank of Bangladesh)
- https://www.tbsnews.net/bangladesh/ex-mp-papuls-jail-sentence-extended-7-years-237637
- https://www.thedailystar.net/nrb/migration/news/recruitment-malaysia-syndicate-siphons-over-1b-out-bangladesh-3623231
- Bureau of Manpower, Employment and Training (BMET),
- Monetary Policy Review 2023-2024 of Bangladesh Bank
- https://www.visualcapitalist.com/countries-receiving-remittances-abroad/
- https://www.thedailystar.net/news/bangladesh/diplomacy/news/malaysia-may-consider-entry-18000-workers-371986
- https://www.thedailystar.net/business/news/game-changing-model-boosting-remittance-3711416