Remittances rise on migrants' woes

FE Team | Published: July 12, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

Shahiduzzaman Khan
In an effort to shedding new light on how migration could contribute to development, Bangladesh has highlighted the potentially huge benefits of temporary labour movement at an international forum in the Belgian capital of Brussels this week. The country also called upon the developed nations to ease the visa schemes for unskilled and semi-skilled workers.
Bangladesh told the Brussels roundtable that temporary labour migration could be a flexible way of meeting labour shortages in the richer countries, while lessening the unemployment burdens on the developing world, and spreading the developmental gains of migration more widely.
A report published in the FE this week suggested that an estimated 4.0 million Bangladeshis were working abroad who sent home a whopping amount of US$6.0 billion in the last fiscal, that eclipsed other forms of external flows such as direct foreign investment and development aid.
Studies suggest a temporary visa scheme by the OECD (Organisation for Economic Cooperation and Development) countries gives economic benefits both to the wealthy and the impoverished nations worth around US$ 150-200 billion a year. A set of practical policy guidelines for governments of countries of origin and destination to engage with the private sector to the mutual advantage of migrants, host communities, employers and developing economies was scheduled to be
formulated in line with World Trade Organisation (WTO) mode-4 as a follow-up of the Brussels meeting.
According to the World Bank, remittances by the migrant workers helped reduce poverty significantly in the country's eastern region, notably Chittagong, Sylhet and Dhaka, while poverty situation did not improve in the western region where the remittance inflow was not substantial.
Meanwhile, the government has taken an initiative to investigate why the Bangladeshi workers abroad get lower salary than the same category of workers of other countries, and to take necessary measures towards its redress at the earliest. Recently, letters were sent to all the labour wings in eight major labour exporting countries asking them to investigate if the Bangladeshi workers get lower salaries and report to the ministry soon. The government is expected to negotiate with the manpower receiving countries, and take steps to train up the workers so that Bangladeshi workers' salaries are increased, making it at par with the salaries of the same category of workers of other countries.
On an average an unskilled Bangladeshi worker in the Middle Eastern countries get 300 to 500 riyals (Tk 6000 to Tk 10,000) monthly, while the workers from the Philippines, Sri Lanka and Pakistan get 700 to 800 riyals per month. The Filipino domestic workers are now demanding 1000 Saudi riyals per month, while the minimum wage for the Bangladeshi domestic workers in Saudi Arabia was fixed at 400 Saudi riyals. Allegations have it that the malpractices of the visa traders and some recruiting agencies and lack of strong monitoring by the government are mainly responsible for it.
In many cases salary and other facilities that are written in the job contract letters in Bangladesh are changed once the workers arrive in the destination countries. Lack of awareness among the migrant workers is also responsible for this, and such malpractices could be prevented if the government had a mechanism to check all the documents of the workers before they leave the country and take follow-up measures during their work period abroad. Many Bangladeshi middlemen abroad compete among themselves in buying visas from the employers and thus increase the price of the visas, which were previously issued for the overseas workers free of cost.
However, there are laws that the recruiting agencies cannot be involved in such unethical competition that increases migration cost and lowers salary of the workers. The Expatriate Welfare Ministry issued a veiled warning that action would be taken if the agencies were found to be competing among themselves, contributing to the lower salaries of the workers.
Country's central bank is also drafting a 'fast tracking' law aiming to give the legal coverage to the country's huge number of workers abroad. If passed into law or ordinance, the would-be legal instrument will act as a shield for the Bangladeshi overseas workers and their families left home from any possible exploitation by the remitting agents and money transfers agencies. The central bank will also explore multiple mechanisms, including legal coverage, for ensuring "quick, safe and steady" flow of remittances.
Experts say when the people would know that certain guarantees attached to remittances sent through formal channel and failure of the remitting agent to abide by that guarantee give them a method to get their money back, it will create an incentive for them to wire home money preferring the official channel. Once people begin to realise that these protections are being enforced and that they really have the opportunity for recourse through the law, more people will want to go abroad for the sake of their families. They won't be afraid that something bad might happen. The law is expected to make a level playing field for the remittance industry -- everyone servicing this sector will need to abide by the same rules, not just banks.
Remittances are considered critical to the country's economy, constituting approximately 7.0 per cent of gross domestic product (GDP) and growing at around 10 per cent a year. Formal remittances into Bangladesh in the fiscal 2007 reached nearly US $6.0 billion, while an additional 40 per cent were understood to have been channelled through the unofficial 'hundi' system.