Manpower recruiting agents in Bangladesh are fearing a 50 per cent slump in the demand for migrant workers due to the on-going global economic crisis. It could lead to a corresponding slump in remittance earnings, which is a bad news for the economy.
Last year migrants remitted some $9.0 billion, well over 10 per cent of the country's GDP, and remittances have been the backbone of the economy for the past few years, playing a vital role in keeping families afloat through the rise in prices of essentials, especially in the rural areas. During the current fiscal, Bangladesh expatriates sent home a record US$6.148 billion in the first eight months that mark a 27.01 per cent growth over the same period of the last fiscal. The remittances from Bangladeshi nationals working abroad were estimated at $784.47 million in February last, a fall by $74.56 million from the previous month. In January 2009, the remittance was worth $859 million, according to the central bank statistics.
According to the central bank, the flow of remittances is still at a satisfactory level. The Bangladesh Bank has already asked the commercial banks for taking effective measures to expedite the flow of inward remittances from different parts of the world including the Middle East, United Kingdom, Malaysia, Italy and Singapore. It is now allowing the commercial banks to sign deals with non-governmental organisations (NGOs) for disbursement of remittances, particularly in the country's rural areas.
Earlier, the central bank took a series of measures to encourage the expatriate Bangladeshis to send home their hard-earned money through the formal banking channel instead of 'hundi' and boost the country's foreign exchange reserve. Currently, some private commercial banks (PCBs) along with the state-owned commercial banks (SCBs) are trying hard to increase the flow of remittances through setting up drawing arrangement with overseas exchange houses from the different parts of the world.
Time and again, successive governments talked of major reforms in manpower export sector including changes in emigration rules and procedures. Yet no improvement was witnessed in the sector. Some times back, a committee headed by an official of the expatriates' welfare ministry was formed to monitor high cost of migration to Malaysia and another committee headed by a home ministry official was purported to investigating how a liaison office of Bangladesh Association of International Recruiting Agencies (BAIRA) was set up in Kuala Lumpur. Another committee was supposed to look into the overall situation in manpower business and identify the problems and irregularities in this sector. There are, however, no information about the progress of the activities of these committees.
Given the global outlook, if Bangladesh can maintain a cumulative average growth rate of 22 per cent in remittance inflow, which is the growth trend for the last three years, it should be able to generate $30 billion remittance income by 2015. For earning this $30 billion, Bangladesh has to improve its current share of 3.0 per cent and capture more than 5.0 per cent share of the remittance inflow.
Suggestions have been made by some quarters for setting up polytechnics and vocational training institutes for this, though there are many such institutes across the country. Instead of setting up new technical training institutes, it would be far more cost effective and quicker to shore-up the extensive network of existing polytechnics and vocational training institutes. Revised curricula relevant to the needs of local industry and of foreign labour markets may be adopted in these institutions; the trainers may be retrained, and successful trainees may be given globally recognised certificates.
Most Bangladeshi migrants are young, male, unskilled, aged between 15-30 and poorly educated. Only 10-20 per cent of them are certified to be vocationally trained and less than 10 per cent general college graduates are exportable. Training has become a necessity with the structural shift towards activities demanding higher skill and emergence of automation. With the current deficiency in vocational training, training institutions serving targeted labour pool such as mason, cleaner, fabricator, carpenter and garment operators or even nurses which can create higher value-added manpower exports.
In Bangladesh, a lower share of remittances comes through official channels, largely due to the migrant workers' lack of knowledge about the formal sector as well as the time and cost involved in channeling money through the formal sector. Workers' remittance can be increased by reducing the transaction cost of remitting money through official channels, offering attractive exchange rates, and providing quicker and secured transfer support.
What the country needs at this stage is to diversify the target markets. Currently, over-reliance on the Middle East as a destination for migrant labour has left the country vulnerable to the economic woes of that region. Diversifying destinations for migrant labour will help provide some level of insurance against a slump in any region.
Secondly, the government needs to improve training and search out greater opportunities for skilled and semi-skilled migrants. This will help diversify and thus protect the sources of remittance income. Added to this, skilled and semi-skilled migrants are less vulnerable to economic recession and also can be expected to remit more money than their non-skilled counterparts.
Finally, the government must take adequate measures to ensure the welfare of the migrant workers. Their interests must be safe-guarded and they should be protected from any kind of scape-goating or unfair treatment. The global economic downturn is real; and, for Bangladesh, the impact on its remittance earnings is the single biggest concern. The government and the manpower agencies must work together to ensure the welfare of the migrant work-force and help increase remittance earnings.
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szkhan@thefinancialexpress-bd.com
