Halting the decline in inflow of remittance

Though the number of migrant workers flying abroad is surging, the remittance they are sending home is not. The mismatch is worrying for the government and intriguing for organisations studying the changes in the pattern of inward remittance flow vis-à-vis the number of migrant workers working abroad. However, fluctuations in remittance receipts have always been there. But the observation that inward remittance receipts are on a steady decline is the most worrying aspect. According to the Bangladesh Bank (BB), year-on-year, the remittance inflow in July fell by 5.86 per cent to USD1.97 billion from USD2.09 billion last year. And month by month, the trend was worse, for July's remittance was 10.27 per cent less than June's at USD2.19 billion. And the figure for August is USD1.599 or close to USD1.60 billion. Evidently, this has set the alarm bells ringing. Will September's performance of homeward remittance be still worse? But what can be done to arrest the continuous decline of hard-earned precious foreign currencies from overseas migrant workers that flow into Bangladesh economy every month?
At different discussion events held on the subject from time to time, economists, representative from government bodies like the Bangladesh Overseas Employment and Services Limited (BOESL), Bureau of Manpower, Employment and Training (BMET), Bangladesh Bank (BB), spokespersons of manpower recruiting agencies and research bodies in the field dwelt at length on the issue. In fact, a kind of consensus has been reached on what actually lies behind the diminishing flow of the migrant workers' remittances. One is the overseas workers' increasing tendency to use informal channels, especially the so-called hundi, to send their money. And the other is the gap between government-offered rate of US dollar in taka and what is offered at the kerb market. The government incentive of providing 2.5 per cent on each dollar remitted home through banking channels did work for some time. But with the hundi-operators getting smarter, the migrant workers are now looking to them for service in still greater numbers. Being mostly unskilled workers with little knowledge of the formalities of using banking channels, which are often unfriendly towards the migrant workers, the obvious choice for those workers is the personal service offered by the hundi operators' agents. In a recent report, it came out that the hundi operators have developed a widespread network from the migrant labourers' workplaces in the host countries right to the villages in Bangladesh where their (migrant workers') relatives live. Hundi operators' agents collect the dollars from the individual migrant workers in the host countries and hand over an equivalent amount of taka (of course at the kerb market rate, which at the present rate is around taka 8 more per USD than the official rate of Tk.109) to the relatives of the migrant workers. So, it is getting harder for the official channels to compete with the home service offered by the hundi people. One way to address the issue is to reduce the gap between official exchange rate of USD and that in the informal market to zero. And the other is to bust the hundi networks at home and abroad. The latter option will require cooperation of host government of the expatriate workers in clamping down on the overseas hundi networks. At the same time, at home, the local hundi dens should also be stormed and destroyed.
Last but not least, the bank officials and the diplomatic staffs of our foreign missions should be able to win the hearts of the migrant workers by being more friendly, helpful and cooperative towards them.

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