Making best use of remittance money

The situation about the use of remittance money in Bangladesh has hardly changed over the years. The major part of the remittances worth billions of US dollar, sent home by expatriate Bangladeshis every year, is spent mainly on consumption. A number of studies had confirmed it in the past. The latest one done by the International Labour Organisation (ILO) has only reconfirmed it. The non-productive use of the country's remittance earning thus remains a sore point since its investment to any visible extent in income-generating activities could have ensured greater contribution to the economy.
The policymakers have, time and again, publicly acknowledged the need for productive investment of remittance money. But they have never put in place the appropriate policies and programmes to this end. What remains important in getting the remittances invested in productive activities is making the senders as well as recipients of remittances adequately aware of such needs and their benefits. There is no denying that the majority of the expatriate workers come from poor and low-income families. So, it is natural that their first priority would be to spend their remittance income on meeting the basic minimum needs. This, of course, has also an economic value. The remittance earning, being one major source of consumer spending, is a factor that has been contributing largely to alleviation of poverty at a reasonable pace.
 Had there been no respectable level of increase in remittance earning, the poverty level would have been much higher than what it is now. Yet, around 21 per cent remittance income is saved by the families of the expatriate workers. The objective of the policymakers should be to encourage the remitters to save more and divert their savings to more productive activities for generating incremental incomes in the future on a sustained basis. In addition to that, the government does need to look at one more reality -- the decline in both manpower export and remittance growth. The picture of manpower sector is not as rosy as it had been 10 years back. One basic reason for it is the reduced demand for unskilled manpower in most of the Middle Eastern countries.
Until now, Bangladesh has been witnessing a growing mismatch between the supply of its skilled manpower in adequate numbers and the need-based demands of its major manpower export destinations. Most manpower-importing countries are willing to import skilled manpower. But for the lack of necessary policy support, the supply of Bangladesh's skilled manpower has not been matching the demand coming from external sources. Adhocism has more or less played its part in manpower export. But given the importance of the remittance money in the economy, the policymakers do need to be more serious about the issues concerning manpower export and use of remittance income. The government should prepare a comprehensive and broad-based policy package for the manpower sector to help the latter make greater contribution to the economy. The package should cover skill development of manpower and encouragement of productive investment of remittance income.