Migration alone cannot secure BD’s future

Bangladesh's long-standing dependence on overseas labour migration may have helped cushion external shocks, but it cannot deliver a sustainable path to middle- or high-income status without significant investment in skills and human capital, experts have warned.
While remittances support consumption, foreign-exchange reserves and short-term macroeconomic stability, the country risks remaining trapped in a remittance-dependent growth cycle unless it strengthens education, expands technical and vocational training, and upgrades polytechnic institutions, they said.
Economists speaking at a seminar in Dhaka on Thursday cautioned that labour migration, though vital, is only a temporary strategy and must be complemented by a robust domestic effort to build a productive, higher-skilled workforce capable of driving long-term economic transformation.
The Bangladesh Institute of Development Studies (BIDS) organised the seminar titled "The Impact of Rising Oil Prices on Remittances and Migrant Workers in a Small Developing Economy" at its auditorium.
AKM Mahbub Morshed, Professor of Economics at Southern Illinois University, USA, delivered the keynote, presenting an econometric model analysing the impact of rising fuel prices on both fuel-exporting and fuel-importing countries, as well as on the host and home countries of migrant workers.
He noted that migration to the Middle East surged during periods of high oil prices, when Gulf countries required workers for construction, water sanitation, and even military projects.
"At that time, our people went abroad, mostly unskilled, because host countries had urgent demand. Today, even if you go to Saudi Arabia or Qatar, many jobs still require little skill - you can manage speaking Bengali and operate on the job," he said.
Professor Morshed explained that rising oil prices boost GDP, consumption, wages and labour demand in oil-exporting countries, while higher oil costs increase production expenses in oil-importing countries, leading to lower oil consumption, a decline in GDP, and reduced wages and consumption.
However, he noted, higher remittance inflows can support domestic demand and push output growth in the long term, adding that the initial effects may eventually reverse, even with some reverse migration.
Presenting the model's outcomes, he said host countries benefit from rising oil prices under open labour migration, while home countries gain if host nations impose restrictions on migration.
The model also suggests that lowering income taxes for wage earners would be the most effective policy for labour-supplying countries to respond to rising oil prices, he added.
Professor Morshed said migration increases remittance inflows, which stabilise households, but it also reflects Bangladesh's failure to generate sufficient productive employment opportunities at home. He cautioned that reliance on labour export alone is inadequate for long-term development.
"If we want to become a richer country or reach a stable middle-income status, sending people abroad is only an interim strategy. Remittance earnings must be channelled into building a skilled workforce to truly progress," he said.
Moderating the event, Dr Mohammad Yunus, Research Director at BIDS, said remittances support domestic consumption and foreign exchange reserves, which in turn help industrial growth.
"But foreign employment alone cannot substitute for strategic investment in skills and productivity. Without it, Bangladesh risks remaining trapped in a remittance-dependent growth cycle," he explained.
Other speakers from BIDS echoed the need for skills development and workforce transformation.
Dr Azreen Karim stressed that migration models often overlook social networks, while Dr Mohammad Harunur Rashid Bhuyan noted the administrative infeasibility of taxing remittances directly.

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