Utilisation of migrant workers' remittances
Tuesday, 18 November 2008
Mokhlesur Rahman
BANGLADESHIS working abroad sent home a record $829 million in July 2008, marking a 46.27 per cent growth over the corresponding period of the previous year.
The remittance received in July was a new monthly record in the country's history after March, 2008. In March, 2008, the remittance aggregated at $808 million, he said.
He said the central bank expects an increase in remittances in November, ahead of Eid-ul-Azha.
However, the prospects for meeting this expectation are now clouded by many uncertainties about the impact of the global financial crisis on the economies of those countries wherefrom most of remittances come to Bangladesh. In June 2008, the remittances stood earlier at $753.58 million, according to BB statistics.
The remittance earnings in the first months of the current fiscal year kept up the growing trend last fiscal, which had a record inflow of $7.939 billion. The growth in 2007-08 was 32.38 per cent over the previous fiscal's.
The country's foreign exchange reserve then stood at $5.82 billion. A total of 3.65 million worker, or 3.28 per cent of its population, are now working abroad. A sizable number of them are settled for long in a number of countries, particularly in Europe and North America.
The remittances from the economic migrants constitute the lion's share of Bangladesh's total foreign exchange receipts. Nevertheless, the workers who go abroad on short-term contracts are mostly less or semi-skilled. The number of the skilled or professional groups, working abroad, is very small. They constitute, approximately 5.0 per cent of the total expatriates.
The increasing inflow of remittances to Bangladesh facilitates import payments and maintain the country's forex reserves otherwise at a comfortable level. Cash receipts of migrant remittances was US$3.06 billion (31.61 per cent of import payments and 46.72 per cent of export earnings) in FY2002-03, US$3.37 billion (34.25 per cent of import payments and 44.34 per cent of export earnings) in FY2003-04 and US$3.85 billion (32.47 per cent of import payments and 44.51 per cent of export earnings) in FY2004-05 and almost four folds of the country's official development assistance (ODA) receipts. Without the remittances the imports would have to be curtailed, which could certainly affect investment and consumption levels and real sector productivity.
Is it not relevant to raise a couple of questions in this context for the policy planners regarding how to ensure the benefits for the workers who send their money home? Could the government adopt the needed strategy or bring the technology to utilise the remittances to develop the national economy and support the living standards of the migrants and their family members. The Bangladesh Bank and other related institutions made some efforts to attract the surplus earnings of the better-off segments of the workers abroad. But, Bangladesh still does not have any action plan to know how much the migrants send through relatives, friends and neighbours in cash or kind.
The government seems very much concerned with facilitating increased inflows but not with how to utilise the same to strengthen the national economy.
Bangladesh still does not have any plans to make employment-accommodation at the macro-level for the final returnees on expiry of the contracts, although this issue should be at the forefront of the development agenda. The country requires to giver more attention to channelise the remittances, at least partly, to income generating activities in trade and industry to eradicate poverty.
Side by side with the national plans, it is important to make the migrant workers aware of the positive impact of their remittance on the national economy and for their own future. Educating the potential migrants about the host country's environment, life style, banking practices, expenditure pattern and social and cultural practices would help not only them but also the reputation of Bangladesh.
BANGLADESHIS working abroad sent home a record $829 million in July 2008, marking a 46.27 per cent growth over the corresponding period of the previous year.
The remittance received in July was a new monthly record in the country's history after March, 2008. In March, 2008, the remittance aggregated at $808 million, he said.
He said the central bank expects an increase in remittances in November, ahead of Eid-ul-Azha.
However, the prospects for meeting this expectation are now clouded by many uncertainties about the impact of the global financial crisis on the economies of those countries wherefrom most of remittances come to Bangladesh. In June 2008, the remittances stood earlier at $753.58 million, according to BB statistics.
The remittance earnings in the first months of the current fiscal year kept up the growing trend last fiscal, which had a record inflow of $7.939 billion. The growth in 2007-08 was 32.38 per cent over the previous fiscal's.
The country's foreign exchange reserve then stood at $5.82 billion. A total of 3.65 million worker, or 3.28 per cent of its population, are now working abroad. A sizable number of them are settled for long in a number of countries, particularly in Europe and North America.
The remittances from the economic migrants constitute the lion's share of Bangladesh's total foreign exchange receipts. Nevertheless, the workers who go abroad on short-term contracts are mostly less or semi-skilled. The number of the skilled or professional groups, working abroad, is very small. They constitute, approximately 5.0 per cent of the total expatriates.
The increasing inflow of remittances to Bangladesh facilitates import payments and maintain the country's forex reserves otherwise at a comfortable level. Cash receipts of migrant remittances was US$3.06 billion (31.61 per cent of import payments and 46.72 per cent of export earnings) in FY2002-03, US$3.37 billion (34.25 per cent of import payments and 44.34 per cent of export earnings) in FY2003-04 and US$3.85 billion (32.47 per cent of import payments and 44.51 per cent of export earnings) in FY2004-05 and almost four folds of the country's official development assistance (ODA) receipts. Without the remittances the imports would have to be curtailed, which could certainly affect investment and consumption levels and real sector productivity.
Is it not relevant to raise a couple of questions in this context for the policy planners regarding how to ensure the benefits for the workers who send their money home? Could the government adopt the needed strategy or bring the technology to utilise the remittances to develop the national economy and support the living standards of the migrants and their family members. The Bangladesh Bank and other related institutions made some efforts to attract the surplus earnings of the better-off segments of the workers abroad. But, Bangladesh still does not have any action plan to know how much the migrants send through relatives, friends and neighbours in cash or kind.
The government seems very much concerned with facilitating increased inflows but not with how to utilise the same to strengthen the national economy.
Bangladesh still does not have any plans to make employment-accommodation at the macro-level for the final returnees on expiry of the contracts, although this issue should be at the forefront of the development agenda. The country requires to giver more attention to channelise the remittances, at least partly, to income generating activities in trade and industry to eradicate poverty.
Side by side with the national plans, it is important to make the migrant workers aware of the positive impact of their remittance on the national economy and for their own future. Educating the potential migrants about the host country's environment, life style, banking practices, expenditure pattern and social and cultural practices would help not only them but also the reputation of Bangladesh.