Proper use of remitted monies

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Remittance flows from overseas Bangladeshi workers are maintaining are uptrend. But regular large flows of remittances, generally, are also helping more and more consumption in the country. Very little can be traced back to spending on the establishment of industries or related productive activities that can help employment and economic growth.
There is also another unwanted side to this and that is related to inflation. The remitted money not finding its way to the desired areas of the economy is helping to swell the total flow of money in circulation without the corresponding level of productive activities. The result is monetary inflation. There is now greater purchasing power in the hands of families who are the beneficiaries of remittances. There is hardly any village in the country without some individuals working overseas. That is helping to drive demand upwards for many consumer items and also pulling up their prices in the process. Therefore, it is very necessary to start a process that would lead to guiding of remitted resources more and more into production activities. Government cannot coerce the beneficiaries of remittances not to indulge in sheer consumption. But opportunities can be created for them to invest their resources in gainful productive ventures.
The new government needs to engage in early planning to determine in what ways it can create incentives for private persons -- who are the beneficiaries of remittances -- to consider investing at least a part of the money they receive as remittances. Side by side, government should seek to draw gradually a part of the remitted money into official savings and other schemes such as industrial bonds. The net of such efforts will be boosting the rate of national savings and utilising the same for industrialisation and related productive activities, causing the economy to expand. The sooner the government gets down to forming and executing such policies, the better will be for the economy.
Amirul Islam
New DOHS
Dhaka.