Remittance outflows in recent years from countries from which Bangladesh receives most of its remittances are shown in Table 1 below. Remittance statistics of all gulf countries are not easily available beyond 2014, the year when oil price crashed. Remittance outflows in these countries show an upward trend during the five-year period 2010-14. In particular, remittances from Saudi Arabia and the UAE increased very robustly. Local sources, including news media, report robust growth of remittances in both these countries as well as in the gulf region as a whole in 2015. For example, the Chief Executive Officer (CEO) of UAE Exchange recently noted: "Despite economic pressures, remittance outflows from oil-exporting GCC countries continued to rise in 2015 due to maintenance of fiscal spending, and the peg to a strong US dollar by most economies in the GCC." (Gulf News, December 4, 2016). This suggests that the large reduction in oil prices has not affected remittance outflows from gulf countries in either 2014 or 2015, and the available information indicates it is unlikely to do so also in 2016. The import of workers from overseas has also increased markedly in the Gulf countries (Saudi Gazette, November 28, 2016). Thus, the evidence we have on hand does not lend any support to the claim that the oil market slump has adversely impacted on remittance outflows from, and the hiring of foreign workers in, the gulf countries.
The largest employer of our workers is Saudi Arabia followed by the UAE. Oman, Qatar and Bahrain are also important destinations of the job-seekers. Together the gulf countries accounted for more than two-thirds of the total workforce who migrated overseas in 2015. More than three-quarters of the workers who migrated overseas since 1976 went to these countries. It seems plausible to assume that about the same fraction of the current stock of migrants from Bangladesh working overseas are in these gulf countries. Therefore, the importance of these countries for employment of Bangladeshi workers and remittance flows cannot be overstated.
The flow of temporary migration of workers to these countries from Bangladesh increased massively in both 2015 (47.5 per cent) and 2016 (36.9 per cent until November). And yet remittances from these countries declined by 9.6 per cent between January-November 2015 and 2016; and by 5.2 per cent between the fiscal years 2014-15 and 2015-16. During July-November 2016-17 period remittances declined by 15.0 per cent from the corresponding period in 2015-16. The trend of remittances and migrant labour movement into these countries are shown in the Table 2 and Table 3 below. The incipient scissors crisis during the last two years is evident.
It is not the case that the flow of remittances from the gulf countries only have declined; actually all major sources of remittances to Bangladesh, including USA, Malaysia and UK, are showing the same slowing trend. Actually, the declining trend of remittances from the gulf countries is about the same as that from the rest of the remitting countries. Globally both remittance inflow and outflow data of the World Bank also show a decline since 2014, but the decline is more pronounced in the case of outflows suggesting differences in the accuracy of estimates.
In view of the global slowdown the decline in remittance inflow into Bangladesh should be expected. What is puzzling is that the flow of migrant workers during this period has increased enormously which should normally suggest an increase in demand for Bangladeshi workers and consequently an increase in total wage income. Since the opposite has happened we must conclude that either total employment has declined despite the increase in migration or that the wages have declined markedly. Both these have dire implications for the workers. The first would imply a large part of our workforce overseas is actually unemployed, while the second implies there has been a significant deterioration in the work conditions, which were poor to begin with.
If the decline in remittances is believed to be temporary, then no fundamental changes in policies are called for, the situation will autocorrect. However, if this situation persists, some policy actions may be necessary. However, policy implications will differ in an essential manner depending on what really is the cause of the decline in the remittance inflows. The cause cannot be established convincingly without some serious research into the matter. Conjectures or apparently plausible answers, which many people are addicted to, could lead to policy blunders that could create worse problems in future. It is unfortunate that neither Bureau of Manpower Employment and Training nor Bangladesh Bureau of Statistics nor Bangladesh Bank has regarded it necessary to estimate the stock of our workers in various countries and the spread of hundi. Without credible information on them it is not possible to say if the large increase in the number of workers who have gone overseas during the last two years has actually increased the stock of our workers there and if informal transfers have increased. Also we do not have information on their employment status or the terms of employment.
Since the external labour market is the principal source of non-agricultural employment and a stout pillar of support of the balance of payments, it is advisable to look into the various facets of this adverse development with some seriousness.
Concluded. The writer is Professor, Department of Economics, University of Dhaka.
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