The role of migration in the economy


Abdul Bayes | Published: April 30, 2016 00:00:00 | Updated: February 01, 2018 00:00:00


Even a decade back, migration was not considered to be as important a subject in academic or policy-related discussions as it appears today. But, over the recent past, we observe a growing interest in the subject - even providing a wider space in the on-going development discourse in Bangladesh and beyond. It is now widely recognised that migration has been making substantial contribution to our development with huge inflow of remittances. Next to ready-made garments (RMG), remittances from overseas workers, numbering more than six million, have become a major source of foreign exchange earnings for the country. The remittances received from abroad has exceeded 10 billion US dollars and the amount has remained at the same level despite the global financial crisis.
Both internal and external migration, as evolved over centuries, continue to provide opportunities to the people in a regime of economic hardships and destitutions.  Most of the literature argues that international migration serves the economy in two ways. First, it reduces unemployment and second, it results in remittance flows to the country which fuels the wheels of the economy by supplying the much-needed foreign exchange. It is revealed in some recent studies that the continuous outflow of people of working age and the accompanying inflow of remittances have played a major role in keeping the unemployment rate stable. Migration, therefore, eased the pressure on the successive governments on the need for employment generation within the economy. A lion share of the remitted money has been used to finance the import of much needed capital goods and raw materials for industrial development. It is estimated that, on average, 25-30 per cent of the official import bill is financed by remittances. Further, the steady flow of remittances has eased foreign exchange crisis, improved the balance of payments and helped to increase the supply of national savings. By and large, taking the unofficial remittances into consideration, the contribution to GDP (gross domestic product) could be much higher than we just mentioned.
Academic discourse also abounds on internal migration or rural-urban migration. It is being argued that, migration acts as a short-term 'relief' in the livelihood strategy of the poor people. The major reasons behind internal migration are looking for jobs, higher studies, and resettlement of households who are victims of river erosion. Researches show that the would-be migrants prefer to stay in the villages at the primary stage, failing which they gradually move towards neighbouring villages and then travel to towns. At the beginning, they earn a living from wage employment and various non-farm activities but, once adapted to city life, look for jobs in informal sector such as rickshaw pulling, hawking etc.
What is missing in most cases is the cost of migration. It is true that financial cost of migration gets importance in current discourse, but psychological costs in terms of detachment with family members or ill-motives of spouses in the face of distances etc. have rarely been accounted for. In a small number of researches it has been found that the psychological costs of migration have been substantial. But the good news is that even psychological costs have drastically gone down in recent years in the wake of rapid expansion of communication technology - such as mobile phones. For example, the migrant working in Dubai, for example, can talk with family members at least once in a day.
As could be learnt from the Internet, paraphrased below, the catalyst in the process of labour migration to the Gulf was the discovery of oil reserves. The rapid expansion of demand for oil in developed world generated economic growth…generated demand for skilled and unskilled labour which can not be met from indigenous population with relatively high income levels… Labour migration from outside the Gulf was the natural response in the shortage of manpower and skills… The Gulf has had a long-established links with the Indian subcontinent. …More than two-thirds of Bangladeshi respondents go to the Gulf on contracts with a duration of only one year and more than half came from only three districts: Chittagong, Dhaka and Sylhet…The consequences of labour migration for the sending societies are both economic and social as well as positive and negative.
The Dubai-Syndrome can be divided into three stages: 'Pre-Dubai', 'Dubai' and 'post-Dubai'. The first relates to the intense jealousy of families receiving remittances from the Gulf leading to anxiety and acute depression. "The Dubai" syndrome is loneliness, very hard work, and minimising expense to send more money home. It also includes the psychological and social costs (extra-marital affairs and breaking of marriage) on the part of the immigrant's family. The 'Post-Dubai syndrome relates to either coming back home or getting an extension. In any way, the movement to the Gulf gives the families of immigrants a relatively better living…..
Despite an avalanche of studies on migration in Bangladesh, research gaps still persist on three counts. First, available empirical works seem to be rarely based on household-level information, especially in rural areas. Some of the studies are location specific or census-based rather than drawn from large-scale household surveys. As such, many of the dynamics of migration are missing in the current literature. Second, very few studies capture the inter-temporal variations in the rate of migration. And finally, existing studies seemingly fail to detect the determinants of migration - both internal and external - on sound statistical footing. Therefore, to address these unresolved research issues, one needs to attempt to explain the dynamics of migration based on household-level data, especially panel data, to make migration more research-based.
The writer is a Professor
of Economics at
Jahangirnagar University.
abdulbayes@yahoo.com

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