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The country is at the risk of losing about Tk 6,440 crore in remittance annually as the central bank has not been issuing the Wage-Earner Development Bond (WEDB) for two years to Bangladeshi merchant marine officers and crew.
Under the circumstances, mariners have expressed concern that the foreign currency which could have been remitted and invested at home will instead now go to companies abroad as investments because they have no other choice.
The worst part is that none of the related government departments knows why the bond has not been issued over the past two years.
A mariner generally stays four to nine months in the sea every year, with the acknowledgement of the immigration department. During the working period, mariners used to buy wage-earner bonds for economic benefits.
Now they are eager for the bond’s return as they used to receive several benefits through that, including tax exemption on principal, loan facilities and a 30 per cent increase in death-risk-benefit.
On June 6, Bangladesh Merchant Marine Officers’ Association (BMMOA) wrote to the Shipping Ministry, urging it to take steps to resume WEDB as the marine community has been left angry and disappointed by the Bangladesh Bank (BB) decision.
According to the letter, a total of 10,470 marine officers, who are BMMOA members, earn around $470 million annually and they usually remit this currency to Bangladesh through the legal banking channel or money exchange services.
However, mariners say there are more than 5,000 officers and crew members who are not members of BMMOA yet. Including their earnings, the total yearly income of all mariners would be around $700 million or approximately Tk 6,440 crore.
“We have gone to many government officials but we don’t know yet why BB stopped issuing WEDB from 2020,” BMMOA President Captain Md Anam Chowdhury told The Business Post.
He said a mariner’s career can last highest 15-16 years in his lifetime. That’s why most of them used to buy the bonds from BB as future assets.
“If the central bank or the government does not resume issuing WEDB, mariners will be forced to invest their incomes in foreign companies. As a result, Bangladesh will lose foreign exchange and illegal transactions via Hundi will increase,” Anam said.
Who has the answer?
There are multiple categories of bonds, including WEDB, that are products designed by BB for the benefit of non-resident Bangladeshis (NRBs) who live and work abroad.
The objective is to encourage the NRBs to invest their hard-earned money by purchasing WEDB, on which the government guarantees a fixed interest rate. The maximum limit is Tk 1 crore on bond purchases per person.
Requesting anonymity, an officer of BB’s Debt Management Department, which oversees overall bond activities, said they stopped issuing USD Investment Bond, USD Premium Bond and WEDB following a direction from the Finance Ministry’s Internal Resources Division.
Reached for comment, Finance Division Joint Secretary (Debt Management) Hasan Khaled Foisal told The Business Post that they did not issue any circular in this regard.
“But the Finance Division sometimes makes recommendations. But we don’t know why or based on what context the issuance of WEDB has been stopped,” he said.
Maybe the Department of National Savings (DNS), which is mainly responsible for issuing savings bonds, will be able to shed some light on this matter, he added.
But DNS Director General Maksuda Khatun told The Business Post that they also did not know why the issuance of WEDB was stopped.
Meanwhile, BB sources say mariners used to receive up to 12 per cent compound interest after buying WEDB. But after the government set a single-digit interest rate on all types of bonds and bank loans in 2020, the authorities concerned decided to suspend issuing the USD Investment Bond, USD Premium Bond and WEDB.
Mariners say they are okay with purchasing WEDBs against a single-digit interest rate. All they want is the resumption of the bond’s issuance.
