Home ›› 03 Nov 2021 ›› Editorial
Defying gloomy projections, the inflow of remittance into Bangladesh grew during the height of the Covid-19 pandemic. This growth in inward remittances from Bangladeshis working abroad was much faster than inflows to other South Asian countries. This happened at a time when the Covid-19 was battering most of the global economies. However, the rise in remittance inflow could not be sustained and the picture is quite different at present. A report published in this newspaper on Tuesday states that the remittance inflow has dropped for five consecutive months. The latest data from Bangladesh Bank reveals, expatriate Bangladeshis remitted $1.64 billion in October this year, a significant drop of 21.65 per cent from the corresponding month a year earlier.
Experts and bankers predicted the decline in remittance inflow as there have been no new manpower exports since March, 2020. Quite a large number of Bangladeshis working abroad were forced to return home during the pandemic. Due to restrictions in movement when the pandemic was at its worst informal channels like hundi virtually had to close shop. Now that the travel restrictions are no longer in place the informal channels are back to business.
Hundi has again become popular among the expatriates who send their remittances back home. The money comes to Bangladesh, bypassing the banking channel that collects charges for money transfers and deposits to the public exchequer. Hundi deprives Bangladesh of foreign currencies as receivers get local currency. Another great risk of hundi is that the money can easily go to the wrong hands for terrorism and similar subversive activities. There should be stronger monitoring by the central bank to discourage the informal channels. The law enforcers should be more vigilant and also more proactive to break the unholy hundi nexus. Experts have suggested that to check hundi the government needs to keep the exchange rate stable. On a more positive note, the government is considering whether to give three per cent incentive on the amounts remitted to Bangladesh.
The continuing fall in remittances will create pressure on the government's foreign currency reserve and exchange rate. Since remittance is crucial for the country, there is reason to worry. The continuing decline in remittance will have detrimental impacts on poverty, nutrition, child labour, as well as other human development indicators.
It is widely accepted that overseas migration has helped reshape Bangladeshi economy and the society at large. It is worth mentioning that around 50 million people in Bangladesh are directly dependent on remittance. Remittance sent home by migrant workers is one of the main pillars of the economy of Bangladesh, contributing 12 per cent in GDP and generating 9 per cent employment of the total active workforce of Bangladesh. Bangladeshis are the sixth largest group of migrants in the world, with millions of citizens living and working outside the country. The consistency and dependability of remittances have acted as a kind of social safety net for a huge number of people.
Having said that, it also must be admitted that unskilled workers cannot be a stable or sustainable source of remittance in the long run. Research shows, half of Bangladeshi migrant workers are unskilled. Among Bangladesh migrant workers only two per cent are skilled workers or professionals. With workplaces going high-tech in many host countries, unskilled or even semi-skilled labours will be gradually phased out. Bangladesh must produce many more skilled workers and other professionals to meet the changing demands of the host countries. Against this backdrop, through private-public partnership, a massive skill training programme should be launched across the country. It is high time that the we concentrate on increasing human development. Low-skilled workers yields lower return on migration. One data shows that skilled migrants send on an average USD 255 more home per month than lower skilled migrants.
Bangladesh should use diplomatic channels to ensure welfare, wages, and benefits for our migrant workers staying in host countries. There should be concerted efforts to facilitate employment retention and placement. The host countries also need to take adequate measures regarding safeguarding the migrant workers. Retaining jobs of the migrant workers might help the destination countries in reviving their economies.
