Downward curve in remittance from Gulf

We have stated on several occasions in this column that unless Bangladesh can send more skilled migrant workers abroad remittance inflow will not increase. A recent IOM study revealed that higher skilled migrant workers send more remittances home than the less-skilled ones as the skilled and experienced workers are naturally employed in better jobs. According to a World Bank report, nearly half of Bangladesh’s five million migrants in the Gulf Cooperation Council, or GCC, countries are less-skilled workers. A huge number of them are employed in manual jobs with less pay. According to a report published in this newspaper on Saturday, Bangladeshi migrant workers sent the least remittance compared to workers from other countries employed in the Gulf Cooperation Council (GCC) region. The report further states that the average monthly remittance sent by a Bangladeshi migrant worker who performs manual work is only $203. This indeed is pittance compared to a Filipino worker who sends $564 a month. Quite interestingly according to various studies Bangladesh ranks sixth among migrant origin countries, but is ninth among the top 10 remittance receiving nations. It means that in spite of sending more workers abroad, Bangladesh earns less in remittance.

The situation could worsen in the Gulf region due to the reform programmes taken by GCC governments to employ more from among the natives. Also, the economic slump in GCC countries– comprising of Bahrain, Kuwait, UAE, Oman, Qatar and Saudi Arabia– is likely to have even more negative impact on remittance inflow.

Yet another hurdle to outmigration is the slow pace of visa issuance in the GCC countries. In recent times there have been a steady fall in the number of workers going abroad. The country is also having to cope with increasing number of workers returning back to Bangladesh.

To offset this unwelcome trend in GCC countries Bangladesh needs to send more professionals and white collared workers as migrants. The country also should look for newer opportunities in non-traditional sectors. In fact, the Covid-19 pandemic can open up a new vista for Bangladesh. The newspaper report, quoting experts, says that Bangladesh should pay more attention to training focusing on the health sector and other technical trades to improve performance. Since the Covid-19 pandemic hit, the world needs more health professionals. In addition to health professionals, Bangladesh also has to prioritise sending people abroad who are trained to work in the service sector, welding and fabrication, quality control, refrigeration and air-conditioning, plumbing and pipe-fitting, graphics design and electrical work.

As is widely known Bangladesh faces a situation of surplus manpower with a combination of professional, skilled, semi-skilled and less-skilled labour force. The local market is not big enough to absorb this huge workforce. It is evident that migration not only reduces unemployment it also results in remittance for the country. Remittance inflow to Bangladesh accounted for 6.6 per cent of GDP in 2020. Indeed, it is the second largest source of foreign exchange earnings after the RMG sector. According to experts, remittances finance a very large chunk of our external deficit. Remittances contribute to augmentation of liquidity in the financial system. It is a source of both dollar liquidity in the foreign exchange market and taka liquidity in the money market, experts believe. Remittances are hugely important to Bangladesh in other ways as well. A single migrant's wages help provide education, health care and food for that worker's family. Remittances can increase domestic consumption and reduce poverty, which is a benefit to the economy. It is rare to find a single person in Bangladesh who doesn't have at least one relative working abroad and sending money home. Each year new non-resident Bangladeshis add to the job market and contribute to the remittance collection of the country.

The importance of remittance inflow to the country’s economic wellbeing cannot be overstated. The authorities concerned have to take steps in order to search for new labour markets abroad. Within this paradigm, technical training must be provided to enhance the skill factor of potential Bangladeshi migrant workers, particularly in the field of technology.