Home ›› 27 Nov 2021 ›› Editorial
The World Bank’s November brief on the low monthly average remittance sent by Bangladeshi migrants performing manual works in the Gulf Cooperation Council (GCC) region is a despairing revelation but simultaneously gives hope that proper training and upskilling can change the situation and double the sum.
Bangladesh’s economy has depended heavily on remittance, the country’s largest source of foreign exchange earnings after readymade garment products. And the bulk traditionally comes from the Middle East region, more specifically, the GCC member states.
In 2020, for example, expatriate Bangladeshis sent home USD$ 21,752.27 million and a staggering 56.74 per cent of the amount were remitted from the GCC countries.
The GCC is a coalition of six states – Kingdom of Saudi Arabia, United Arab Emirates, State of Bahrain, Sultanate of Oman, State of Qatar and State of Kuwait – formed in 1981 to foster economic, scientific, and business cooperation. Saudi Arabia is the most powerful member of this group. Together, the GCC bloc holds almost half of the world’s oil reserves.
The oil-rich region is the most popular destination for Bangladeshi workers. Between 1976 and December 2019, the majority of Bangladeshis who migrated for work went to the GCC countries. Data from the Bangladesh Manpower Employment and Training (BMET) show 31.89 per cent (4,049,588) of the total documented Bangladeshi expatriates found work in Saudi Arabia, followed by UAE (18.68 per cent or 2,371,545), Oman (11.82 per cent or 1,500,870), Qatar (6.36 per cent or 808,090), Kuwait (4.95 per cent or 628,950) and Bahrain (3.23 per cent or 410,460).
Overall, this bloc employed 76.93 per cent of the total Bangladeshi expatriates, making it the source of the highest remittance for Bangladesh.
We have been featured in the list of top 50 recipients of remittance inflows in the world. The significance of remittances in Bangladesh’s economy stood at 6.5 per cent this year, according to the World Bank’s estimate.
In its ‘Covid-19 Crisis Through a Migration Lens’, the World Bank noted that at least half of the five million Bangladeshi migrant workers in the GCC countries are less-skilled. This, in turn, affects their capabilities to remit. For example, the average monthly remittance of a Bangladeshi migrant who performs manual work is only $203 compared to $276 for a Pakistani, $396 for an Indian, $564 for a Filipino, and $533 for a Chinese.
WARBE Development Foundation Chairman Syed Saiful Haque said that low wages for Bangladeshi migrant workers were not new in the Gulf. “They earn less because they are less skilled. Neither the government nor any other organisation, including recruiting agencies, took pragmatic steps to increase the number of skilled workers,” he said.
Dr Tasneem Siddiqui, founding chair of the Refugee and Migratory Movements Research Unit (RMMRU), concurred, noting that most Bangladeshi workers in the Gulf are not skilled or highly trained. A skilled worker can earn a lot more than an unskilled or less skilled migrant. Gulf countries also need many manual labourers and Bangladeshi workers are doing these low-paid jobs, she explained.
Recruiting agencies, who send people abroad for work, earn against each migrant. Saiful pointed out these agencies don’t feel encouraged to send skilled manpower who don’t pay as much as the unskilled ones.
And migrants from Bangladesh continue to pay exorbitant amounts to get jobs abroad. Newly released data on the 2019-20 pre-pandemic period show that Bangladeshi workers in Saudi Arabia paid the equivalent of 20 months of their earnings (around $5,000).
But the lack of skill is not the only bad news for Bangladesh. The employment of Bangladeshi workers in the GCC region fell by 19 per cent in the January-March period of this year compared to the same period of 2020.
In a blog post, Dilip Ratha, Lead Economist of Migration and Remittances, and head of KNOMAD, noted that the number of foreign workers in the GCC region continued to fall in 2021.
This situation will hopefully improve with the coronavirus situation.
Around 40,000 Bangladeshis who returned home on vacation could not go back this year. Another impediment to outmigration is the slow pace of visa issuance in the GCC countries. And there’s mismanagement on top of that. Migrant workers who were stuck here had demonstrated in Dhaka last year demanding an extension of visa and Iqama tenures and arranging tickets to go back to the GCC countries where they were employed before the pandemic struck.
There has been substantial growth in remittance. In Bangladesh, although remittances rose above the pre–Covid and 2020 levels by almost 6 per cent to reach $23 billion in 2021, a slowdown in growth was distinct, the World Bank noted. The slowing growth in remittances in the first nine months of this year already suggests downside risks for the next year, fuelled chiefly by the slow outmigration of return migrants, keeping remittances flat in the year.
But sending money to South Asia through official channels is expensive compared with informal channels which remain popular among the migrants. Zahid Hussain, a former lead economist of World Bank’s Dhaka office, said that remittance inflow had increased during the pandemic with a collapse of the informal channels like the hundi, but now that the informal channels are back in business, more migrants are opting for them.
Cost-reducing policies will create a win-win situation. The government should reduce costs and encourage expatriates to send money through legal channels – its 2 per cent incentive helped boost the remittance inflow previously.
Ratha suggested policymakers lower the cost of remittances and increase access to banking for migrants and remittance service providers. Migrants may also need protection against overwork or underpayment by employers during the pandemic.
Overseas employment in 2019 was 700,159, BMET data show, with the majority (56.99 per cent or 399,000) in Saudi Arabia, followed by Oman (10.38 per cent or 72,654) and Qatar (7.18 per cent or 50,292). But last year, when the pandemic brought the world to its knees, employment from Bangladesh nosedived to 217,669 with 74.30 per cent or 161,726 of them in Saudi Arabia, followed by Oman (9.68 per cent or 21,071).
With the virus situation improving and more countries opening up, it is high time – albeit delayed – Bangladesh took more steps to reskill and upskill its potential migrant workers. One of the areas the government can focus on is health and other technical trade to cash in on the rising demand for health professionals since the pandemic struck. Doing so will help Bangladesh export more workforce, grab more sectors, and ensure a high steady flow of remittances.
The writer is a journalist with The Business Post. He can be reached at zoglulkamal@gmail.com
