Boosting remittance inflow

We welcome the central bank’s decision to relax the rule for banks making drawing agreements with exchange houses in other countries, in a bid to boost the inflow of remittance. According to a report published in The Business Post yesterday Bangladesh Bank’s Foreign Exchange Policy Department (FEPD) issued a circular in this regard on Wednesday, allowing banks to make such agreements without prior permission from the regulator. The central bank also waived the requirement of letters of references or certificates from Bangladesh’s embassies or high commissions in other countries.

Banks have been making drawing agreements with exchange houses abroad as per Bangladesh Bank’s policy guidelines of 2007. The new regulations can help facilitate repatriation of wage remittances, according to an official of the central bank.

The migrant workers play a crucial role in the socioeconomic development of Bangladesh, where foreign migrants are known ‘remittance warriors’. The migrant workers labour hard abroad contribute not only to their family expenses but also generate millions of dollars in revenue for Bangladesh.

For developing countries like Bangladesh, remittance, a key source of external finance, plays a pivotal role in social uplift. Bangladesh is a favourite destination for cheap manpower in global labour market. In fact, worldwide immigration can craft considerable social welfare gains for migrants in both countries from where the workers move and to where they resettle.

Workers’ remittance to Bangladesh now constitutes the single largest source of foreign exchange earnings and plays a critical role in the socio-economic development. Remittance has resulted in improved living standards of workers’ families and helped in improving the income distribution in favour of poorer and less skilled workers.

The countries of Middle East and Northern Africa have long been the key destinations for these migrant workers. In the recent past, there have been large flows of Bangladeshi migrant workers to Southeast Asia - particularly to Malaysia and Singapore.

The natural resource based economic prosperity of the first group of destination countries since the 1970s has formed a huge demand mainly for unskilled and semi-skilled workers to work in different sectors of those economies.

Manpower export has been a key foreign currency earner for this densely populated nation and Bangladesh has been sending workers overseas since the mid 1970s and the country’s robust foreign currency reserve is attributed to remittances by migrant workers.

It’s universally known that the Middle East is the largest destination for Bangladeshi workers, playing a laudable role in the mammoth infrastructural development of gulf nations. Bangladeshi workers continue to be in high demand although there is a glass ceiling, which blocks professionals from going overseas to work.

In the past, developed gulf nations referred to the skill level of workers from India, Sri Lanka and other countries to justify taking white collars from them but now Bangladesh offers highly capable, tech savvy university graduates who are fluid in communication and IT. The market for white collar job, from teachers to communication experts to engineers should be open for competition.

Since all economies in the world are facing the brunt of the Ukraine War, saving money will the priority of all nations, developed and developing alike. Taking professionals from Bangladesh will reduce cost on one hand and, on the other, open a new dimension to the manpower exporting/import engagement. The process can be a fair one with permission given to nationals from other competing countries to showcase their skills and be selected through a fair process.

Bangladesh is at a crucial stage on its path towards development, and a healthy remittance stream will, no doubt, play a major part in helping us reach our economic goals. A change in policy is needed to tap remittance that hinges on more than just sending money for family maintenance, particularly from the Bangladeshi diaspora.