Remittances help Bangladesh maintain economic stability during this global crisis

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Another view

By: Hafizur Talukdar

Remittances or expatriate income is one of the many sectors that depend on the incredible progress of Bangladesh’s economy. According to government data, there are over 12 million Bangladeshi workers in 168 countries around the world. When the money earned by sweat and hard work comes into the country, we call it expatriate income or remittance. The importance of their remittances to Bangladesh’s economy has been proven during the global pandemic caused by the coronavirus. Even in the unprecedented global socio-economic and political crisis that began immediately after Corona, the foreign currency sent by expatriates is Bangladesh’s greatest asset.

This handover shows our hope in the fear that has arisen over the future of Bangladesh’s economy after neighboring country Sri Lanka was declared economically bankrupt in the recent past after global panic spread. of bankruptcy. The Global Knowledge Partnership and Development, a multilateral trust fund established by the World Bank, recently reported that Bangladesh received USD 22 billion in remittances or expatriate income in 2020. As a result, Bangladesh has gone from up a notch from 2019 to seventh place in 2020 among low- to middle-income countries.

According to the World Bank, remittances sent by expatriates play a major role in the economy and socio-economic development of Bangladesh. This money is also spent on various development activities including business and trade, industrial production, schools-madrasas, mosques, hospitals. About 63% of remittance income is spent on daily consumption. The poverty of these families is being eliminated. In this period of dollar crisis, expatriates remained hopeful; After July 2022, growth in remittance flows also increased in August.

On August 31, the second month of the financial year, 2.03 billion dollars entered the country in the form of remittances, which is 12.58% more than in August last year. Remittances of $1.81 billion entered the country during this month. Expats handed over $201.69 million in the first month of the current fiscal year in July, which was the highest in the previous 14 months. Compared to July of the previous year, growth was around 12%.

The central bank (Bangladesh Bank) released the updated remittance flow data, showing that an average daily transfer of $65.7 million was received through the banking channel in August.

The government and the Bangladesh Bank have taken various measures to increase the flow of remittances. Expats no longer need documents now. As the dollar rate is high in the market, they try to cut costs and send more money to the country. And to discourage hundi, the process of increasing AD branches by 30 banks is underway. If the AD branch increases, buying and selling dollars will be easier. These things have helped increase the flow of remittances.

According to the Wage Earners Welfare Board, 6-7 lakhs from Bangladesh go to different countries every year. Every month, 50-60,000 people leave Bangladesh for overseas. These expats send an average of $18 billion in remittances per year. The Bangladesh Bank on June 30 announced the new monetary policy for the financial year 2022-23, which indicates that remittances will be on the rise and increase by 15% from last year in the financial year. In progress. According to the latest Bangladesh Bank data, expats sent an average of $70 million a day over the 28 days of the 2022-23 fiscal year, which started on July 1. Over the past fiscal year, expats sent an average of $57.6 million per day.

The dollar has been rising for months due to supply shortages. Besides the banking channel, the dollar also hit an all-time high in the open market. The dollar rate at the bank rose to 109 Tk last month. It has fallen slightly and is now trading at 106-107 taka. But a year ago, the dollar exchange rate was around 84 taka. The dollar rose to 121 Tk in the open market. In this context, banks buy foreign currencies at higher rates from exchange offices to collect dollars. This had a positive impact on remittances sent by expatriates.

However, the increase in the value of the dollar has increased the cost of imports. This has created pressure on Bangladesh’s foreign currency reserves. As of August 31, the central bank’s foreign exchange reserves amounted to 39 billion. In August 2021, the reserve hit a record high of $48.06.

Recruitment agencies depend on intermediaries and brokers due to the lack of proper government control and oversight. Forced foreign travelers also depend on these intermediaries. This situation requires an urgent end.

Work must be done from the beginning of expatriate life to alleviate the suffering of expatriates. An adequate flow of information on immigration must be ensured, so that ordinary people do not fall into the trap of brokers. Human traffickers must be dealt with rigorously. Care should be taken to eliminate brokers or middlemen. Adequate credit should be given to expatriates. Programs should be put in place to convert the country’s workforce into skilled labor. They should be trained through various programs.

Priority should be given to qualified individuals to maintain the flow of remittances. Extreme suffering to and from the airport must be eliminated. Separate channels should be established at the country’s airports for the movement of expatriates. They are the ones who must provide all the necessary facilities given the vitality of our economy. Immigration costs should be reduced. In the case of migration under a bilateral agreement, the expenses must be in the interest of the person going abroad. More than 10,000 Diaspora Wings are expected to be established in Diaspora dominated countries over the next five years to alleviate their suffering in the Diaspora. Embassies and missions should serve the country and the economy with a sense of importance.

The government should establish a research unit on labor market growth and expatriate well-being. Initiatives aimed at rewarding expatriates should be extended so that they are encouraged. Aware of the importance of foreign remittances, which are one of the driving forces of the country’s economy, and giving special priority to the labor export sector, if the population problem can be transformed into effective public resources through an integrated long-term plan, there will be a huge opportunity for socio-economic development in remote areas and the development of the country’s overall economy, including solving the problem unemployment in the country. It is necessary to set up a specialized technical training center in each district for those who want to go abroad and to arrange bank loans on easy terms for trained workers to go abroad. Pravasi Kalyan Bank, Employment Bank and other public and private banks can be used to solve this problem. Thus, the government will be able to meet the demand for highly skilled workers in the international labor market by developing and implementing an integrated plan and updated training policies. Policies that will ensure state facilities and expatriate status.

The writer is a teacher in Bangladesh


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