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26 February, 2021 05:20:24 PM
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Bangladesh's surprise remittance flow

In the midst of a kind of economic recession in the world, the news of the increase in remittances in Bangladesh has undoubtedly given us hope. Experts thought that Covid-19 would have a negative impact on remittances but it did not happen. The number of emigrant workers is increasing day by day and remittance flow is increasing.
Majhar Mannan
Bangladesh's surprise remittance flow

Remittances play a huge role in the economy of developing countries around the world.  However, due to last year's Covid-19 epidemic, most of the countries could not keep up with the previous remittance flow but Bangladesh is an exception. In the outgoing year, various countries of the world have struggled in the flow of remittances due to Covid-19 pandemic but Bangladesh is in a good position there. Despite the decline in remittance inflows from India and China, Bangladesh did not have to face such a situation.  In 2020, the remittance flow in Bangladesh has increased compared to the previous year.  Remittance inflows to Bangladesh, Pakistan and Mexico have increased and remittance inflows to seven other developing countries have decreased. A report by The Economist Intelligence Unit provides such information.
According to the report of the organization, the remittance of Bangladesh in 2019 was 1840 crore dollars.  In 2020, Bangladesh's remittance was 1988 crore dollars. 148 crore dollars increased in one year. According to a statistic, the amount of money sent to the country legally has increased. In 2020, a total of 71,670 crore dollars in remittances flowed worldwide.

Last year, Bangladesh's remittance increased by 8 percent. Immigrant workers  sent 196 crore 26 lakh dollars remittances in January 2021 and that’s about 20 percent more than in January last year. Last January, immigrants sent 163 crore 84 lakh remittances.  For the first time in the history of the country, foreign exchange reserves exceeded 43 billion dollars on December 30, 2020. With this reserve it is possible to meet the import cost of 10 and a half months.  11 percent of the country's total remittances come from Australia, Japan, Malaysia and Singapore. 12% remittances come from EU countries. 60% of remittances come from Middle East countries. 11% of remittances come from the United States and 7% comes from other countries. Most of Bangladesh's remittances come from Saudi Arabia. Bangladesh receives the second highest remittances from the United Arab Emirates.

These remittances have a huge contribution to keep the wheel of the country's economy in motion. These remittances cover 5.44% of GDP and 30% of import expenditure. Imports cost more than export earnings due to which it is not possible to meet import expenses with export earnings. Therefore, this remittance plays a very important role in the foreign exchange management of the country.

In the midst of a kind of economic recession in the world, the news of the increase in remittances in Bangladesh has undoubtedly given us hope. Experts thought that Covid-19 would have a negative impact on remittances but it did not happen.  Remittance has become a major contributor to the Bangladesh economy. The number of emigrant workers is increasing day by day and remittance flow is increasing. Remittances improve a country's per capita income and GDP. Although Bangladesh is a small country on the world map, the speed of its economy is surprising the world day by day. Remittances are one of the pillars of Bangladesh's economy. Relying on remittances from immigrant workers, the country's foreign exchange reserves have now come a long way and are making a huge contribution to the country's economy.

Remittances are a big part of our GDP and this makes it possible to fund large projects on our own. Remittances sent by immigrant workers play a huge role in creating employment.  Our neighbor India is the world's largest remittance recipient and then there is China's position. But the remittance flow of these two big countries has decreased this year but it has increased in Bangladesh. If the money sent by immigrant workers could be invested in productive sectors, it would enrich the economy much more. Remittances, which contribute about 12 percent to the country's current GDP, have become a significant partner in the country's development and currency reserves. According to the Central Bank of Bangladesh, the immigrants have sent 1820 crore 49 lakh dollars in the fiscal year 2019-20  ignoring the adversities of the Covid-19 period. In Bangladeshi currency the amount is 1 lakh 54 thousand 742 crore taka.

Every year 6-7 lakh people from Bangladesh enter the labor market of different countries of the world. They send about 18 billion dollars remittances to the country each year, which is more than half of total export earnings. According to the Ministry of Finance, Bangladesh is currently sending workers to 174 countries and their number is more than 1 crore 20 lakhs. Three-quarters of them are employed in the Middle East. Two-thirds of remittances come from the Middle East. This remittance fighter is the lifeblood of Bangladesh's economy.  These remittance fighters have a great contribution to keep the country's economy alive and well, so if we can send more skilled workers to the foreign labor market, remittances will increase further.

Although workers from Bangladesh once went to abroad legally for employment, the labor market has been shrinking in the last few years. Covid-19 has put a lot of pressure on the world labor market. Every year 8 - 10 lakh workers officially go abroad from Bangladesh but most of them go there as unskilled workers. As a result of the Covid-19, the rate of migrant workers going abroad has decreased a lot. Although more than 7 lakh people from Bangladesh go abroad for work every year, by 2020 less than two lakh workers have gone. The process of migration of five lakh workers has been stuck since the beginning of Covid-19. Some analysts believe that remittances have increased as a large number of workers return home with their savings. But it could have a negative impact in the coming years.

Experts believe that remittances may decline as new workers were no longer be able to go abroad after March 2020. So keeping foreign employment normal will be a big challenge.

Remittances increase through manpower exports and unemployment is eliminated. Bangladesh is currently the sixth largest exporter of migrants in the world. Bangladesh ranks ninth among the 10 countries receiving the most remittances. According to BMET's calculations, from 1976 to 2020 immigrants have earned a lot of foreign exchange from different countries of the world and the amount is about 232 billion US dollars. After the garment sector, manpower exports are the second highest contributor to Bangladesh's GDP. In 2017, a record number of 10 lakh 8 thousand 525 workers went abroad from Bangladesh. In 2018 this number decreased and 7 lakh 34 thousand 181 workers went abroad. In 2019, 7 lakh 159 workers migrated abroad.

Although 7 lakh new workers were supposed to be sent abroad by 2020, it was not possible due to Corona and only 2 lakh 17 thousand 669 workers were sent. About three lakh workers have returned to the country after losing their jobs due to Covid-19.

For various reasons, the foreign labor market is shrinking day by day and the demand for unskilled manpower is rapidly declining. Many countries are not hiring workers without skill. In this age of globalization, there is no alternative to technology based skilled manpower. Skilled manpower needs to be built by reforming the education system of Bangladesh and ensuring practical education. In addition to the lack of skills of the workers, they also have to overcome the language weakness.

The Saudi labor market is shrinking day by day. Despite the decline in manpower exports due to the ongoing Corona epidemic, remittance inflows have been quite good. In 2020, about 9.5 million immigrant workers sent large sums of money from 168 countries and the amount is 21 thousand 752 million US dollars which is 3397 million US dollars more than the previous year.  Immigrant Workers sent more money for family needs during this time and the government announced 2 percent cash incentive to encourage them to send remittances legally. And as a result, foreign exchange reserves have increased.

However, in order to keep pace with the flow of remittances and increase them further, skilled workers must be sent to abroad.

The writer is Assistant Professor, B A F Shaheen College, Kurmitola, Dhaka Cantonment.

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Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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