Nov 22
Manpower Export Goes Up, Remittance Goes Down PDF Print E-mail

 

By Ziaur Rahman

 

The flow of remittance, the largest source of the country’s foreign exchange after the export receipts, declined by 14.48 per cent or US$2.16 billion in the just-concluded fiscal year although the country's manpower export witnessed a robust growth.

 

The number of outbound workers has gone up remarkably in recent days, but the inflow of remittance has been on a declining curve over the periods.

 

The inward flow of remittances came down to US$12.77 billion in last fiscal (2016-17) from $14.93 billion a year before. Even the inflows of remittance during the first seven months of 2017 declined by 9 percent despite increase of manpower export by more than 41 percent in the same period.

 

According to Ministry of Expatriates’ Welfare & Overseas Employment, some 596,705 Bangladeshi workers went to different countries with jobs during the first seven months (January-July) this year, up by 175,487, than the figure (421,216) during the same period in last year.  The expatriate Bangladeshi sent US$ 7.713 billion during the January-July period this year as against US$ 8.45 billion during the same period in last year.

 

The ministry data show, some 757,731 Bangladeshi workers went to different countries with jobs in the last calendar year (2016), up by 201,850 than the previous year’s total figure of 555,881. However, the country earned $13.61 billion in 2016 while the amount was $15.27 billion in 2015.

 

However, the inward remittance inflow has marked a rise in August after a declining trend for over one year as the country received $1.4185 billion from the expatriates in the month. In July, the country’s remittance earning was $1.115 billion.

 

As per Bangladesh Bank’s latest data, the remittance inflow crossed the benchmark of $1.4 billion in August after maintaining an average $1.1 billion mark throughout the years of 2015 and 2016.

In June 2016, the country received $1.465 billion and since then the remittance took a downward trend.

 

Officials in the central bank believe that the Eid-ul-Azha might be a major reason behind the increase in the remittance inflow as expatriates send extra money to their relatives living in the country for buying sacrificial animals.

 

Officials attributed the causes to various reasons, including illegal hundi business and a drop in the oil prices in the Middle East. A WB report also said the slowdown in growth is largely due to economic weakness in the major remittance-sending countries, weak oil prices and currency fluctuations. Moreover, remittance inflow from countries like the UK and the USA has, reportedly, declined following the uncertainties that have cropped up following Brexit and US elections.

 

The Middle Eastern countries are going through an economic downturn due to a fall in oil price. Even Saudi Arabia, a large labour market for Bangladesh, is facing budget deficit. As a result, migrant workers are losing jobs or seeing wage cuts, both of which account for the slump in remittance inflow.

 

Low oil prices and weak economic growth in Gulf countries also brought down remittance inflows to India, the top receiving country for remittances followed by China, by 8.9 percent in 2016. India was the largest remittance recipient ($62.7 billion), followed closely by China ($61 billion), the Philippines ($29.9 billion), Mexico ($28.5 billion) and Pakistan ($19.8 billion), making up the top five. In 2016, remittance flows to Nepal declined by an estimated 6.7 percent from the previous year’s high level.

 

Experts and economists, however, pointed out that the country is facing various challenges in sending workers with quality jobs to major destinations such as Middle Eastern countries and Malaysia as it cannot attain the potential of raising manpower exports.

 

According to sources, the wage level of Bangladeshi migrant workers is very low as compared other countries.  Bangladeshi migrant workers are paid much less than the workers even of the neighbouring countries as almost half of the workers are still unskilled and only a few are professionals.

 

Most of the Bangladeshi migrant’s destinations are the Middle -East countries and South Asian countries where wages of labor are very low in comparison to developed countries. Generally skilled migrant workers are paid higher wages.  But most of the Bangladeshi workers are un-skilled and paid low level of wages.

 

Due to lower level of wages remittances flows to Bangladesh are low in comparison to huge number of expatriate workers. According to sources, the Indians, Pakistanis, Sri Lankans, Filipinos, Ethiopians, Ghanaians and Ugandans earn twice the wage Bangladeshis get in the UAE.

 

Demographic momentum of the Organisation for Economic Co-operation and Development (OECD)  countries, characterised particularly by the growth in ageing population resulting in increased demand  for  caring services and shortage of workers in the healthcare sector, is likely to create significant job  opportunities for developing countries, particularly in such areas as physicians, nursing, medical technicians and caring services.

 

But Bangladesh made an unenviable record of failure to avail the huge demand for skilled workers in the Middle East and other destinations for the country’s unskilled workers. Employers abroad even don’t accept skilled workers from Bangladesh who had attended short courses in various trades at home, said officials as well as recruiting agencies.

 

This reinforces the need to  create  more  skilled  and  professional  migrants.  At  the  same  time,  with  new  opportunities  arising  in  countries  such  as  Saudi  Arab,  Maldives  and  Malaysia,  technical training centres (TTCs) should be strengthened both in terms of manpower and logistics.  It  may  be  noted  here  that  the  government  has  recently  allocated  about  Tk.  900  crore to set up 36 new TTCs across the country in view of the growing demand for skilled migrant workers in the global market

 

Migrant workers facing challenges

 

Bangladesh’s migrant workers toil in foreign lands for longer hours compared to peers from other countries, but they earn much less as they lack skills and face a language barrier, depriving themselves of a better future and the country of remittance.

 

Experts at a number of meetings with Expatriates’ Welfare and Overseas Employment Ministry urged the government to equip aspirant migrant workers with necessary skills and languages before they depart for jobs, so they can earn more and protect themselves from exploitation.

 

“A skilled worker can remit more,” said Syed Manzur Elahi, a former advisor to the caretaker government at a meeting citing examples that Filipino migrant workers send home more in remittance compared to Bangladeshi workers.  “But we are stuck in the unskilled segment of the labour market.”

 

According to a survey presented at the 16th ILO Asia and the Pacific Regional Meeting in Bali, Indonesia, last year, more than 75 percent of migrant workers receive wages lower than what they were promised before they left their home countries, or experienced unforeseen deductions.

 

Another recent study by Refugee and Migratory Movements Research Unit (RMMRU), about 51 per cent overseas jobseekers experienced fraudulence or degrading treatment at different stages of their migration process. Among the cheated jobseekers, 19 per cent failed to go abroad after paying a part or full amount of money while 32 per cent experienced fraudulence in the destination countries.

 

Average cost of migration from Bangladesh to most countries is known to be between Tk. 2-3 lakh. If a Bangladeshi migrant worker had to spend Tk. 2 lakh to go to Saudi Arab in 2010, it would have taken him/her about two years to recover the cost.

 

According to sources, about 60 percent of Bangladeshi migrants leave on their own, 39 percent leave with the help of recruiters, and one percent leave via government and other channels. However, most of the 60 percent who leave "on their own" in fact leave with the help of agents.

 

A large number of aspirant migrant workers become victims of unethical profit-seeking motive of a section of recruiting agencies, operating in collaboration with the so called

dalals (middlemen), and are forced to pay an excessively high price for the visa and migration-related other expenditure heads.

 

Bangladesh government has established the state-run Probashi Kalyan Bank (PKB) to fund workers going abroad for employment, facilitate sending remittances, and reduce migration cost. The PKB was inaugurated on 20 April 2011, on the eve of the 4th ministerial level conference of the Colombo Process.

 

In view of the current deceleration in overseas migration and remittance inflow, Bangladesh is now faced with a number of challenges to sustain future growth of the sector. A number of areas will require attention and initiatives on the part of the policymakers in this context.

Reducing cost of migration should receive highest priority.

 

A number of steps will need to be taken towards this. These include discussion with host countries to /underwrite cost of migration, enforcement of government decision with regard to maximum country-specific migration cost, removal of middlemen through more field-level officials and awareness raising programmes, and taking advantage of the newly-established PKB in providing loans to aspiring migrants.

 

Special programmes will need to be initiated for women and those coming from economically disadvantaged areas. PKB can play a facilitating role in this context.

 

Remitters losing interest on banking channel

 

Usually the expatriate Bangladeshis send money through banking channel or approved money exchangers, but sometimes they use the informal channel like middlemen, hundi as the official channel take more time.

 

“Money sent through official channel does not immediately arrive in the account. It takes two to three days for the process. While through hawala, the money reaches my doorstep within a few minutes”, said an expatriate who preferred not to be identified.

 

The Ministry of Expatriates’ Welfare and Overseas Employment (MEWOE ) blamed the fall in the remittance inflow on various reasons, including illegal hundi business as the main reason.  According to the ministry, many expatriate workers send money through hundi, an illegal way to transfer money, to get better rates. “This is one of the prime reasons behind the fall in remittance inflow,” said MEWOE Minister Nurul Islam recently while talking to journalists.

 

Many of the non-resident Bangladeshis (NRBs) are now increasingly switching over to mobile banking channels like 'bKash' and illegal 'hundi' operators to send home their remittances, a government survey revealed recently.

 

The mobile banking has become very popular in Bangladesh after its introduction in 2015. Remittances sent through it have swelled significantly in recent years. The Bangladesh Bureau of Statistics (BBS), in its latest survey, said, the mobile banking has become the second major conduit for sending remittance. The NRBs sent 14.31 per cent of their total remittances through mobile banking in 2015.

 

The Bangladesh Bank (BB) has allowed remittances through mobile banking revising the 'Regulatory Guidelines for Mobile Financial Services (MFS) in Bangladesh' in July 2015.

 

The BBS survey showed that the remittance inflow into the country through banking channel has dropped significantly as more remitters prefer 'hundi', an informal channel, to send their money home.

 

It said expatriate Bangladeshis sent 50.72 per cent of the total remittances 2015 through banking channel, which represented a 16.60 per cent decline over that in 2013.

 

However, the NRBs sent 12.31 per cent of the total remittances through 'hundi' in 2015, a 2.27 per cent rise over the last survey in 2013, said 'The Survey on the Use of Remittance (SUR) 2016" of the BBS, published recently.

 

In 2012, the NRBs sent 10.04 per cent of their total hard- earned money through hundi, the survey showed.

 

Hundi is an illegal way of sending money anywhere in the world. Usually, the government or the central bank cannot trace the money that is transferred through it.

 

The state-run statistical body BBS conducted the survey in 2016, the second of its kind, taking 10,451 samples among the country's all remittance-receiving households (RRHHs).

 

The BBS said a two-stage stratified random sampling technique was applied for conducting the survey.

 

Two lists were used as the sampling frame for this survey. One was the list of Primary Sampling Units (PSUs), the Enumeration Areas (EAs) of Population and Housing Census 2011, generated under Integrated Multipurpose Samples (IMPS) and the other was the list of five leading villages in each upazila in terms of adequacy of RRHH which were identified making a quick count of RRHHs in those villages, it said.