Feb 24
Manpower Export Hits All Time High PDF Print E-mail

By Ziaur Rahman

Remittance has become one of the most important economic factors for the country’s economy. It plays a significant role in reducing poverty, helps finance trade deficit and keeps the forex reserves healthy.

 

The inflows of remittance, the second highest revenue earnings after exports, have increased nearly 7 times over the last one and half decade since the year 2000, from US$ 1.954 billion to US$ 1.36 billion in 2017.

 

The country also made a record in manpower export by sending 1.008 million workers abroad in 2017 from 0.222 million (222,686) in the year 2000. After successful increase in manpower export last year, the government now plans to send 1.2 million workers abroad this year (2018).

 

“More skilled workers will be included among them to increase remittances this year, ” said Expatriates' Welfare and Overseas Employment Minister Nurul Islam while addressing a press conference on migration trend of 2017 at his ministry office at Eskaton on January 10. "We will give more emphasis on quality than quantity in the migration," said the minister.

 

Despite a significant rise in overseas jobs of Bangladeshi nationals, the inward remittance flow remained in negative territory in the just-concluded year. The remittance inflow fell by 0.53 per cent or US$72.46 million to $13.54 billion in 2017 from $13.61 billion a year before.

 

Inflow of Remittance dropped to a six-year low as many expatriate Bangladeshis sent money home through illegal channels. Bankers and experts attributed the reasons mainly to using unofficial channel in sending remittance. The migrant workers, according to them, opted for the illegal channels like hundi for most part of the year because of a lower rate of the dollar against the taka.

 

Remittance inflow, however, accelerated in the last few months of the year (2017) as the local currency depreciated significantly against the greenback but still failed to offset the decline to lift the full-year earnings above the 2016's. According to officials, the flow of money remitted by the expatriates still stayed in the negative zone despite a rising trend in the second half (H2) of last year.

 

Bangladeshi overseas workers sent $6.93 billion during the July-December period of 2017 against $6.17 billion in the same period of the previous year. The remittances increased in the second half of 2017 following higher exchange rate of the US dollar against the local currency alongside the strengthening of monitoring by the Bangladesh Bank (BB) to curb illegal fund transfers, said officials of the central bank.

 

The local currency depreciated by more than Tk 4.0 against the dollar in the last one year for the purchase of the greenback from remitters -- officially known as TT (Telegraphic Transfer) clean. Depreciation of the Bangladesh Taka (BDT) against the dollar contributed to the upturn in the inward remittances in the recent months.

 

"In 2017, the government earned around US$ 13,527 million - equivalent to Tk1, 10,247 crore as remittance sent by expatriate Bangladeshis working in 165 countries across the world,” said the minister.

 

The Expatriates' Welfare and Overseas Employment Ministry blamed the fall in the remittance inflow on various reasons, including illegal hundi business and a drop in the oil prices in the Middle East.

 

 

BB, Govt joint efforts

 

Bangladesh Bank, on numerous occasions, expressed its concerns over the decreasing flow of remittance, which is one of the main driving forces behind the country’s economy.

 

The central bank and the government are now working together to expedite the flow of inward remittance from different parts of the world, as it is one of the two biggest contributors to Bangladesh's foreign-exchange reserves. The other one is garment export.

 

As part of the moves, the central bank had already asked the banks for taking different measures to attract NRBs (Non-Resident Bangladeshis) through improvement in the quality of remittance services.

The Bangladesh Bank is also contemplating reduction of transfer fee for remittance a view to encouraging the NRBs to send more remittances through banking channel.

 

It also instructed the banks to open 'helpdesk' at each branch concerned for ensuring better remittance services. The banks will have to ensure providing information on remittance to the beneficiaries on priority, according to a notification issued by the BB recently.

 

Bangladesh Bank is now concerned about the declining trend of remittance flow. The central bank at a meeting few months ago discussed the issue and is likely to take decision to cut the remittance transfer fee so that remittance flow goes up in coming days.

 

Speaking on the issue, former executive director of Bangladesh Bank Subhankar Saha said: “The Bangladesh Bank, the government, and the commercial banks have taken some initiatives to boost remittance. Which in turn has inspired Bangladeshis living abroad to send money to home using legal channels. “I am optimistic that the dip in remittance will not exist long.”

 

However, some of the officials in central bank and the ministry said that the inflow of remittance has improved after a curb in illegal mobile banking and an increase in the price of US dollars. Initiatives taken by the central bank are also helping this sector to improve.”

 

Earlier, Finance Minister AMA Muhith announced a number of steps to boost remittance, including withdrawal of charges. The Bangladesh Bank also took a strong stand against illegal banking.

 

The remittances from Bangladeshi nationals working abroad were estimated at $1.17 billion in December last, down by $47.57 million over the previous month. In November 2017, the remittance was $1.21 billion, the BB data showed.

 

Currently, 29 exchange houses are operating across the globe along with 1190 drawing arrangements set up abroad to expedite the remittance inflow, according to the central banker.

 

A total of 10,08,525 workers went abroad with employment in 2017, of them 122,000 were women, according to the state-run Bureau of Manpower Employment and Training (BMET) latest statistics. The growth in employment was about 33 per cent in 2017 compared to that of previous year. Some 757,731 outbound workers secured jobs abroad in 2016.

 

Since 1975 to 2017, total 11.46 million (11,464,943) Bangladeshis went abroad with employment and   earned around Tk 12.35 trillion (12,35,606 crore). Among the Bangladeshi migrants employed in various countries, some 5 51,308 were sent to Saudi Arabia, 99,787 to Malaysia, 89,074 to Oman, 82,012 to Qatar and 49,604 to Kuwait.

 

A total of 1 21,941 Bangladeshi women have so far gone to various countries including Saudi Arabia, Jordan and Oman with overseas jobs. Of them, 83,354 were sent to Saudi Arabia, 19,872 to Jordan and 9,199 persons to Oman.

 

The process of signing agreements to send workers in United Arab Emirates (UAE), Japan, Mauritius and Russia are also on their final stages, said the minister. The government also plans to bring all the expatriate workers under insurance coverage.

 

Remitters losing interest in formal channel

 

According to sources, there is a growing tendency among expatriate Bangladeshis living abroad to send money through informal channels like mobile banking, Hundi etc. These informal channels have greatly impacted the formal banking channel which has resulted in a huge fall in remittance inflow.

 

Many alleged that the tendencies of taking bakshish or even bribe by bank officials and staff especially in local areas, client harassment and a lengthy process of money transfer, low exchange rate with high transfer fee and staff’s misbehavior with clients are the key factors behind people’s loss of interest.

To offset the impact and attract the NRBs in sending money home through formal channel, bankers also recommended the government recently for providing incentives through banks to the beneficiaries of remittance.

 

The bankers put forward the suggestion at a meeting at Bangladesh Bank headquarters that runs counter to a finance ministry proposal in reducing the remittance cost -- providing incentives to the exchange houses at the senders' end, if necessary. The ministry had also requested the central bank to examine other ways of reducing the cost and attract the remitters to the formal channel.

 

A government survey found that NRBs are now increasingly using mobile banking channels like 'bKash' and illegal 'hundi' operators in sending remittance to home. 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 a survey said that 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 in 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 latest BBS survey showed that foreign exchange transfer through Western Union and MoneyGram dropped by 4.14 per cent to 8.52 per cent from 12.66 per cent from the last 2013 survey report. Besides, the NRBs send 5.45 per cent remittances through friends and relatives, 3.85 per cent through known persons, 0.21 per cent through post offices and 0.48 per cent by others, the latest survey showed.

 

 

High migration cost, middlemen influence

Experts and industry people identified political and economic instabilities in Middle Easter countries, high migration costs, harassment by middlemen and visa trading are some of the major challenges the country facing in boosting job opportunities for its workers.

 

According to a study conducted 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 percent failed to go abroad after paying a part or full amount of money while 32 per cent experienced fraudulence in the destination countries. The study found that each of the total 693 households had lost Tk 243,247 being victim of fraudulence while processing migration.

 

Because of involvement of a section of dishonest sub-agents in the manpower sending process, workers fall victim to fraudulence regularly, said RMMRU founding chair Tasneem Siddiqui while releasing findings of the study. The RMMRU also urged the government to introduce a mechanism to identify sub-agents to check their malpractices. RMMRU under the PROKAS project of British Council carried out the research on the role of dalals (sub-agents) in the migration process.