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Remittance helps Bangladesh in keeping its economy stable during this global crisis

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By: Hafizur Talukdar

Remittance or expatriate income is one of the many sectors that depend on the amazing progress of the Bangladesh’s economy. According to government data, there are more than 12 million Bangladeshi workers in 168 countries of the world. When the money earned by sweat and labor comes to the country, we call it expatriate income or remittance. How important their remittances are for the economy of Bangladesh has been proven during the global pandemic caused by the coronavirus. Even in the current global unprecedented socio-economic-political crisis that started immediately after Corona, the foreign currency sent by expatriates is the biggest asset of Bangladesh.

This remittance shows our hope in the fear that has arisen about the future of the economy of Bangladesh after the neighboring country Sri Lanka was declared economically bankrupt in the recent past, after the global bankruptcy panic spread. The Global Knowledge Partnership and Development, a multilateral trust fund established by the World Bank, recently reported that Bangladesh received 22 billion USD in remittances or expatriate income in 2020. As a result, Bangladesh moved up one step from 2019 to seventh place in 2020 among low-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 developmental activities including business and trade, industrial production, schools-madrasas, mosques, hospitals. About 63 percent of remittance income is spent on daily consumption. The poverty of those families is being removed. In this time of dollar crisis, expatriates have kept hope alive; After July, 2022, growth in remittance flow increased in August as well.

On August 31, the second month of the financial year, 2.03 billion dollars came into the country as remittances, which is 12.58 percent more than last year’s August. 1.81 billion-dollar remittances came into the country in that month. Expatriates remitted $201.69 million in the first month of the current financial year in July, which was the highest in the previous 14 months. Compared to July of the previous year, the growth was about 12 percent.

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

The government and Bangladesh Bank have taken various steps to increase the flow of remittances. Expatriates do not need any documents now. As the dollar rate is high in the market, they are trying to reduce the cost and send more money to the country. And to discourage hundi, the process of increasing AD branches of 30 banks is underway. If the AD branch increases, buying and selling dollars will be easier. These things have contributed to increase the flow of remittances.

According to the Wage Earners Welfare Board, 6-7 lakh people from Bangladesh go to different countries every year. Every month 50 to 60 thousand people go abroad from Bangladesh. These expatriates send an average of $18 billion in remittances annually.  Bangladesh Bank announced the new monetary policy for the financial year 2022-23 on June 30, which said that remittances will be upward and will come in 15 percent more than last year in the current financial year. According to the latest data of Bangladesh Bank, expatriates sent an average of 70 million dollars per day in the 28 days of the fiscal year 2022-23, which began on July 1. In the last financial year, expatriates sent an average of 57.6 million dollars per day.

The dollar has been rising for months due to supply shortages. Apart from the banking channel, the dollar also reached a record high in the open market. The dollar rate in the bank rose to Tk 109 last month. It has decreased slightly and now it is trading at 106-107 taka. But a year ago, the dollar exchange rate was like 84 taka. The dollar rose to Tk 121 in the open market. In this context, banks are buying foreign currency at higher rates from foreign exchange houses to collect dollars. This has had a positive impact on remittances sent by expatriates.

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

Recruiting agencies are dependent on middlemen and brokers due to lack of proper monitoring and oversight by the government. Forced foreign travelers are also dependent on these middlemen. This situation needs an urgent end.

Work should be done from the beginning of expatriate life to alleviate the suffering of expatriates. Adequate flow of information about immigration should be ensured, so that common people do not fall into the trap of brokers. Human traffickers must be strictly dealt with. Care should be taken to eliminate brokers or middlemen. Adequate credit should be provided for expatriates. Programs should be taken to convert the labor force of the country into skilled labor force. They should be trained through various programs.

Priority should be given to the skilled to maintain the flow of remittances. Extreme suffering in coming and going to the airport should be removed. Separate channels should be established at the country’s airports for the movement of expatriates. They are the ones who must ensure all the necessary facilities in view of the vitality of our economy. Immigration costs should be reduced. In case of migration under bilateral agreement, the expenditure should be in the interest of the person going abroad. Over 10,000 diaspora wings should be established in diaspora-dominated countries in the next five years to alleviate their suffering in diaspora. Embassies and missions should serve the country and the economy with a sense of importance.

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

The writer is a school teacher in Bangladesh



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