Labour market needed to expand amid fall in remittances

The inward flow of remittance is going down as the country is failing to send more workers abroad to traditional labour markets and explore new markets. The country’s remittance inflow dropped by nearly 3.0 per cent to $13.83 billion in 2013 from $14.17 billion in 2012.

In fact, the latest drop in remittance occurred in line with predictions by the economists. They say if Bangladesh cannot send new workers abroad, there will not be significant growth in remittances. The migrant workers are now sending money home as per their maximum capacities and have little capacity to increase the flow.

BD-workforce in KSAThe falling trend in inward remittances is feared to cause an adverse impact on the country’s external sector from next fiscal year as imports have started rising, according to the economists. They stressed the need for coordinated efforts to boost manpower exports in order to retain the external sector stability.

The country’s present foreign exchange reserve is satisfactory, but it will deplete fast unless remittance receipts improve. Bangladesh has now foreign exchange reserve worth over US$ 18 billion which is equivalent to meeting more than 5.5 months of projected imports.

Appreciation of taka against dollar is the main reason for the fall in remittances. The dollar-taka exchange rate stood at Tk 77.80 during July-December period. It was Tk 81.4 during the corresponding period of 2012. Bangladeshi expatriates are watchful over taka-dollar relation. It is natural for them to see whether the currency depreciates or not.

According to the Refugee and Migratory Movements Research Unit (RMMRU) of Dhaka University, only 0.45 million migrants managed to go abroad for jobs in 2013, down by more than 33 per cent from 0.68 million in 2012, The gradual decline is accompanied the return of a large number of migrants.

Experts say the drop is a result of the government’s inaction in stimulating labour markets in Saudi Arabia, the United Arab Emirates (UAE) and Kuwait through diplomatic channels into accepting Bangladeshi migrants. If the country fails to come out of this continuous downtrend, the foreign reserves will fall significantly.

The reason behind the decline in remittance is that the total number of migrants going abroad is not growing like preceding years. For example, in 2013 the total number of migrants going for overseas jobs was 441,301. This was a 36 per cent decline compared to the numbers in 2012, which were 691,402.

The government was unable to resolve the problems related to the legal status of Bangladeshi migrant workers Saudi Arabia, UAE and Kuwait. As a result of which less number migrants are now going abroad and more are coming back to the country, leading to a decline in remittances.

Since remittance is an important contributor to Gross National Income (GNI), it is necessary to try to find ways to overcome the barriers and raise it. One way is through higher education and training of workers. Though the benefits of higher education and training can entail a time lag, the advantage in the long-run is obviously high.

Over the last few years, Bangladesh could maintain the status of a country with surplus balance of payment due to constant flow of remittances. Net foreign exchange earning through migration is 3.3 times higher compared to that from the readymade garments (RMG) and seven times more than the foreign aid received by the country.

However, another major issue of concern of migration trend is reduction in migration of skilled workers. In 2010, 40 per cent of those who migrated were skilled workers. In 2011 and 2012, the figure came down to 40.34 and 34 per cent respectively. This year it slid further to 20.08 per cent of total workers.

Almost all the labour sending countries, who took part in short-term contract labour market, made a good decision to reduce migration of unskilled workers as exploitation and violation of rights are higher in the unskilled labour market. Although the overseas employment policy of Bangladesh targeted promotion of skilled migration as one of its major objectives, one witnesses hardly any action plan to achieve that.

Working conditions of male and female migrants in destination countries are major areas of concern. Of course, working conditions of some of the companies in the receiving countries are quite good, yet low wage, non-payment of wage, contract substitution, unregulated working hours, risky work environment, unhygienic living condition, insecure movement, particularly of women garments workers, and absence of collective bargaining system characterise majority of the employers in the Middle East and a section of the Southeast Asian countries.

Bangladesh, like most other origin countries, did not deal with such issues effectively in 2013 out of fear of losing the market. In recent times, different regional migrant and human rights forums have taken up these issues seriously. But concerned government bodies of different ministries of Bangladesh just give a damn to these organisations rather than providing them with information on violation of rights of migrants.

Nevertheless, there are some issues which are directly linked with Bangladesh embassy services. A scrutiny of complaints placed by the migrants in 2013 show that 80 per cent of them are about timeframe required for renewal of passport, issuance of MRP passport, migrant—unfriendly locations of embassies, lack of availability of drinking water, waiting areas, toilet facilities in the embassies and unnecessary repeat visits. In general, labour attaches are blamed for such impersonal services of the embassies.

The majority of stakeholders supported government initiatives of government-to-government (G2G) deals with the aim of reducing cost of migration. But the arrangement has failed to yield its desired result. In fact, G2G experience of Malaysia has demonstrated that government mechanisms have limitations in pursuing job contracts with employers. On the contrary, the government has also failed to offer enhanced incentives for the expatriates to use formal channels to remit their hard-earned incomes.

Under the circumstances, efforts should be geared up to send manpower through the private national and international recruiters. The government needs to rethink and bring in necessary changes in its policy in order to boost the country’s manpower export.

– The Financial Express.


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