Swinging remittances back into high gear

One out of every 10 individuals migrates out of his hinterland for either economic sustenance or want of a better life. Globally, there are 232 million international migrants in 2013, up from 175 million 13 years ago. The recent World Bank report cites that international migrant remittances to developing countries are estimated to have reached $404 billion in 2013. These remittances far exceed the foreign aid received by many developing countries.

Xpress-MoneyOne such country is Bangladesh, for which the remitted money not only helps in domestic maintenance and development of the families of migrants, but also aids in balancing the BoP and enhancing the national savings of the native land. In 2013, Bangladeshi migrants have remitted $ 14,461.14 million to the country and these remittances were equivalent to 84 percent of garment exports.

Historically, there is a relative surge in remittances during the Gregorian month in which Ramadan starts. “Remittance inflows increase during the holy month, which concludes with the festivities of Eid-ul-Fitr. Last year, remittances in July were USD 1238 million registering an increase of 17% as compared to the previous month. Expats send in more money to their families for Eid and Ramadan related spending such as Eid presents, zakat and sometimes home renovation,” said Mr. Shamim Ifthakhar, Country Manager-Bangladesh, Xpress Money.

As per the World Bank report, Bangladesh is the 8th largest remittance receiving country with a significant contribution by expatriate female workers. “Bangladesh is witnessing a positive trend in more women migrating overseas and increasingly playing a critical role in the economic development of the country. Approximately 13 percent women expats are going abroad from Bangladesh with attractive jobs in various sectors such as healthcare, housekeeping, garment manufacturing, plantation & agriculture etc.,” he added.

Talking about the skill-set of the migrant workforce, he said “Initially the demand for blue-collared workers to work in the infrastructure development projects was high and this is expected to increase due to upcoming events such as Expo 2020 in Dubai and FIFA World Cup in Qatar. However, in the recent years, the demand for white-collared workers in the retail and service sectors has increased in these countries as well as in countries such as US and the UK.”

In Bangladesh, the recent fall in remittances stems from a combination of factors including migrants returning from abroad due to strict labors laws of the destination country, lesser migration due to high remittance costs and the appreciation of the Bangladeshi taka against the US dollar. However a rebound is projected in the coming years as the government is accelerating migration to new countries under the Government-to-Government system while working towards reducing the migration cost. Organizations such as BMET and BAIRA are training the migrants for skill enhancement so that the ensuing impact will swing remittances back into high gear.