Though it cannot be said that the economy is booming in the midst of the pandemic surge, it cannot also be said that it is performing badly. This has been possible, thanks to the resilience of two major hard currency earning sectors of the country --- export and inward remittance. Interestingly but not inexplicably, far from declining, as it was the general expectation, the past months have seen an upswing in the remittance receipts. In the just-concluded FY 2020-21, for example, foreign exchange earning from remittance was 36 per cent higher at US$ 24.78 billion than that of the previous fiscal. According to an estimate, the foreign remittance accounted for 6.6 per cent of the country's gross domestic product (GDP) in the FY 20. This trend in remittance inflow, whatever the reason, is definitely helping the economy. For the most important contribution of a sound foreign currency reserve is that it helps clear the import bills duly. This is good for the external trade as well as the image of the country before the rest of the world. Needless to say, the government incentives for the foreign remittance have definitely played a major role in its higher level of inflow. So, it is time the government thought seriously about controlling the use of the money so it may not be spent in the unproductive sectors.
Capital market is an area where the beneficiaries of the foreign remittance may invest their money. But at the same time, it has also to be admitted that stock market is quite an uncharted territory for many new investors. The secondary market, in particular, is a perilous one unless one has the necessary training or experience to operate there. In this context, it would be helpful for new investors including those possessing investable remittance money, if there were arrangements to educate and thus enable them to take informed decision on investing in the share market. Additionally, the government may introduce diverse saving instruments, such as in the form of bonds, where the remittance money might be invested by the beneficiaries. Such saving instruments provide the opportunity for optimal use of the liquidity circulating in the market arising from the rise in remittance inflow as well as other sources.
It is worth noting at this point that the stimulus packages that the government has been announcing from time to time have also a contributory role in creating the excess liquidity on which the banks are sitting. Side by side with plugging the holes through which the cheap public funds may fall into the wrong hands, the government should create more opportunities for productive investments of the money.
A word of caution-the existing robust flow of remittance, under any circumstances, should not be taken for granted. In truth, the unskilled workers cannot be a stable source of remittance in the long run. The situations for unskilled workers in the host economies will be gradually phased out with their workplaces going high-tech. As such, the sooner Bangladesh is able to produce skilled workers to meet the changing needs of the host countries, the better for an assured inflow of remittance. Against this backdrop, through private-public partnership, a massive skill training programme should be launched across the country. The imperative is to create an army of workers skilled in different trades with an eye to the emerging needs of the host economies.
