Macro-economic minders, policy planners and balance of payments monitors may be a little twitchy at the declining inward remittance by a sizable 11.15 per cent in 2016 compared with that of the preceding year. The fall is rather steep by US$1.71 billion. This is another wake-up call to shrinking spaces in the traditional job markets of Middle East, and perhaps to a lesser degree, in Southeast Asia.
The continual decline in oil prices on the global market, in no small part complicated by Saudi-Iranian tussle over keeping the nozzles open on oil productivity at the expense of depressing its prices, has had twin effects on overseas employments and earnings. In the first place is the emasculation of job markets in the Middle-Eastern countries, especially in their construction and service sectors. Around 80 per cent of Bangladeshi migrant workers under their employment, according to Refugee and Migratory Movement Research Unit (RMMRU)'s chairperson Professor Tasneem Siddiqui. Secondly, the salaries for whatever jobs available were reduced in the host countries. The crunch for Bangladesh is acuter for the high number of its workers being affected, let alone the fact that unskilled or semi-skilled workers had been low salaried compared with their counterparts from South or South-east Asia regions.
What is, however, inexplicable is the contradiction between the significantly lower remittance inflow in 2016 and the reported 35 per cent increase in the volume of migrant workers going to different countries in the same year. According to RMMRU statistics, the figure for Bangladeshi migrants in the year just gone by has been 0.75 million whereas it was 0.55 million in 2015.
There can be three explanations for the apparent contradiction between the increase in the volume of outward migration and the decrease in levels of inward remittance. First, their incomes had been drastically reduced; secondly, for reasons best known to the remitters, they have been sending in lower sums of money; and thirdly, they may be opting for routing their money through unofficial channel viz. the hundi. That it could be a reflection of money laundering evading taxes is something the senders ought to be sensitised about.
In this context, what Professor Wahidudin Mahmud, the noted economist and chairman, Economic Research Group (ERG), says finds a resonance with anyone serious and watchful about the capital flight dimension of the issue. One negative sign amid a whole lot of pluses we have inherited from the past year is the downward curve in remittances, possibly in part due to 'lower demand for our workers, or may be there's been cut-back on their salaries', observes the economist .
Where Dr. Mahmud, to my mind, hits the nail on its head is his expression of concern over the possibility of remittances skirting proper channels and straying into economy-sapping capital flight.
One would have thought that research organizations involved in the field would concretise their findings rather than be content with conjectures and surmises that does not help informed judgment, far less remedial action.
We can think of a two-pronged strategy to bolster remittance flows. The first one is what the Government and Bangladesh Bank are working for, namely facilitation and speeding up of inward remittances from different parts of the world in 2017. Already, it is said that the policy regarding drawing arrangements between overseas exchange houses and banks operating in Bangladesh has been relaxed. As part of such relaxation, security deposit for the drawing arrangement has been reduced from $25,000 to $ 10,000. At the same time, security deposit for Non-Resident Taka Account has been slashed from TK.0.50 million to TK0.20 million.
The second imperative is the much-talked-about, to a frothy level, but the least acted on. This centres on diversification of manpower export sources with skill training attuned to the demands of newly explored destinations. With climate change upon us and the burgeoning youth demographic to reap dividends from, we need to brave frontiers we had never thought of approaching before. Why not explore Africa, or Latin America, for that matter.
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