The Covid-19 fallout may result in a significant fall in the coming months in the inflow of remittance, considered the lifeline of many rural families. This, experts say, amid slump in export earnings, will be another big shock for the Bangladesh economy.
Almost all the destinations of Bangladeshi migrant workers from where they send money back home are grappling with the coronavirus pandemic. A halt in economic activities with closure of most business establishments and shops has left the wage earners at lurch.
The migrant workers who already returned home may join to the growing army of the unemployed people while many of those staying abroad may face uncertainty in earning a living due to the slowdown. Some migrant workers said they are going through tough times with almost no income and surviving on borrowed money.
As the Bangladesh economy is already under stress, experts fear, a possible decline in remittance will not only hit the country's foreign exchange reserves but also threaten livelihoods of millions of rural families that depend on remittances.
In 2019, over 10 million Bangladeshis who stay in different countries, remitted US $18.32 billion. The Kingdom of Saudi Arabia (KSA) has long been the largest source of remittances, followed by the UAE, Qatar, Oman, Bahrain, Kuwait, Libya, Iraq, Singapore, Malaysia, the US and the UK. According to Bangladesh Bank data, the country received $2.58 billion remittance from Saudi Arabia in eight months of 2019-2020 fiscal year, as against $3.11 billion during the same period in 2018-2019.
In the said eight months, Bangladesh received $1.74 billion from the United Arab Emirates (UAE), $996.11 million from Kuwait, $814.05 million from Oman and $739.38 million from Qatar. Besides, Bangladeshis remitted $1.53 billion from the USA, $987.28 million from the UK, $869.70 million from Malaysia, $547.16 million from Italy, $312.41 million from Singapore and $37.54 million from Germany during the same period.
But most of these countries are now witnessing economic slowdown due to the coronavirus shutdown. Experts said despite a reasonable inflow of remittances in first half of the fiscal year, the latest trend is not encouraging as it is declining since January 2020. Remittance may fall further in the coming months as the UK, the USA, Italy, Spain and some Middle East countries are likely to see economic recession.
Many Bangladeshis will face difficulties in capturing new overseas jobs. It is not certain whether the migrant workers who returned home will get back their jobs abroad.
Since it is a global problem, the government cannot do much in this regard. However, it needs to maintain constant communications with manpower importing countries through proper channels so that Bangladeshi workers can find jobs once there is normalcy.
Many Bangladeshi expatriates run small business in different countries. But they had to suspend operations of their hotels and restaurants, beauty parlours etc. due to the coronavirus-induced shutdown. Companies also closed their factories that severely affected migrant workers' income. So, it is feared that the remittance inflow might fall in the days to come.
Around 50,000 people go abroad every month from Bangladesh for jobs but their number came down to zero in the past two months. Resumption of manpower export is almost unlikely in the next few months. Those who are still staying abroad find it hard to send money to their families due to the Covid-19 situation.
If the coronavirus prevalence prolongs, more workers will be laid off from their jobs in the destination countries. Experts recommend currency devaluation and diplomatic initiatives to protect the interests of the migrant workers. Most of them are worried about how their families would survive in the coming days.
Sarwar Md. Saifullah Khaled is a retired Professor of Economics and Vice Principal at Cumilla Women's Government College, Cumilla.