Bangladesh ended 2022 on a positive note despite fearing huge economic turmoil. Keeping inflation (which is decreasing now) and the energy crisis aside, Bangladesh has fared exceedingly well in terms of keeping things under control while a global economic downturn is being pictured.
The best news for the national economy, however, was that the year ended with remittance flow showing an upward trend after going down for months. Although the country earned a little less than in 2021, a record-high number of workers were sent abroad last year, which will certainly increase the remittance inflow in 2023.
NOTHING TO WORRY ABOUT A SLIGHT DROP: Last year, remittance inflow dropped slightly to US$ 21.56 billion from US$ 22.07 billion in 2021, which was not bad by any means if we consider other factors playing a role behind it.
Along with war-driven economic tension and a sluggish global consumer market, the internal dollar crisis, too, played a part in the fall in numbers. As money swiftly devalued against the dollar, the difference between banks and other open-source exchange rates rose, leading to more money being sent home through illegal sources like Hundi. However, Bangladesh Bank's tightened monitoring and the introduction of a single exchange rate for the banks have paid off, as the year ended with an upward inflow. As per Bangladesh Bank data, remittance inflow rose by 4.23 per cent in December 2022 to US$ 1.7 billion from US$ 1.63 billion in the same month the previous year.
The country sent 11.25 lakh workers last year, surpassing the previous record of 10.08 lakh in 2017, according to data from the Bureau of Manpower, Employment and Training (BMET). This is a huge turnaround if we consider the pre-Covid period when around 60000-70000 workers left the country searching for jobs; last year, the number averaged above 93000 workers a month.
BEHIND THE SURGE: Experts see some valid reasons behind this rebound of overseas employment. The prime reason could be Saudi Arabia, the top destination for Bangladeshi workers, increasing Bangladeshi migrants' quota from 25 per cent to 40 per cent. Also, Malaysia opened its labour market in December 2021 for 5 years, impacting the overall growth. On the other hand, the Gulf states have always been a popular destination for BD workers where the economy took off high as the oil prices rose throughout the year.
"The labour market is growing. A large labour market is emerging in China. Besides, workers are now going to Romania, Greece, and Italy, and we are also planning to send workers to Libya," said Expatriates' Welfare and Overseas Employment Minister Imran Ahmed to the journalists at an event last week. He also mentioned that the government is planning to send 15 lakh labourers this year, eyeing more remittance inflow.
The increase in the number of workers going to South Korea will further boost Bangladesh's remittance inflow. A record 5891 workers went to South Korea in 2022 - a country where the minimum legally guaranteed wage is USD 1420/month.
Although the Russia-Ukraine war is showing no sign of ending, and economists continue to warn about a depression, 2023 is expected to fare better than 2022, leading to a huge number of blue-collar jobs in the developed economies. And developing nations like Bangladesh can benefit from this greatly. Also, remittance inflow is sensitive to several external catalysts. Around 60 per cent of Bangladesh's remittance comes from Middle East countries, which is impacted by oil prices. As oil prices are expected to rise this year, it is another good news for Bangladesh's remittance earning probabilities.
Note that the number of temporary migrant workers has increased by leaps and bounds after Covid. And the government's introduction of a 2.5 per cent cash bonus for sending money home is expected to encourage the migrant workers to remit more.
NUMBER OF WORKERS NOT PROPERLY REFLECTING ON EARNING: However, the main issue is with quality. Countries taking foreign labour still consider Bangladesh a low-skilled workforce provider. Refugee and Migratory Movement Research Unit's (RMMRU) data revealed that 74 per cent of the workers who migrated from Bangladesh in 2021 were low-skilled to unskilled. This is hurting the country's potential to earn a great deal of foreign currency.
Even in the Middle Eastern countries, from where we get the lion's share of our remittance, most Bangladeshi workers are employed as domestic workers, cleaners, security guards, or in construction jobs, all of which are low-paying. Semi-skilled workers are comparatively better paid, working as plumbers, electricians, etc. International Organisation for Migration (IOM) data shows that a Bangladeshi expatriate's average earning (US$ 203.33) is half of a Filipino worker's average earning (US$ 564.1). Our South Asian peers India (US$ 395.71) and Pakistan (US$ 275.74) fare better than us.
Government data show Bangladesh sent 1.3 crore workers abroad between 1976 and 2021. Against this huge number, Bangladesh's remittance inflow is lower than its neighbour India-- the highest remittance earner globally. The country earned USD 100 billion last year from a diaspora of 3.2 crores worldwide.
NEED-SPECIFIC SKILL DEVELOPMENT REQUIRED: On the other hand, Bangladesh also needs to increase the number of labour in top-paying nations like the USA, UK, Italy, Germany, and other European countries. For this, upskilling the workers is the only way. A study by the Bangladesh Institute of Development Studies (BIDS) identified 15 professions that would be paid highly in overseas markets in the coming days. Along with doctors, computer engineers, and civil engineers, there are demands for nurses, electricians, welders, shipbuilders, mechanics, plumbers, hotel staff, drivers, masons, etc. While the white collar category depends on the higher education, proper vocational education and training can lead the way for Bangladeshi workers in the other options.
The Bureau of Manpower, Employment and Training (BMET) has to be strengthened and upgraded with more financial allocation and technical abilities to train aspirant migrant workers. Also, as the country is driven toward a digital nation-building goal, the government should run a digital database for labour market information that would provide valuable data and predict future market needs so that the workers can shape themselves accordingly.
THINKING ABOUT THE 'SOLUTIONS OF TOMORROW': An integrated regulatory mechanism with global standards needs to be introduced to ensure local workers' competence. Also, local skill certificates that are in use currently aren't valued in the overseas job market. The lack of both regulation and standard certification creates a mismatch between available jobs and skills offered. Whatever number of training facilities we have, these too need to be up-graded according to global job market demands.
Apart from self-prompt initiatives, Bangladesh can think about multi-stakeholder involvements and partner up with the top destination countries to ensure the exact skills those countries would need.
ROLES OF THE FINANCIAL INSTITUTIONS: Along with providing necessary upskilling platforms, aspirant migrant workers' overall well-being should be ensured. Banks and other financial institutions can play a role here, providing innovative and secure financial products and services to them. These offerings should cover their travel and settlement-related costs, saving them from local manipulators and informal markets at high-interest rates. Since its inception in 2010, the Probashi Kallyan Bank (PKB) has allocated around 1800 crore Taka to over 98,754 migrant workers. Other banks also have financed the workers but to a limited extent.
As the government is eyeing bigger remittances, now is the time to increase the limit. The government can introduce incentives for banks as well for financing more migrant workers.
Overall, the whole migration process should be made easier and more secure to let more workers travel abroad and ensure safe, legal channels to send money home. It'll not only ease the impending trade-deficit rise caused by the acute dollar crisis but also help the country's reserve go up to a safe and secure level.
Tareq Ahmed Robin is an entrepreneur and industrial management expert.