Challenges related to migration and remittances

Migration is an important feature of globalization and in Bangladesh it has become an important source of job creation and plays a central role in poverty reduction by balancing the balance of payments, increasing foreign exchange reserves, by increasing national savings, by increasing the speed of circulation of money, and thus contributing to the growth of the gross domestic product. It has become the second sector of foreign exchange earnings after ready-to-wear. The number of migrant workers was 6,087 in 1976, but currently stands at over 12 million and the total flow of remittances to Bangladesh stood at $22 billion in 2021. Bangladesh has become the eighth largest remittance receiving country and sixth largest migrant country. country of origin in the world, according to the World Migration Report 2022.

Remittances have become a dominant variable for the economic development of Bangladesh by incurring direct and indirect impacts on the economy at micro and macro level. For example, remittances contribute to raising the incomes of remittance-receiving households and their standard of living. Moreover, remittances help people generate income, provide children with advanced education, improve social status, create employment opportunities for the poor and empower women. On a larger scale, it increases investment in human capital, household consumption and also stimulates savings and investment. This not only benefits families receiving remittances, but also contributes to the growth of national income. It helps to support payment for imported capital goods and raw materials for industries.

Currently, the apparel sector dominates the economy of Bangladesh and the country generates around $30 billion worth of product every year by exporting garments, but after graduating from PMA in 2026, if the franchise opportunity is avoided, the country runs the risk of falling into the Dutch disease. The term Dutch disease appeared after the discovery of gas by the Netherlands in the North Sea in 1959. Initially, the Dutch economy began to prosper thanks to massive gas exports, but when the gas supply ceased, its economy became unstable and it had to go through an economic recession. This is because they had paid little attention to another alternative sector. So, if Bangladesh is to avoid the Dutch disease, the government must now pay due attention to finding and promoting an alternative sector, and migration could be one of them.

The export of labor has every potential to be the main source of Bangladesh’s GDP. The developed world is short of manpower and they need to hire more people to support development when we have a surplus population, and we can seize the opportunity and send people. As of 2017, around 66% of graduates are still unemployed in Bangladesh and if they can be sent overseas after completing vocational training, the economy can boom dramatically.

The International Labor Organization estimates that every year more than 400,000 workers leave Bangladesh for employment abroad. But millions are ready to be employed in foreign countries. The migration process from Bangladesh to foreign countries is complex, long and full of dangers. The actual average initial cost of migrating from Bangladesh is almost three times the official maximum price. The cost of migration from Bangladesh is the highest among South Asian countries.

Some measures have been taken by the government to help improve the situation. But still, many obstacles hinder the fluidity of this sector.

Lack of training, fraud in recruitment agencies, long and illegal migration processes and non-cooperation of embassies abroad discourage the potential flow of remittances. The ILO explored some of the issues faced by Bangladeshi migrants, including; high migration fees charged by recruitment agencies, especially for low-skilled jobs; low salaries, lack of information on migration opportunities and risks; discrimination, exploitation and abuse abroad; and insufficient services to protect workers’ rights. If the existing dominating factors could be eliminated, remittances would double or triple and Bangladesh could thus avoid the Dutch disease.

Md Mahmud Hassan Talukdar is an urban planner, policy researcher and development professional.

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