CPD raises flag over US turning into top remittance source
The Centre for Policy Dialogue (CPD) yesterday raised the flag over the US replacing Saudi Arabia to become Bangladesh's foremost source of remittance in the July-April period of the current fiscal year.
A vested quarter might be sending back black money, which they had earlier illegally taken out of the country, in the form of remittance availing an existing 2.5 per cent government incentive, said the think-tank.
A total of 9.22 lakh people went abroad for work during the first 10 months of the current fiscal year of 2022-23, which is significantly high, said Fahmida Khatun, executive director of the CPD.
A majority of these people went to the Gulf countries but the remittance flows from this region did not match this rising number, she said.
During this period, remittance coming from Saudi Arabia came down to $3.04 billion from $3.86 billion in the same period of fiscal year 2021-22, said the CPD's study.
Meanwhile, remittance from the US increased to $3.05 billion from $2.87 billion in the corresponding period of the previous year, said the CPD's study.
The trends in remittance flows do not match the growing number of migrant workers leaving for the overseas job markets, said Fahmida Khatun while sharing the CPD's review of the state of the Bangladesh economy at its office.
"Consequently, the trends in sources of remittance flows raise serious concerns," she added.
The rise in inflow of remittance from the US is unusual. Many people sell their homes and take the money to the US. Many students have studied there and they cannot send money home, said Fahmida Khatun.
"So where does this money come from?" she asked.
She believes this money was illegally earned and laundered abroad earlier and in recent periods was being sent back to the country in the form of remittance, thereby cleaning up its source, and in addition availing a 2.5 per cent government incentive on remittance.
"Money laundering is illegal and there is a tax structure in the country but they (vested quarters) are taking advantage of it using the mode of remittance," she said.
Fahmida Khatun urged the authorities concerned to delve deep into the matter and take appropriate steps.
"We don't see any reflection (in remittance flows) of the fact that about 21 lakh people went out of the country from January 2021 to April 2023," said Prof Mustafizur Rahman, a distinguished fellow of the CPD, at the event.
"It should be thoroughly investigated," he said.
The government should increase its institutional capacity focusing remittance instead of adopting the usual method of offering incentives through the budget, said the economist
It should also enhance its forensic capabilities and ensure effective measures on both the demand and supply side of money transfers, he said.
Besides, the volume of gold being brought in from abroad has risen significantly in the country instead of remittance through Bangladesh Bank, said Prof Rahman.
In 2020, around 5 tonnes entered whereas in 2022 it rose to 54 tonnes. In contrast, the country's annual demand is around 20 tonnes, he said quoting media reports.
"The money, which is supposed to improve the foreign currency reserves, is coming into the country through other ways and might be flying out to other countries," said Rahman.
"Why would the government not intervene?" he asked.
The economist also criticised the role of the government's financial intelligence unit was playing with regard to stopping money laundering and recovering money laundered abroad.
He suggested that the government sign bilateral deals with countries on issues such as recovery of laundered money and repatriating citizens being held as prisoners abroad.
Among others, Khondaker Golam Moazzem, research director of the CPD, and Towfiqul Islam Khan, senior research fellow, were present.