Govt measures behind surge in remittance: Kamal

Finance Minister AHM Mustafa Kamal yesterday gave credits to the government's 2 per cent cash incentive for the recent surge in remittance.

Migrant workers sent home $1.96 billion in August, up 36 per cent year-on-year. They remitted $2.6 billion in July, a record for a single month.

"In the last two months, we received a huge amount of remittance that is worth six months," the minister told reporters.

Kamal said he ran a study on the remittance flow when he was the planning minister, from 2014 to 2018.

"We found that 51 per cent remittance enters the country through legal channels, while the rest 49 per cent via informal channels."

This prompted the government to introduce a 2 per cent incentive on remittance in the last fiscal year.

The government has also removed complexities beneficiaries had faced while receiving the money.

"A lot of questions were asked in the past. Now, no question is asked. The flow of remittance is increasing because of proactive measures from the government," Kamal said.

Like remittance, exports would also increase in August, Kamal said.

"This increase in remittance and exports would continue."

Exports fetched $3.9 billion in July, up 44.4 per cent from the previous month and 0.6 per cent from a year earlier. The exports data for August has not been released yet.

According to experts and bankers, migrant workers sent more money in recent months as the pandemic has wiped out the livelihoods of their relatives back home. The recent floods also prompted them to remit more. 

The surge in remittance flow came despite gloomy forecasts from multilateral organisations owing to the coronavirus pandemic.

For example, the Asian Development Bank said Bangladesh would be among the five worst developing Asian economies in terms of remittance inflows.

In the worst-case scenario, Bangladesh's remittance will decline by 27.8 per cent from its 2018 level.

In 2018, Bangladesh received $15.5 billion in remittance.

In April, the World Bank forecast that remittance flow to Bangladesh may plunge by as much as 22 per cent this year because of the ongoing pandemic.

Remittance hit an all-time high of $18.2 billion in the fiscal year 2019-20, up 10.87 per cent year-on-year.

There are about 1.3 crore Bangladeshis working abroad, whose transfer back home has become a pillar of strength for the economy.

The rising flow of remittance took the country's foreign currency reserves to an all-time high of $38.48 billion on August 26, Bangladesh Bank data showed.

Remittances account for 60 per cent of income in households with international migrants.

Forty-one per cent of households with at least one family member engaged as a migrant worker would be in poverty without remittance, said Stefano Paternostro, practice manager for social protection and jobs for South Asia at the World Bank, in September last year.