How USA becomes top remittance source beating Saudi Arabia
The USA has once again become Bangladesh's top source of remittance surpassing Saudi Arabia although the Middle Eastern nation has four times higher number of Bangladeshi workers than the North American country.
Some five lakh Bangladeshis live in the USA whereas the number is as high as 20 lakhs in case of the Kingdom of Saudi Arabia.
In the October-December period of 2022, remittance sent home by the Bangladeshis from the USA rose by 16 per cent year-on-year to $966.89 million, according to Bangladesh Bank data.
But the money remitted by the migrants in Saudi Arabia declined by 19.5 per cent year-on-year to $910 million in the same period.
In July-September Quarter of 2022
The USA was also the top remittance sender for Bangladesh with $999.76 million, posting a 16.5 per cent year-on-year rise in the July-September quarter of 2022. Saudi Arabia stood also second here.
But it is worth mentioning that the money remitted from the Kingdom decreased by 23.4 per cent year-on-year to $999.01 million in the three months to September.
What Experts, Economists Say
Experts and economists gave different explanations when they were asked why the inward remittance to Bangladesh from the KSA is declining and how the USA is consistently topping the list.
A foreign ministry official said the income of Bangladeshis is much higher in the USA than that of a migrant in the Saudi Arabia or other Middle Eastern or Southeast Asian countries.
"One day's income of a Bangladeshi in the USA could be even equal to one month's salary of a Bangladeshi in Saudi Arabia," the official said seeking anonymity for not having the permission to talk to the media.
Besides, a big chunk of the Bangladeshi Americans has family connections, who keep sending money to their relatives or making investments here in the south Asian country, the official said.
"The remittance could have been even higher from the USA given that there were flexible regulations for investments."
According to Bangladesh Bank data, remittances coming from the USA was 20.06 per cent of Bangladesh's total inflow of $4.82 billion in the three months to December 2022.
On February 18, Bangladesh Bank released the data in its quarterly report on remittance inflows.
However, the overall remittance inflow declined 0.22 per cent year-on-year to $4.82 billion in the period mentioned in the report.
Inflow of remittance, one of the key pillars of Bangladesh economy, fell 15 per cent on quarter-to-quarter basis too.
Kuwait, Qatar, Malaysia, Oman
In the BB report, the United Arab Emirates and the United Kingdom came up as the third and fourth biggest sources of remittance for Bangladesh followed by Kuwait, Qatar, Malaysia and Oman.
In the last three months of last year, Saudi Arabia hired 98,765 Bangladeshi workers, the highest or 37.8 per cent of the 261,134 people who left the country for jobs.
Malaysia, Oman, the UAE and Singapore were the next top employers of Bangladeshi workers after the Saudi kingdom by hiring 17.13 per cent, 16.9 per cent, 6.93 per cent and 6.19 per cent of the total respectively.
Hundi Is To Blame For
However, Professor Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue, has somewhat a different explanation.
The use of hundi, an informal way of remitting money, in the Middle East has increased in recent times and it normally spirals during election years, he said.
"A strong syndicate of corrupt people, including loan defaulters, tax dodgers, are laundering money to these countries. This trend has increased in recent times."
This is one of the factors why remittance from these countries is lower, the economist said.
"About 14 lakh people went from Bangladesh to Saudi Arabia in the last two years. But there is no reflection of it in remittance. This means that the syndicate is now more powerful than ever."
There are many laws in Bangladesh to curb money laundering, but the admin should be stricter at the time of their application, Rahman said.
Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said there is no way of informal money transaction in the USA, but it is rampant in the Middle East.
That is the only reason why the remittance from the US is higher, he said.
On the other hand, hundi is widely used in Saudi Arabia, which is why the remittance inflow to Bangladesh through formal channels is low, he said.