Promoting NRB investment

A recent interview in the Arab News, by Dr. Ghazi Al-Gosaibi the Saudi Labour Minister, disclosed some statistics with regard to the issuance of new visas to private sector companies during 2007 that deserve broader circulation.
For those who are familiar with demographic shifts in the GCC countries in general and Saudi Arabia in particular, are aware of the fact that over 70%+ of the growing Saudi population are below the age of 20, and this trend is likely to continue in the foreseeable future.
This growing "time bomb" is giving nightmares to the Saudi planners, and the emphasis over the last few years has been to find a mechanism to employ more Saudis through a massive program of "Saudiisation," and the 2007 statistics, therefore, are all the more compelling. Dr. Al-Gosaibi disclosed that there were 1.2 million new visas issued during 2007 and, interestingly, the single largest beneficiaries were Bangladeshis with 23.6 % of the total.
Indians came second with 18.61% followed by Egyptians who received 14.46%, the Filipinos 11.96% and Pakistanis 11.01%, and workers from 13 countries received more visas during 2007.
This is a huge vote of confidence in Bangladeshi manpower, both by the Saudi government and the private sector, and although the economics of hiring the cheapest labour may have been one of the principal determinants of this trend, the adaptability, hard work and reputation of the Bangladeshi labour force undoubtedly played a key role in the decision making process. We should all be very proud of this, and everyone connected with our manpower export policy deserves equal recognition.
The recent NRB Conference held in Dhaka undoubtedly was a pioneering initiative, but it is common knowledge that the vast majority of the participants, or people involved with this effort, were the educated elite who are residents of the developed countries.
The lower income section of the NRBs, who make up the majority of this equation, did not have any representation at all, and since they form the backbone of the foreign exchange remittance pipeline, it is time they receive the attention and recognition they so sorely deserve. With this objective in mind, I would like to put forward my views on two new initiatives that, in my opinion, will significantly contribute towards increased remittances from the lower income (but the higher volume) NRBs who are resident in the Middle East and the Far East:

Creation of an NRB
secretariat
With growing number of Bangladeshis heading out every year, it is time to consider setting up of a dedicated secretariat for the NRBs. This is something that will require high level of government participation and leadership, and must be led by specialists who are dedicated to the cause of common people. We do not have to look too far, nor do we have to "reinvent the wheel," because our neighbour India has successfully implemented such strategies for the NRIs for many years.
The three most important government organs that play the most active role in the life of the NRB are the Foreign Ministry, the Labour (Expatriate Employment) Ministry and the Bangladesh Bank and, ideally, honest and qualified representatives from these entities should form the nucleus of the initial NRB secretariat.
The primary function of the secretariat would be to play a "one stop" role by ensuring collective and coordinated efforts, and to channel all matters pertaining to the NRBs through a single source. This will streamline the process and will significantly reduce the burden of dealing with multi-dimensional rules, regulations and interests that are currently in place.
A mandate of this office would be to pro-actively initiate fact-finding missions to listen to the NRB's, so that the policies and guidelines it formulates will be more tuned to the needs and demands of the NRB's, and will be based on facts and ground realities. The NRB secretariat may eventually set-up dedicated desks at every Consulate where the numbers justify, and this desk may serve as a resource window while contemplating decisions on broader NRB issues/matters.

Create mechanism
to develop planned
neighbourhoods
To provide active support to the government's desire and objective to significantly increase foreign remittances, a key role for the NRB secretariat may be devising programs and investment opportunities that will supplement this initiative. One area where such a program is likely to generate rich dividends is in the form of selling land to the low income NRBs in every district of Bangladesh.
Every single NRB leaves Bangladesh with a "dream/wish list" and the first and foremost item on this list is to build a house. In absence of organised schemes, the vast majority of the people use their own family sources to buy mostly cultivable land and, over a period of time, they get enough land to build a house. This process is cumbersome, subject to manipulation by family and officials and, in a lot of cases and the end result is unsatisfactory. This has two very important side effects -- over a period of time, this consistent demand increases the value of land in villages to levels that become unaffordable and due to disorganised and haphazard nature of these purchases, a lot of cultivable land disappears from the market, thus further depleting our already limited supply of agricultural land.
This is where the government can play a pro-active role in developing planned neighbourhoods by identifying and selling either khas or private land (via land acquisition) to the NRB's through schemes similar to those in Dhaka, Chittagong and other main centers. This proposed scheme will encourage NRB's to buy government land and ensure a guaranteed and steady remittance through government nominated banks or other channels.
It is safe to assume that most lower income NRBs dedicate the vast majority of their savings to achieve their dream of home ownership and, since this is a bread and butter issue, there is very little likelihood of a default or interruption in this particular remittance pipeline.
One of the most significant impacts of this planned development will be in the form reduced dependence on urban living and, since the present CTG is re-activating the concept of the Upazilla Parishad, this entire process can be managed through decentralised local government structure.
Other very critical and positive impacts of this planned program would be in the area of environment and in the optimised use of scarce resources like electricity, water, sewage and other governmental support services.
There have been examples in the past of such planned developments by the private sector for low and middle income families in Mirpur and Pallabi areas of Dhaka, and if the government takes the lead in distributing the land through a planned program there are many in the private sector who will find the proposition of building such large scale "mini-cities" a very attractive financial proposition.
However, in the initial stage, the government may consider retaining an oversight and supervisory role to ensure quality and affordability and to protect the broader interests of the NRBs.
One of the most compelling factors in support of this initiative is the recognition that by the time an NRB returns to Bangladesh, he has cultivated and become used to a lot of modern-day habits and, in a majority of these cases, he finds village living under "old" conditions very difficult to adjust to, and this further contributes to his desire to relocate to an urban area.
By creating a congenial, self-supporting living environment for the millions of Bangladeshis at each district level, the government will not only strengthen the decentralised sector but will also ensure that the economic activity is localised and, therefore, there will be a healthy and sustainable environment for growth and prosperity for longer-term.
Major manpower exporters like the Indian states of Kerala and Karnataka have successfully deployed similar schemes to increase their foreign investments and remittances. Given careful planning, organisation and follow through, there is no reason why Bangladesh cannot replicate such a proven model.

Dewan Sadek Afzal, CMA, has been an NRB resident in Saudi Arabia for the past 25 years, and is the Executive Vice President & Chief Financial Officer of Traco Group in Jeddah. He is also the Chairman of Serve Foundation, a Bangladeshi-USA registered not-for-profit organisation dedicated to the cause of nation building.