Bottom Line
Putting remittances to better use
THE remittances from migrants contribute significantly to Bangladesh's socio-economic development. They have a multiplier effect, not only for the family members but also for the people in general.
It is reported that about 5 million Bangladeshi workers are now abroad, spread out in almost 100 countries. It is reported that about 92,000 found employment overseas last January, and that is a good record. Last year, about 832,000 Bangladeshi workers found employment abroad. 85% of Bangladeshi workers go to the Middle Eastern countries.
The number of women workers reportedly stood at 74,074 as of August 2007, according to Bangladesh Manpower Employment and Training Bureau. Of them 54,835 left the country in the last three and half years.
Some say that the figure will be more because many unauthorised agencies in the country are sending women workers abroad (only seven recruiting agencies are authorised by the government to send women workers).
It is reported that among the total expatriate workers, 6% constitute female workers.
Total remittances
Remittances from migrant workers crossed over $6 billion in 2006, contributing 8.7% of the Gross Domestic Product (GDP) of the country. It is the second biggest foreign exchange earner for the country after the export earnings of garment sector that contributes 12.7% of the GDP.
This year, about $7 billion are expected from remittances. By 2015, the target is about $30 billion, and right strategies must be put in place to meet the goal.
Remittances are influenced by wage rate, exchange rate and relative interest between the sending and receiving states, and easy availability of facilities for remittances.
The interesting part is that semi-skilled and unskilled workers send money to their near and dear ones regularly, while the professional and educated migrants hardly send money to their families. Rather, they transfer money from Bangladesh to their places of residence abroad.
Why people migrate
Migration is a social process that is historically seen in a politico-economic context. During the 16th and 17th centuries, Europeans migrated to new countries such as America, Australia, Latin America and Africa for better quality of life and opportunity.
Some reasons for migration are:
(a) Economic and demographic factors.
(b) Civil wars and discrimination towards minority community.
(c) Promotion of entrepreneurial skills.
(d) Opportunity known to be available in foreign countries.
A study for Britain's Department for International Development found that three-quarters of African immigrants have university education, and roughly half of Asia's and South America's. Of the one million Indians living in the US, three-quarters of them have a university degree.
In future, the number of migrants from developing countries will increase because of the ageing population in the industrialised countries.
According to a report, in the next 30 years, the labour force in Germany will shrink from 41 million to 21 million, and in Italy from 23 million to 11 million. Japan will require about 90,000 a year, falling to a longer-term figure of about 700,000 a year.
Undocumented workers
The undocumented workers, otherwise known as illegal workers, contribute to the economy of the receiving countries. But they have no legal protection and they suffer from low wages, harassment and humiliation in the receiving countries.
Although they are engaged in jobs that are known as 3-D jobs (demanding, dangerous, and demeaning, or dirty, dangerous and difficult), they are not covered by the 1990 UN Convention on the protection of rights of all migrant workers and members of their families because the receiving states have not ratified the Convention.
The Convention enjoins state-parties to ensure that the working and living conditions of undocumented workers should not be less favourable than those of national workers for the sake of health, safety, fitness and human dignity.
Bangladesh, together with other migrant-sending countries, may robustly campaign within the UN and other international and regional forums for the ratification of the UN Convention by the labour-receiving countries.
Suggested strategies
The thumb rule is, the higher the skill of the migrants, the bigger the remittances will be. The question is; how can the emerging labour market be captured by Bangladeshi workers? Many experts suggest that three essential strategies, among others, need to be put in place to meet the goals.
First, English-language, or foreign language, skill has to be imparted to migrants. Second, the establishment of vocational schools in the country so that well-qualified trades-people, such as carpenters, auto-mechanics, air-conditioning technicians, joiners, masons, plumbers, and electricians can migrate overseas as there is a huge demand for trades-people in industrialised countries. Third, health care workers need to have international standard quality of education and training as they are in great demand.
Furthermore, women workers need training before they leave the country. Often, they are misled and abused by unauthorised agencies. Many of them fall victim to cheating, and they are not provided with the jobs they are promised.
In the government sector, there is, reportedly, one training centre in Mirpur and six centres have been set up in divisional level. Many more centres need to be set up, especially in the private sector.
These strategies could be in place through the joint initiative of government and private sectors. Bangladesh may derive benefit from the experience of the Philippines.
Remittances and certain open questions
Although remittances have grown to become a central factor in the domestic economy, the following issues need to be further investigated:
-How can government improve on incentive schemes to channel remittances to productive investments?
-Is there a role for micro-finance institutions in linking formal remittances to development?
-Is it feasible to pool migrants' savings and form mutual or pension funds?
-How can one bring about improvements in the existing banking network in its ability to compete effectively with informal arrangements?
-Has there been any assessment in the context of the hypothesis that incentive schemes tend to meet with limited success when other relevant micro-economic factors are unfavourable?
-How does a financial crisis affect the issue of remittances?
-How to stop leakages of about 20% remittances through unofficial channels, despite various policy initiatives to steer remittances toward the formal banking or post office sectors?
The subject of remittances is, in the final analysis, inseparable from the broader issues of mobility of labour, ageing population in many industrialised countries, and international migration, such as the number and characteristics of migrants and the rates at which they return home.
The migration issue is not all about control of immigration but an issue of the 21st century, when demand for young workers will increase in the industrialised countries. Accordingly, there must be a sensible policy in which both sending and receiving countries may reconcile their interests for peace and harmony in the world.
Bangladesh, with its younger population, must seize the opportunity to send skilled workers to industrialised countries. The need for coordination and cooperation between government and private sectors is imperative. Hopefully, all stakeholders will rise to the occasion to have a compact with regard to smooth migration.