No measures to drive up remittance

The government has not come up with any new measure in the proposed national budget to encourage remitters despite a sluggish growth in remittance inflow in the outgoing fiscal year.

Instead, the government has kept unchanged the 2.5 percent cash incentive for remittance.

In his budget speech, Finance Minister AHM Mustafa Kamal on Thursday said the cash incentive would encourage expatriates to remit their earnings through formal channels.

He said remitter-friendly processes are being promoted. "Thanks to these initiatives, our remittance is increasing."

The country received $19.41 billion in remittance during July-May of outgoing fiscal year, a 1.13 percent rise from the amount remitted at the same period in the previous fiscal, according to Bangladesh Bank data.

After the introduction of two percent cash incentive in July 2019, the country saw a 10.87 percent growth in remittance.

In 2020-2021, the country saw a staggering 36.10 percent growth in remittance amid the Covid-19 pandemic.

The government had credited its measures with this growth. Experts, however, said the growth came as hundreds of thousands of returnee migrant workers sent their savings home after losing jobs abroad.

As inward remittance started to decrease, the government increased the cash incentive from two percent to 2.5 percent in January last year. This was also aimed at further encouraging remitters to use formal channels.

However, the country saw the remittance income decline by 15.12 percent in 2021-2022.

Bangladesh last year sent abroad about 11.35 lakh migrant workers, shows data of the Bureau of Manpower, Employment, and Training (BMET).

Of them, about 78.64 percent lacked skills, according to a report of the Refugee and Migratory Movements Research Unit.

In the first four months of this year, another 4.01 lakh Bangladeshi workers flew abroad for jobs, says BMET.

Syed Saiful Haque, chairman of Warbe Development Foundation, said a lack of skilled migrant workers and the migrant workers' preference of informal channels are depriving the country of a good amount of remittance.

He said apart from incentivising migrant workers to send money through formal channels, the government should monitor and track down those involved sending remittances through informal channels to ensure robust growth in remittance income.

"This will help the government address the foreign exchange reserve crisis," Saiful told this newspaper over the phone.

He also suggested improving the migrants' skills training programmes and making separate allocations for different ministries concerned to ensure their welfare.