Bangladesh has once again taken a spot among top ten remittance-earning countries on the back of an upgrade in the legal status of migrant workers in Gulf countries, according to a World Bank report.
The country is expected to receive $15.05 billion in 2014, enough to retain the eighth position it held last year, says the WB's Migration and Remittance Unit.
Bangladesh is seeing a rebound in remittances so far this year, mainly from the Gulf Cooperation Council (GCC) countries, mentions the report released on October 6.
“It appears that some of the problems pertaining to the legal status of Bangladeshi migrants in GCC countries are being resolved,” said Zahid Hussain, lead economist at the WB's Dhaka office.
Remittance is forecast to grow by 8.62 percent this year, a stark contrast to last year when it slipped 2.66 percent.
Growth in remittance to Bangladesh this fiscal year is likely to be better than the South Asia average of 5.5 percent if the remaining legal status problems are addressed and the freeze on Bangladeshi labour recruitment in Saudi Arabia and the UAE is lifted, he said.
In the first three months of the fiscal year, remittance shot up 21.85 percent whereas it declined 8.10 percent during the same period in fiscal 2013-14. Last month, $1.32 billion was remitted, up 28.63 percent year-on-year. As of yesterday, foreign reserves stood at $22.12 billion.
Furthermore, remittance costs appear to be heading downwards with the entrance of new players in the market, the use of technology to support digital payments and progress in expanding financial inclusion, the WB lead economist said.
India, with its emigrant stock of 14 million people, the world's largest, will remain in the top spot, attracting about $72 billion in remittances. It is followed by China, which is projected to earn $64 billion.
Pakistan too maintained its last year's ranking of seven with its forecasted remittance of $17 billion.
Remittances by international migrants from developing countries are on course for strong growth this year. But at the same time, forced migration due to violence and conflict has reached unprecedented levels, the report says.
Officially recorded remittances to developing countries are expected to reach $435 billion this year, an increase of five percent over 2013.
The growth rate this year is substantially faster than the 3.4 percent growth recorded in 2013, driven largely by remittances to Asia and Latin America.
Remittances to developing countries will continue to climb in the medium-term, reaching an estimated $454 billion in 2015.
Remittances remain an especially important and stable source of private inflows to developing countries, as they bring in large amounts of foreign currency that help sustain the balance of payments.
In 2013, remittances were significantly higher than foreign direct investment to developing countries excluding China, and were three times larger than official development assistance.
Quoting a recent survey, the report says average remittances to receiving households in Bangladesh are worth twice per capita income and equivalent to almost 80 percent of the receiving household's income.
The importance of remittance to Bangladesh is further underscored by their explicit inclusion in assessments by credit rating agencies, it adds.