There has been a slump in remittances globally and this picture is dismal in Bangladesh. Where the rest of the world has seen an average 2.4 per cent decrease in remittances, for Bangladesh it has been a 14 per cent fall. This is alarming because our main source of foreign exchange is remittances sent in from overseas. This is even more than our total loans and foreign investment. Last year, overseas Bangladeshis sent back USD 12.76 billion to the country.
It is not as if the number of Bangladeshis going abroad on employment has lessened. Last fiscal over 700,000 Bangladeshis went to work in the Gulf states alone. This is 54 per cent more than the preceding year. However, remittance hasn’t increased in that ratio. In fact, remittances in 2016-17 were nearly USD 2 billion less than the previous fiscal. Our remittance slump has been the most from the US. Inflow of foreign exchange has also dropped from the Middle East, Singapore and Malaysia.
The income of workers in the Middle East has fallen to a certain degree due to conflict in the region as well as decreased oil prices. Also, those working in the Middle East and other countries around the world, are avoiding the conventional banking methods of sending back their earnings home. They are increasingly using mobile banking, ‘hundi’ and other informal means to remitting money. That is why records show the decrease of remittances in the formal channels.
Even if the informal methods of money transfer are taken into account, there still has been a slump in remittances. This has been a global trend over the past two years. Even so, the decrease hasn’t been that significant in several countries, such as Sri Lanka and Pakistan. The overseas workers of these countries are more skilled and educated in comparison to ours and their wages are also comparatively higher.
Since remittance constitutes the major part of our foreign exchange and plays an important role in our economy, we must focus on how to prevent a decrease in this income, and also devise means of boosting it further. We have a huge population of the 19-35 age bracket and they need to be educated and given skills training in order to survive competition in the job market. Sending remittance through informal means should also be discouraged. The prevailing banking system must be made easier, speedier and cost-effective.