From Mintoo (2004), Development of Bangladesh with Equity and Justice. Remittances: robust inflow but deceleration in number of workers leaving Over the past two years, a record number of Bangladeshi workers (1.7 million) left the country in search of jobs abroad (the total number of migrant workers is estimated at about 6.1 million at present, over 10 percent of the total labor force; they are estimated to have sent about USD 7.9 billion in FY2007-08, equivalent to 10 percent of GDP). Remittance flows play a crucial role on three counts: i) ability to pay for import payments; ii) sustaining foreign exchange reserves; and iii) household income of remitters. Remittance flow till now has been quite robust. During July-February of FY2008-09, remittance earnings increased by 27.1 percent compared with the corresponding period of last year. Indeed, USD 865.3 million was remitted in the month of January 2009, a new record; another USD 784.4 million was sent in February, 13.8 percent higher than the comparable month of FY2007-08. However, in all likelihood, the number of workers going abroad will be significantly lower in 2009. One important impact of the crisis has been the significant slowdown in the number of people migrating in recent months. Already some of the traditional destinations, including the United Arab Emirates (UAE), Saudia Arabia, Malaysia and Singapore, have indicated caution with respect to recruitment, in the face of sluggish economic growth and lower demand for construction and other services. According to recent data, during July-February of FY2008-09, the number of people migrating abroad in search of jobs declined by -26.2 percent compared with the same period of FY2007-08. In February 2009, the number of persons was only 43,856, compared with 71,716 in February 2008 (38.8 percent fall). Saudia Arabia and Kuwait have virtually stopped issuing new work permits to Bangladeshi workers; these destinations account for 39.7 percent of all Bangladeshi migrant workers. The UAE, another major destination, has also shown lower demand for migrant workers, with the number of workers going to the UAE in February 2009 lower by 5,000, compared with January 2009. Falling demand in Dubai, particularly in view of stoppage of ambitious construction works, may make the UAE picture gloomier in the near future. It is to be kept in mind that many workers leaving the country now are going against work permits issued earlier; the slowdown of issuance of new contracts and work permits could reduce the number of future migrants significantly. Slowdown in growth of the US and the UK economies (accounting for 17 percent and 11 percent of remittances) could also have adverse impacts in the near future.
Posted on: Mon, 10 Feb 2014 05:21:01 +0000