Remittance in Bangladesh
Introduction:
A remittance is a transfer of money by a foreign worker to his or her home country. Remittance can also refer to the accounting concept of a monetary payment transferred by a customer to a business (Wikipedia, the free encyclopedia). Remittances have been playing a very significant role for the overall economic development of Bangladesh. Therefore, this paper attempts to explore the actual remittance income and its impact on overall economy of Bangladesh. Remittances have already been emerged as a prime driving force to the economic growth and poverty alleviation in Bangladesh. It has obtained second position among the foreign currency earnings sector of Bangladesh. (Bangladesh Bank). Formally, the export of manpower from Bangladesh has been started in 1976.
Terminology:
*Bangladesh has been maintaining position within top 10 remittance recipient countries since last 15 years from 2004 to 2014. The size of the global remittance market was over $601 billion in 2015 (World Bank, 2017b). Table shows the top 10 remittance receiving countries in 2015 based on World Bank data.
In this year many people gone to the Middle East for doing work.Many people gone to foreign.Huge people stay in USA,Soudi Arab,Canada etc.
The export of manpower is one of the most significant foreign currency earning sectors of Bangladesh. It contributes our national economy in a large measure by increasing foreign exchange reserve, per capita income and employment opportunities. The remittance which has sent by the migrant workers is the 11 percent of the total GDP (Gross Domestic Product) in Bangladesh.
According to Bangladesh Bank Research Report (2012), among the migrant workers, 47 percent have gone to abroad by lending money from others and 41 percent have gone by selling land or leasing land to others. A large part of these migrant workers is unskilled or semiskilled. As a result, they have sent a large part of their income to Bangladesh. Most of the migrant workers families are maintaining activities with this money. The government becomes more beneficial than family members of migrant workers. The government gets huge foreign currency. The foreign remittance income is not only increasing foreign currency reserve but also playing a significant role to reduce poverty and to enhance the economic development of Bangladesh (World Bank, 2012). Bangladesh would be middle income country within 2021 depending on the foreign remittance income (Minister, Ministry of Expatriates’ Welfare and Overseas Employment, 2012). The foundation of economy of Bangladesh becomes stronger with the help of valuable and hard –working money of migrant workers. The flow of amount of remittance would be one thousand four hundred crore USD (Immigration and Development Division, World Bank, November 20, 2012). The position of Bangladesh is seventh in the world remittance income. Bangladesh obtains the position in the world remittance income to the next of India, China, Philippine, Mexico, Nigeria and Egypt. The contribution of migrant workers has been playing a very significant role to the development of socio-economic condition in Bangladesh (General Director, BMET, 2012).
1. SIGNIFICANCE OF REMITTANCE INCOME FOR BANGLADESH ECONOMY Remittances have been continuously playing an increasingly large role to the economic growth and the livelihoods of people in Bangladesh. Remittance income is more valuable for any developing country like Bangladesh. Puri and Ritzema (2001) tell that remittance is the portion of international migrant workers’ earnings sent back from the country of employment to the country of origin, play a central role in the economies of many labor sending countries. Osmani (2004) tells that remittances have been identified as one of the three factors that have been responsible for reducing the overall incidence of poverty in Bangladesh. The demand of migrant workers remittances has now increased tremendously in Bangladesh in a number of reasons. These are as follows:Remittance contributes to our national economy is a large scale by increasing foreign exchange reserve, per capita income and employment opportunities. It has been continuously lifting-up the GDP (Gross Domestic Product) of Bangladesh. In 2012, the remittance which has sent by the migrant workers is the 11 percent of the total GDP of Bangladesh. Remittance has been continuously keeping the contribution to alleviate the poverty of Bangladesh through micro-enterprise development, generating substantial employment and income. The government has been paid various government and non-government import bills and installments of different foreign debt & donation from the remittance income. Remittance income helps the government of Bangladesh to reduce dependency on foreign aid. Remittance helps to improve the balance of payment position of Bangladesh. Remittance also contributes to the expansion of financial market activities and the development of payment systems through enhancing direct capital flows and distributing those funds to users end and for investment or finance consumption purposes. The government of Bangladesh is using remittance income to build schools, colleges, universities hospitals, roads, & highways, bridges, culverts, etc. Remittance income is positively the socio-economic condition of migrant families. 10. Remittance income makes more strong local currency (Bangladesh) against US dollar.
METHODOLOGY This study explores the relationship between remittance and economic growth of Bangladesh by using the time series data from 1995-2016 which have been collected from the World Development Indicators of the World Bank database as well as Bangladesh Bank statistics. It has also derived trends of some variables including remittance earnings and gross domestic product (GDP) along with their comparison based on the data from 1995 to 2016.Remittance always involve with GDP. The study calculates annual growth (%) of remittance earning by Bangladesh based on the equation one which is compared with the GDP growth of Bangladesh. RESULTS AND DISCUSSION Remittance and its growth in Bangladesh Bangladesh is one of the largest remittance recipient countries through the export of its labor forces mainly to the Middle East and the Southeast Asian countries since the early 1970s. Bangladeshi workers are now working in a large number of countries including Saudi Arabia, UAE, Qatar, Kuwait, Oman, Malaysia, USA, UK, Italy and South Africa and so on.
Conclusion:
The Government of Bangladesh with 160 million people is a to use the human resource effectively. The GOB has recognized labour migration as a potential tool for the socio-economic development of the country. Efforts to manage migration have been strengthened and introduced digitized migration management system in order to maximize benefits from migration and minimize the harmful effects. Poverty reduction has become an immediate agenda of the government of Bangladesh that it has take up the National Strategy for Accelerating of Poverty Reduction (NSAPR-II) in order to combat it urgently. One of the most important vehicles for reduction of poverty is migrant workers’ remittances.
MD IBRAHIM HOSSAIN
BBA
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