Economic Contribution of Migrant Workers in Bangladesh

Introduction Bangladesh is located in S kayoedh Asia. It is the seventh most populous country in the solid ground and is mostly densely inhabited. The poverty level, however, has fallen by more than 20%, helped by its prominent agricultural sector. The Bangladeshi economy is helped by its outstanding garment sector, which contributes more than two-thirds of the countrys trade. The major challenge to wanton growth is the vulnerability of the land to cycl atomic number 53s and floods. However, even with such challenges, Bangladesh has experienced a growth prize of 5% since 1990.This growth has been helped by remittals from expatriates as well. Since 1975, on that point has been a two-fold increase in the per-capita GDP. During the 2008 global economic recession, Bangladesh managed to stay flexible. jibe to the Bangladesh Bureau of Statistics (BBS), there was an increment of $62 in the per capita GDP in FY2009 from US$559 at the end of FY2008. Fiscal 2009 registered per capita income of US$621. About 25% of the countrys GDP in 2009 came from remissions of expatriates, totaling $9. billion and garment trades value $12. 3 billion. The increasing immaterial direct investment highlights the growth rate of the Bangladesh economy and remits from overseas Bangladeshis, totaling $11 billion in FY10, accounted for almost 12% of GDP. Scenario of migrant workers in Bangladesh is given below throw a chart. pic stinting Contribution of Migrant workers in Bangladesh remission is the life line of Bangladesh economy. twain(prenominal) 4. 5m nonresident Bangladeshis argon working remote, and aerateing crustal plate hard get outside(prenominal) currencies.It is believed that the actual bet of Bangladeshi migrants, both legal and illegal, would be close to 7. 5 jillion. In the first 10 months of FY 2006-07, number of workforce export stood at 0. 42m, showing 83. 14% rise, compared to 0. 25m in FY2004-05. In FY2005-06, the number stood at 0. 29m, current y ear to year growth is near 16%. In addition to achieving higher export earnings, the country witnessed a 44 percent growth in remittance earnings during the first rear of 2008-09 fiscal year compared to the same period of the foregoing fiscal year.The other records of remittance earnings in a single month are $820. 71 one thousand thousand in July and $808. 72 one thousand one million million in serve of year 2008. A total of 9,81,102 Bangladeshi people went abroad in 2007-08 fiscal year which is about 74 percent above the preceding(prenominal) fiscal year figure. harmonize to the statistics, on monthly average home more than 81,000 Bangladeshis went abroad in 2007-08 fiscal year. The figure was 46,000 in the previous fiscal year. Non-resident Bangladeshis (NRBs) sent $2. 45 billion to Bangladesh between July and September of 2008, harmonise to the Bangladesh croupt statistics. Meanwhile, private bank officials said the global economic slowdown, chiefly in the US and Eu ropean countries, is yet to impact the remittance inflow. They, however, collar that if the crisis anticipates it may have a negative impact on the inflow. The remittance market of Bangladesh has been showing a steady growth in toll of incoming remittance volume.Considering the current macro-economic indicators, it seems that this growth run will continue in the coming years. Central Bank predicts that our annual incoming orthogonal remittance will touch $10 billion in the side by side(p) 3 years. The reasons for such robust growth can be summarized as Stable macro-economic indicators including GDP growth, Steady growth in manpower export specially in the middle east Substantial devaluation of the local property Rapid urbanization Development of modernistic remittance corridors in Australia and firearm of Europe and Africa Increased focus of Central Bank and the Government to impart notes through formal channels Increased competition among financial institution to gr ab market share Aggressive marketing insurance adopted by Banks to increase their share of wallet Expansion of arm network of various commercial banks MFIs involvement in channeling remittance funds in remote areas Participation in the UN peace keeping missions Anti-Money launder rules and regulations came in force However, the market is still far from perfection in terms of service quality, cost structure, and transaction risk aspects. Among all, the biggest impediment is the velocity of transactions and cost of transaction. In cases, it takes more than a week to burden a foreign remittance to beneficiary. Average cost is 20 SAR for a remittance from Saudi Arabia to Bangladesh. Banks drives the legal channel for remittance mobilization.Top 3 remittance receiver banks in market are given in carry over 1. 1. delay 1. 1 Monthly Inward Remittances Sl. BANK August, 2008 (in USD Million) 1 Sonali Bank 104. 700 2 Agrani Bank 66. 091 3 Janata Bank 64. 50 Whilst data on Non Resident Bangladesh (NRB) remittances coming into Bangladesh are readily available, projections for local remittances are intemperate to determine. The figures in USD given in the Table 1. 2 are approximate. Table 1. 2 Local and Foreign Remittance Comparison in USD 07-08 (No. ) in USD 2008-9 (No. ) in USD 2009-10 (No. ) in USD NRB Remittances 7 million 8. million 10 million Local Remittances 14 million 17 million 20 million Most of the remittances sent to our country are for various livelihood purposes, such as expenditure of Small loans, living expenses, business start up costs, medical treatment and funds for asset purchases. This highlights the importance of fast disbursement of money that e-Remittance System promises to deliver. The system will help attract new un-banked customers who have previously depended upon informal channels.At present, only a fraction of remitters send their money through banking channels. The e-Remittance system will also provide the busin ess platform for handling the substantial market for within country remittances. start Countries of Remittance From Saudi Arabia, over a million workers sent $1,312 million during July-March period of 2007. In the same period The United Kingdom came out as the second biggest source of remittance with Bangladeshi Diaspora sending home $657 million to their relatives at home, closely followed by $656 million from the United States of America.Non-resident Bangladeshis remitted $559 million from the United Arab Emirates and $494 million from Kuwait in July-March period of 2007. Economic Benefits Remittance has economic benefit both at macro and micro level. In 2004, the formal remittances contributed 6% of GDP. If informal channels were included this contribution reaches 9-10% of GDP. In 2004-2005 fiscal year remittance was 44. 47% of export receipt. The proportion of foreign aid was only 38. 74% of remittances in 2004-2005 fiscal year and foreign direct investment was only 13. 58% of remittances in 2003-2004.The remittance has noteworthy macroeconomic impact at household level. The majority of Bangladeshi migrants abroad is unskilled, and originates from rural areas and poor community. The poorer the household, the more impact or benefits remittance income can have alleviating poverty. Remittances allow the poor people to increase expenditures on both durables and non-durable products, and provide them with protection against negative income shocks. Statistics between growth of migrant workers and growth of remittances are mention bellow. pic Migrant workers drive economyBangladeshs economic cultivation largely depends on remittance sent by migrant workers, which is one of the sources of earning foreign currencies. A third of the 18 lakh people who encipher the job market a year go abroad for work, adding that remittance inflow will increase crucially if the figure can be increased to 10 lakh in five years. We hope the remittance inflow would cross $14 billi on mark this year. The incumbent brass sent about 2 million Bangladeshis from January 2009 to October 2012 and the country received around $44. 22 billion in remittances during the period.Expatriates contribution to the national GDP (gross house servant product) is 11 percent. Over 30,000 female workers go abroad a year to work, and the government has been working to transform them into skilled hands to create more jobs. The government has also taken some steps, including rehabilitations of the returned migrant workers and scholarships for their children, to ensure reveal facilities for the expatriates and their families. Around 25 percent of the total employment comes from overseas employment, which should be increased to 50 percent in five years. Conclusion According to the World Bank, Bangladesh has achieved a growth rate of 5. % in FY2009. The country has registered significant expansion in its middle class. The consumer industry has grown considerably. The increasing foreign direct investment highlights the growth rate of the Bangladesh economy. At present military position when political imbalance of our country, violation of law in every sector, corruption, set hiking, lack of electricity, gas etc creates thousands of problem in economy of Bangladesh, and in this business office contribution of migrant workers strengthen the growth rate of Bangladesh economy. Thats why Bangladeshs economic development largely depends on remittance sent by migrant workers.