Remittances dropped to a six-year low to $13.53 billion at the end of last year, as many expatriate Bangladeshis preferred to send money home through illegal channels. The inward remittances were 0.53 per cent lower than that of 2016, when migrant workers remitted $13.6 billion.
According to reports, most of the migrant workers are now opting for the illegal channels like hundi for most part of the year, mainly because of a lower exchange rate of the American dollar against the taka. Hundi traders have been fast transferring remittances to relatives of expatriate Bangladeshis through mobile services, which have resulted in a fall in the amount of money sent through banking channels.
Remittance is a major source of foreign currency for Bangladesh and its decline since fiscal 2015-16 has progressively become a matter of concern for the government. The inflow is still not on the right track despite the upward trend during the last few months.
The depreciation of taka against the dollar helped the country raise its income from remittances in recent times, but it was only a temporary phenomenon. Inter-bank exchange rate was Tk 82.70 on January 1 this year, up 5.08 per cent from Tk 78.70 on the same day a year earlier. The latest volatile situation in the banking sector eroded the clients' confidence, which left an adverse impact on the banks' deposit mobilisation, including remittance inflow.
Migrant workers sent their hard-earned money to their near and dear ones through the illegal channels to get rates higher than those offered by banks. The incomes of many expatriate Bangladeshis declined recently, which hit the flow of remittances adversely. The central bank has strengthened its surveillance over cross-border financial transactions through hundi, thereby giving a boost to the inflow of remittances.
In November last year, an inter-ministerial committee came up with 18 proposals to boost remittance flow through formal channels and ward off the growing menace of digital hundi. However, the latest rise in inward remittance flow is due to the recent appreciation of US dollar against taka and the advent of Ramadan, when remittance inflow usually rises. Such growth needs to be sustainable for the development of the country.
What is needed at this stage is the joining of hands of the manpower agents and the government not only to revive the demand for Bangladeshi workers in traditional destinations, but also to explore new markets. As most manpower-importing countries are interested more in employing skilled workers, the authorities should take pragmatic steps to create a productive manpower base, properly trained in trades that are high in demand in those countries.
Bangladesh Bank asked the commercial banks some time back to take measures for improving the quality of remittance services, so that the Non-Resident Bangladeshis (NRBs) send home their hard-earned money through formal channels. The banks have been instructed to open a 'help desk' for ensuring better services at each of their branches dealing with remittances.
They were also instructed to inform the NRBs about all types of investment opportunities for them, and to build awareness among concerned people about the advantages of sending remittances through the banking channels.
The government, meanwhile, plans to extend incentives to Bangladeshi expatriates for encouraging them to send money through the official channels in an effort to arrest the slide in remittances. Such incentives, it hopes, will provide a solution through which the fall in remittance collection could be reversed.
Facilities for imparting training on technical education and soft skills are currently very inadequate compared to the high number job seekers. Effective steps are urgently needed for making the process of manpower export foolproof and affordable by ensuring easy access of job seekers to technical education. Also, stern action against foul-players in the manpower business is the need of the hour for making the current trend in remittance inflow sustainable.
However, in order to stop the falling trend of manpower export, it is necessary to mount a vigorous diplomatic drive in order to persuade the traditional manpower importing countries to open their doors for the Bangladeshi workers. The Bangladesh missions need to be restructured with a view to effectively deal with the emerging situation.
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