Staff Correspondent: The World Bank predicts that Bangladesh will receive $23 billion in remittances in 2024. The World Bank said that the same remittance will reach Bangladesh this year as well.
According to the World Bank’s latest Migration and Development Brief released on Monday (Dec 18), Bangladesh’s official remittance growth may remain unchanged due to the recent balance of payments crisis.
Currency devaluation and exchange rate management policies have encouraged expatriates from Bangladesh, Pakistan and Sri Lanka to take advantage of the black market and transact money through informal and formal channels.
According to the World Bank report, ‘In 2023, the remittance flow to Bangladesh is projected to be $23 billion.’
According to Bureau of Manpower, Employment and Training (BMET) data, a record 12.46 lakh workers from Bangladesh went abroad till December 11, 2023. Last year this number was 11.35 lakh.
Despite significant growth in the labor export sector, remittance flows remained stagnant at around $22 billion in the past two calendar years.
The global lender has predicted that jobs will be created for South Asian workers in the Gulf countries
next year. These countries are again the main source of remittances for Bangladesh.
According to the report, the growth of Gulf Cooperation Council (GCC) countries may remain positive. Also, low oil prices may create new jobs for South Asian immigrants in those countries in 2024.
Problematic exchange rates
The executive director of South Asian Network on Economic Modeling (SANEM) Salim Raihan said that Bangladesh’s remittance growth in formal channels is not enough, ‘The issue of exchange rate is problematic because it is not market based. This is a major reason for remittances not coming through official channels.’
He said, ‘Secondly, a lot of money has been and is still being laundered from our country. Hundi market is attractive enough for that. Because smugglers need the hundi market, so that remittances do not come through formal channels and foreign currency remains abroad. Which is helping to launder money from the country.’
Salim Raihan said, ‘Recently, the IMF is saying that a large part of the export income has not come to the country. It means that foreign exchange remittances are not coming into the country. The main reason for this is that the Hundi market is still strong enough.
He suggested making the exchange rate market-based, eliminating the problem of sending remittances through formal channels and stopping illicit money laundering from the country.
‘If these measures are not taken, I agree with the projections that remittances through formal channels will not improve significantly,’ he said.
According to Bangladesh Bank, Bangladesh received $19.93 billion in remittances in the first 11 months of this year.
According to the World Bank report, remittance flows to South Asia could increase by 7.2 percent to reach $189 billion in 2023.
All of this growth will come from remittance flows to India. The country is expected to receive $125 billion in remittances by 2023.
According to the World Bank report, growth in remittance flows in 2024 may drop to 5 percent due to weak economic growth in the United States, Euro Area and GCC countries.
Govt initiative to increase remittances
The government now offers a 2.5 percent cash incentive to boost remittance flows. In addition, banks can offer more competitive prices on remittances, which can encourage more people to send money through banking channels.
Yesterday (December 18) Cabinet Secretary Md. Mahbub Hossain urged to find the reason why remittances are less than the number of workers.
Cabinet Secretary Mahbub Hossain said, ‘The amount of remittances is less compared to the amount of people we are sending abroad. Many countries are earning more remittances by sending fewer people than this. Special attention should be paid in this regard. Those concerned should find out. In this case, importance should be given to sending skilled workers.’
He said, ‘Special importance should be given to expatriates to send remittances through legal channels. Maybe many people don’t know what benefits the government is giving if you send remittances through legal channels. Publicity should be increased in this regard. In this case, the existing institutional weaknesses must also be resolved.’
Expatriate Welfare and Foreign Employment Secretary Dr. Ahmed MunirusSalehin said, ‘We need skilled workers. Skilled workers are not getting proper salary. We will never send workers abroad. I will send abroad only after confirming everything including salary, security.’
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