Remittances stagnate despite record manpower export in FY23

Bangladesh has achieved a remarkable milestone in its manpower export during the immediate past fiscal 2022-23, sending a record 11.37 lakh workers abroad.

The number surpasses the target by more than 40% and represents a substantial 15% increase compared to the previous year, according to data from the Bureau of Manpower, Employment, and Training.

Despite this impressive performance in exporting manpower, the inflow of remittances has not seen a corresponding increase. Remittances only grew by a modest 2.75%, reaching a total of $21.61 billion. The amount is nearly 13% lower than remittances received two years ago despite the government's incentive of 2.5%.

Migration experts and bankers have identified two major reasons for this discrepancy. Firstly, informal hundi operators, who offer higher exchange rates, are attracting remitters away from formal channels. Secondly, a considerable number of unskilled workers being sent abroad may be affecting the overall remittance amount.

The situation is concerning as Bangladesh's foreign currency reserves have been depleting, and the value of the taka has been depreciating for the past 16 months.

To address the issue, some bankers suggest that the central bank should allow commercial banks to purchase dollars at higher rates than the current prescribed one.

According to the CEO of a prominent private commercial bank, they are currently limited to offering Tk109 for a dollar, while hundi operators are providing Tk115 to remitters, which could be a contributing factor to the preference for informal channels.

"It is great that we have been able to send over 10 lakh workers abroad, but we are not satisfied with this. If we can send at least 15 lakh people every year, it will play a major role in eliminating unemployment and boosting remittances," Shamim Ahmed Chowdhury Noman, former secretary general of the Bangladesh Association of International Recruiting Agencies, told TBS.

Demanding changes in the education system to create more skilled workers, he said, "If we can teach our aspiring migrant workers English and Arabic along with the technical skills, we will be more capable of capturing the market for skilled workers in Europe and the Middle East."

Labour migration on the rise

Migration of Bangladeshi workers that had come to a complete halt in 2020 owing to pandemic-led restrictions started turning around in August 2021. The upward trend has been continuing since then, taking the labour migration to a near pre-pandemic level.

With Covid restrictions in effect, overseas employment declined to 2.80 lakh in FY21, according to the Bureau of Manpower, Employment and Training.

The country sent 9.88 lakh workers in FY22, a huge surge following about a two-year halt in labour migration due to the pandemic.

The recruiters said mainly the workers who could not go abroad for two years due to the pandemic migrated abroad in FY22 and FY23 as the reopening of businesses in the Middle East created many job opportunities.

About 2.28 lakh workers have gone to Malaysia since August last year when they reopened their labour market for Bangladeshi workers after three long years.

Malaysia is hiring foreign workers for all sectors including manufacturing, construction, services, plantation, agriculture, mining, and household service.

Labour recruiters said more workers are going to Malaysia as it offers a better salary structure than the oil-rich Gulf countries.

Aside from the lucrative salary, the weather condition in Malaysia, which is almost similar to that in Bangladesh, is another reason behind Bangladeshi workers' eagerness to go there, they said.

Md Tipu Sultan, the joint secretary of the Bangladesh Association of International Recruiting Agencies, told TBS, "A Bangladeshi worker in Saudi Arabia gets a minimum salary of 800-1000 Saudi Riyal (approx Tk23,000-28,000) while in Malaysia the minimum salary is 1,500 Malaysian Ringgit (Tk35,000)."

However, Saudi Arabia remains the largest destination of Bangladeshi workers as the country recruited 4.52 lakh Bangladeshis in the last fiscal year followed by Malaysia, Oman, UAE, Singapore and Kuwait.

An increase in quota for Bangladeshi workers in all Saudi firms to 40% from 25% has contributed to the country's overall growth in manpower export. The kingdom has employed 40% of the total Bangladeshi migrant workers last fiscal year, said sources.

Most of the migrants in the Middle Eastern countries work as cleaners and housemaids. These countries also deploy some semi-skilled workers like drivers, electricians, and plumbers.  

In parliament in the last week of June, Expatriates' Welfare Minister Imran Ahmed said there is a plan to sign agreements with new countries for manpower export.

He also said a process is underway to sign agreements with Libya, Malta, Albania, Romania and Serbia in this regard.

According to a report of the Refugee and Migratory Movement Research Unit, the number of skilled workers who travelled to other countries decreased in 2022 compared to the previous year.

In 2021, the number of skilled workers was 21.33% of the country's total labour migration, which came down to 17.76% in 2022, it said.

However, there was no significant change in the number of semi-skilled workers, which was 3.26% in 2022 and 3.28% in 2021.