The ninth Global Forum on Migration and Development Summit is being held in Bangladesh at a time when the world is facing the worst migration and refugee crisis in the history of human civilisation. With the evolving global political and economic scenario, countries are struggling to manage the crisis of humanity while thousands of people from war afflicted areas of Syria, Afghanistan, Iraq and many more countries are flooding in through the borders of developed countries for shelter. Once considered beneficial for mutual development of countries, migration is now a much disliked concept in the recipient countries. Economic meltdown in the developed countries in 2008 and lack of strength to bounce back since then, deprivation of the common people and the failure of political leadership have contributed to such protectionist outlook among large communities across the world.
However, the importance of international labour migration has not diminished. It yields benefits in both recipient and sending countries. Recipient countries can get their work done by workers from other countries which otherwise could not be done by their own people. For sending countries, movement of people can provide high employment opportunities and contribute to their social and economic development. The income earned by migrants increases welfare of migrant families and strengthens the national economy. Among Asian countries, Bangladesh, Nepal, the Philippines and Sri Lanka are among the top remittance receiving countries.
In case of Bangladesh, the abundance of labour supply has given comparative advantage over many other countries in the global market. Bangladesh earns a significant amount of foreign exchange through remittances of its workers abroad. In fiscal year 2016, the share of remittances in its gross domestic product was 6.7 percent. Remittances have not only been able to reduce the current account balance and stabilise the balance of payments of the country but have also helped in improving the standard of living of a large section of population through employment of its workers. However, labour mobility from Bangladesh has never been a smooth process due to several external and internal constraints.
Recent trend of migration and remittances is one such situation when a worrying situation is being observed. In FY 2016 total remittance inflow to the country amounted to USD 14.9 billion compared to USD 15.3 billion in FY 2015, indicating a decline by 2.5 percent in FY 2016. If estimated calendar year wise, remittance inflow from January to November 2016 dropped by USD 1.3 billion compared to that of the same period in 2015, according to official estimates. However, the number of people going for work abroad has increased during this period. Several reasons for this are plausible.
One of the important factors for this discrepancy between remittance flow and number of migrant population is the overall slowdown of economies in the Middle-eastern countries. Decline in global oil prices, reduced consumption, slowdown in construction sector and low investment in their economies have led to lower wages and cut down of benefits of migrant workers. On the other hand, cost of food and services has increased in those countries. This may have reduced their savings and resulted in lower remittances.
In many countries, labour market for low skilled jobs has been taken over by local workers themselves to a large extent. High unemployment rate due to economic slowdown in countries including Saudi Arabia has led to slashing employment of migrant workers — workers who have no jobs but may have continued to stay back in the hope to get back their jobs.
The other reason for low remittances is the use of non-official and illegal channel such as ‘hundi’ as a preferred channel to official channel for transfer of money. Workers prefer hundi over banking channel because of the lower processing cost and the instant delivery facility. Higher rate of USD in the informal market also encourages remitters to send money through informal channels.
Migrants from Bangladesh get one of the lowest payments compared to migrants from other countries. This calls for skills development. Along with the government, the private and non-government organisations should impart training on skills upgradation, English language, rights and obligations, safety, accidents and hazards, savings and money transfer before the departure of the migrants.
Of course, effort for higher remittances has to be linked to the overall development of migrants’ welfare. Till now a common complain of the migrants is that after migration they do not get the jobs, payments and benefits they are promised before migration. Lack of accommodation facilities, and humiliation and assault from the locals in the destination countries are other problems for the migrants. Foreign missions in destination countries should provide counselling services, welfare assistance, information and advisory programmes, orientation on arrival, monitor working and living conditions of migrants. Efforts towards improving relationship with Middle-Eastern countries are needed for increasing the number of Bangladeshi migrants and protecting these workers from exploitation. Monitoring of the manpower exporting agencies has to be strengthened to prevent frauds and exploitation.
Given that the global economic outlook including that of the oil exporting countries for 2017 is not bright, unemployment may continue to be a concern. Even for the employed, the real income of migrant workers may decline further due to higher cost of living. In view of new realities in the global employment markets, Bangladesh has to review the issue of migration and remittances in a comprehensive manner which can contribute towards achieving sustainable development.
The writer is Research Director at the Centre for Policy Dialogue.