Socio Economic Impact of Foreign Remittance in Bangladesh

OBJECTIVES: To examine the impact of
migration on remittances,
remittances on per capita income,
remittances on the wellbeing of household,
utilization of remittance by migrant households,
To understand the role of remittance in economic development.
METHODOLOGY: Exploratory research.
SOURCES OF DATA:
Primary: Survey, informal interviews.
Secondary: Website of BMET, Bangladesh Bank, Statistics Dept. etc.
LIMITATIONS: Confidential data,
Absence of data on the use of remittances,
Lack of detailed data on the regional distribution of migrants,
Data is available on different aspects of short term migrants,
but there is no data on long term.
Lack of practical experience on such a vast topic.
Extent: From 1976 to 2009 the total number of short-term migrants is
6.624 million. It indicates a yearly average flow (1996–2009) of 3.8 lac.
Main Flow: KSA, UAE, Malaysia, UK, USA, Singapore & Middle East.
Type of Employment: Professional, skilled, semi-skilled, and unskilled.
Gender Distribution: Mainly male, Females are negligible in number (>1%).
Age & Education: Mostly 20-40 years old & education is class 1 to SSC.
Manpower export & flow of remittance
12000
10000
No. of expatriates
8000
Remittance Million US$
6000
4000
2000
Country Wise Bangladeshi

Migrants (Up to Sep'09) Overseas Employment and Remittances
Profession 60000
al
3% 50000
Skilled 40000
31% 30000
Less- 20000
skilled 10000
50%
Semi- 0
skilled
16%
Expatriates Classified by Skill Trend of Overseas Employment

Remittances and Broad Macroeconomic Indicators
8000 7471
As Percent of GDP As percent of Export 7000
6149
6000
5077
62.3 5000
56.1
46.8 44.4 44.5 45.6 49.1 4000 3484
3070 2930
3000 2765 2705
2121 2039 1739 2470
10 11 2000 1608 1602 1583
17191523
5.9 6 6.4 7.8 8.8 913 880 1307
1000 520
0
Remittance as % of GDP & export

Foreign Currency Reserves of BD in Million $
25 21.5
20.45
20 Chittagong, 9/1/2003* Sylhet, 6/1/2010
15.02
15 11.24 11.7
9.2
10.55 9.07
10 6.5 7 7.19
6.2
5.6 5.2 5.9
5
4.7
3.22 2.75 2.24 3.54.76 3.07
3.47 2.9
2.3
0.96 1.21.99
0.9 2.10.92
0.94 1.30.09
1.3 1.04
0
Development through use of Remittances: 70% 61%

60% 54%
Contribution of Remittance to the 50%
National Economy 40% Before At Present
27%
30%
Business Investment 20%
18%
11%
Shopping Malls and Hotels 10% 6%9% 4%8% 2%
0%
Housing and Construction
Labor Market & Employment
Transportation and Communication
Health, Education & Religious Institutions Nature of Housing before
Migration and at Present
The followings are some of the major findings from the study
Remittance, as a stable source of huge money transfers, acts as a lubricant for
continuous stimulator to stabilize the economy, stimulates other domestic
industries, creates employment.
Remittances as an important component of income to maintain subsistence to
some households, have a positive impact on per capita income and help to
reduce poverty as well as increase savings rates.
The return migrants are resistant to accept the low paid. The remittance earning
families send their children to the most costly institutions.
Though there is an increasing high demand of skilled labor in the international
market, but Bangladesh lacks skilled and professional personnel.
FDI, Foreign exchange reserve and the amount of remittances in terms of GDP
and export earnings are increasing significantly over the years, proportion of
foreign aid is declining.
Development in communications, transportation facilities and lower airfares made
foreign migration easier and less costly for more frequent trips home. Satellite
TV, mobile phone and internet keep migrants in close touch with the families.
The highest portion (48.10%) of total labor force is still being engaged in
agriculture. Only 7% (migrants) of total national workforce contributed 10.96%
of GDP. Middle East is the destination of about 80% of our total manpower
export. Saudi Arabia alone receives 33.31% of total expatriates of Bangladesh.
In the Bangladeshi context land is the safest and a very profitable investment.
To protect Bangladeshi workers abroad from being
retrenched by their employers and to ensure greater output
of remittances government might take the following steps
Develop new foreign policy and strengthen diplomatic efforts, explore new
labor markets and reduce the cost of migration.
Take necessary and timely initiatives by reforming manpower export

related laws and regulations to seize this opportunity of high demand of
skilled labor in the international market.
Return migrants are resistant to accept the low paid jobs, to stimulate the
national economy and to increase employment assist and encourage
entrepreneurship.
Expenditure on basic needs and consumer goods have welfare effects on

the economy and can stimulate other domestic industries, so create and
enable environment of investing remittances in Capital Market and
other productive new business.
As migrants add to the demand for imports and more consumption of

imported products, so exports must be encouraged.
“Socio-Economic Impact of Foreign Remittance in
Bangladesh: A Study in Sylhet”
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OBJECTIVES: To examine the impact of

Country Wise Bangladeshi

Expatriates Classified by Skill Trend of Overseas Employment

Remittance as % of GDP & export

Development through use of Remittances: 70% 61%

Take necessary and timely initiatives by reforming manpower export

Expenditure on basic needs and consumer goods have welfare effects on

As migrants add to the demand for imports and more consumption of

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