A consultation on remittance and migration took place at the BRAC centre auditorium on June 20, where 85 participants from the government, development sector, and donor agencies participated. The objective of the workshop was to have a discussion on migration as an important component for livelihood improvement for individual households and how remittance is playing an important role in poverty alleviation in household level.
Sheepa Hafiza
Welcome everyone and thank you all for attending this discussion. Migration and remittance is contributing significantly to the Bangladesh economy and social well-being. The money the remitters are sending has contributed to more than 11% of the country’s GDP in 2011-12. This is equal to 12% of FDI.
From 2006 BRAC has been involved in awareness building, providing legal support, creating contacts with and enhanced responsiveness of government and relevant agencies, skill development and migration loan scheme for potential migrant workers.
BRAC actively advocated for ratification of the UN convention of migrants and their families’ rights by the government, and also contributed in the formulation of the domestic legislation which has been approved by the cabinet.
The discussants will discuss based on the key note presentation by Dr Mahabub Hossain which will be followed by an open discussion.
Dr Mahabub Hossain
It is important to go through the value chain of the migration process to understand its impact. The paper has been developed in connection with a longitudinal survey which was conducted by BIDS over the period starting from 1987-88, 1999-2000, 2007-2008 and 2010. The survey was done using multi-stage random sampling. 64 unions were surveyed from 57 districts to get an overall picture of the country.
The study findings give an idea about migration as an important element in the strategy for livelihood improvement for individual households and how remittances from both domestic and overseas migration have played a pivotal role in consumption smoothing of households and resource mobilisation for the government.
About 30% of the households have a member working outside the household both within and outside the country. However, the number of overseas migration increased nearly three times over the last two decades. Moreover, the incidence of overseas migration is now the highest among the small landowning groups.
Remittance has a negative effect on economic activities of the remaining household members. Only 69% of the adult males in the households with overseas migrants participated in economic activities, compared to 87% in households with no migrant members, and 83% in households with domestic migrants.
This is not a desirable state as we are not fully utilising human resources who could contribute to national income.
If we take a look at the effect of remittance on household expenditure we see that expenditure on food is 44% higher in households with overseas migrants. Investment in house construction increases by four times while expenditures in social ceremonies also increase by almost two times compared to non-migrant households. Migrant households also spend about two and a half times more on education and healthcare services.
71% of the total household stated that remittance has improved their household condition. Only 5% of the overseas migrants said that their situation has worsened, who most likely fall in the failed migration cases.
Dasgupta Asim Kumar
From Bangladesh Bank we are continuously working to increase the flow of remittance through formal channels. I believe the Anti-money laundering act has helped to increase the flow through legal channels. We are working to help the migrant workers so that they can send their money quicker and with more ease. We have allowed a lot of exchange houses in different countries to start operating.
Another recent addition is mobile banking. About 18 banks have started mobile banking through 85,000 agents. Now mobile banking users are about 6.3m. NGOs, mobile agents, bank branches and micro finance institutions are also helping us in this activity to send remittance back to households. Bangladesh Automatic Clearing House and Electronic Fund Transfer is also expediting the distribution of remittance.
This is helping increase money transfer through legal channels and discouraging Hundi (a payment method through illegal channel). In addition we are working on establishing the national payment switch to facilitate card and POS based payments which will help foster transfer of funds for remitters.
Zahid Hussain
Remittance is indeed a success story. If you look at the national accounts aggregate data you will see that remittance is the 4th largest source of national income next to agriculture, manufacturing and wholesale-retail trade. 13% of Bangladesh labour is now employed abroad, that is twice the employment in the garment industry. On a net basis remittance is the number one source of income for the country.
Bangladesh has an aspiration to become a middle income country by 2021. Middle income status is defined by GNI. GNI is the sum of GDP + net factor income from abroad. In case of Bangladesh it reduces to GDP + Inward remittance from abroad.
In our report we found that Bangladesh will need to grow by 7.5%-8% per annum while remittance will need to grow by at least 8% per annum to achieve this status.
The constraints for migration that World Bank identified are (i) Extremely high cost, (ii) Reliance on informal source of finance, and (iii) Risk of fraud. These are the three issues we identified that need to be resolved to keep the growth in migration momentum going.
To keep the growth in remittance is by going up in the value chain by increasing the skill composition and education level of migrants.
Anisul Islam Mahmud, MP
Last year we sent 600,000 people abroad and this year we plan to send 700,000. That is about 40% of the new jobseekers looking for employment, which is about 1.6m per year. This not just helps the economy but also helps resolve social issues.
To help improve the process we need to address three issues: (i) Reduce migration cost, (ii) Ensure safe migration, (iii) Protect rights of migrants in recipient countries
We need to analyse the demographic shifts occurring in Europe and find out the skill sets that will increase in demand in future. We can train and educate future migrants to be prepared to take on those jobs. I also believe the government should prioritise more on technical and vocational training as opposed to only higher education. If we train more women as nurses the remittance per migrant also goes up.
Government spending on the sector is negligible and should be increased. The government should introduce saving instruments to ensure safety of the returning migrants’ hard-earned money. Finally, remittance can be increased by providing the right education which will not only improve the stock but will also help in moving upward in the value chain.
Zafar Sobhan
In Bangladesh we look at migration as a success story. We call the migrant workers the unsung heroes of the economy and certainly they are the backbone of the economy. The migrants are working in extremely harsh conditions. The money from migrants per person has not increased that much since we haven’t been successful in moving up the value chain to make better use of this resource.
I am interested about data about migrants returning home. We have 500,000 people leaving the country each year. I want to know what happens to migrants after they return. Do they come back with higher skills? Have their values, attitudes in voting, social activities changed coming back to the country? I hope the policy makers also take these attributes in consideration.
Sumaiya Islam
Bangladesh Bank should have a plan to develop a programme targeted towards female migrant workers in the future. I have come to learn that a lot of the female workers who are in the Middle East are being tortured and not being paid their salaries in time.
The concerned authorities need to take care of these issues at a priority basis.
Moushumi Khan
Migrant workers go through several hassles in the airport and are also treated badly. Could we have a VIP lounge and also special customer service for migrant workers?
Syed Saiful Haque
The Overseas Employment and Migration Act 2013 needs to be passed immediately. Cost of migration needs to be reduced. The banks in Bangladesh are earning large amounts of money from remitters’ money. Probashi Kalyan Bank should be used for the benefit and welfare of migrant workers.
Shakirul Islam
Migrant workers rights protection and welfare is not adequately taken care of. Government should allocate more in the budget for this purpose. There is no plan from the government for reintegration of returnee migrants into the economy. Government should take measures and allocate budget for this purpose. Otherwise remittance will always give these migrants temporary relief but no sustainable livelihood.
Abu Taher
We have yet to discover in detail about what is happening throughout the lifecycle of migration. Sporadic studies have been done but not enough to get an overall picture. More studies should be undertaken in this regard. More money should be allocated in budget for the welfare and rights protection of the migrant workers. I would also like to know whether World Bank has any plans to introduce migration as a development issue in Asia and in the third world countries.
Nisha
Please ensure that the new legislation regarding migration is passed in parliament within the timeframe of this government. We know that remittances have contributed to the Bangladeshi economy. However, there are no studies to capture that linkage of investment from this Diaspora. We have no information on Bangladesh government’s spending on protection of migrant workers’ social security compared to remittances.