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Study: Migration costs reduced as new markets open

  • Published at 10:54 pm October 30th, 2018
Representatives of RMMRU speak at the launch of ‘Impact of Migration on poverty and growth in Bangladesh’ at the Brac Centre Inn auditorium in Dhaka on October 30, 2018 Mehedi Hasan/ Dhaka Tribune

The study has observed some interesting changes in the area of sources of finance for migration

Even though there is lack of government policy to reduce migration costs, the emergence of new markets and competition have made way for the said costs to be reduced, research finds.

Based on the research conducted by Refugee and Migratory Movements Research Unit (RMMRU) and mandated by the Swiss Agency for Development and Cooperation (SDC), RMMRU launched a book, “Impact of Migration on poverty and growth in Bangladesh,” at the Brac Centre Inn auditorium in Dhaka on Tuesday.

The research further found that migration costs from Bangladesh to Middle Eastern countries like Saudi Arabia and South East Asian countries like Malaysia have reduced by 10% in the last three years.

In 2014, the average cost for male migration was Tk382,031. In 2017, it dropped to Tk342,254, the study found. 

In 2014, female migrants, on average, paid Tk96,000. In 2017, the amount was at Tk90,000, the study observed.

RMMRU Founding Chair Dr Tasneem Siddiqui said: “For quite a few years, Bangladesh was unable to gain access to important markets such as Saudi Arabia and Malaysia. However, the demand for participation in international migration persisted among the rural population, resulting in a relatively in a high cost of migration during the years of 2013 and 2014.”

“Along with other reasons, the opening up of these two markets during 2016 and 2017 has increased the supply of work visas, and subsequently contributed to lowering the migration costs,” she added.

The study has observed some interesting changes in the area of sources of finance for migration. The most significant in this respect is that the percentage of people who have disposed of land in order to finance migration has fallen over time.

Access to formal credit has increased, and importance of money lenders as a source of migration loan has decreased, the study found.

Almost a tenth of those who have migrated during the 2014-2017 period have secured a portion of their migration costs from banks and micro finance institutions.

Citing the importance of the research, the World Bank Lead Economist Dr Zahid Hasan said: “The research work has challenged those who claim the national remittance under 2016-2017 fiscal year had reduced as many were sending remittance through non-institutional process.

“Because collecting ground level data of remittance earning through institutional and non-institutional process, research has shown the remittance has reduced.” 

Bangladesh Bank Chief Economist Dr Faisal Ahmed thinks the information about consumption and poverty brought out by the RMMRU research is relevant with the overall economic picture of the country.  

Beate Elsasser, deputy head of mission and director of cooperation, Swiss Agency for Development and Cooperation (SDC) said that the shortcomings of getting a formal migration loan for women should be addressed with necessary policies. 

Bangladesh Institute of Development Studies (BIDS) Director General Khan Ahmed Sayeed Murshid, IOM-Bangladesh Mission Chief Giorgi Gigauri, Ministry of Expatriates’ Welfare and Overseas Employment Deputy Chief (Planning) Shaikh Md Sharif Uddin were present at the program. 

Future policy recommendations

The study found that the most poverty in Bangladesh is mainly an issue of uninsured risks as opposed to a lack of growth opportunities. This means, that even if there are opportunities available for poverty alleviation, people are at susceptible to taking uninsured risks in getting out of poverty instead, such as migration. 

To overcome the problem, the study recommends stronger oversight of intermediaries and better governance in terms of reducing fraud and the incidence of failed migrations. 

The study also highlights the importance of the development of a comprehensive return reintegration strategy for the migrants to help minimizing the incidence of transient poverty upon return.

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