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In a vicious cycle of poverty, migrant workers struggle to pay off loans

  • Published at 09:38 pm November 24th, 2018
File photo of Bangladeshi workers bound for Malaysia waiting in a queue at the Hazrat Shahjalal International Airport in Dhaka
File photo of Bangladeshi workers bound for Malaysia waiting in a queue at the Hazrat Shahjalal International Airport in Dhaka Syed Zakir Hossain/Dhaka Tribune

In poverty alleviation, overseas migrants stand far behind both internal and non-migrant households

Every year, thousands of young people leave the country for overseas to change their lives for the better, but very few come out successful. The majority of them reel under the vicious cycle of poverty, having to repay loans they took in order to obtain work. 

Currently, high migration costs but low wages of Bangladesh migrant workers are a major challenge.

Mahmud Hasan (23) of Tangail underwent skill development training prior to his journey overseas. Last year he went to Singapore, spending Tk4 lakh for a one-year contract. Now he has returned to Bangladesh. During his stay in Singapore, he sent Tk20-25,000 per month to his family. He has an opportunity to go overseas again for less than before (Tk1.5-2 lakh), and he has obtained a skill certificate –but now he is short of money. 

“I worked hard but wasn’t able to change my fate. I took loans amounting to Tk3 lakh from my relatives and moneylenders. I am paying almost Tk15,000 as interest every month, because the interest is 5% per month. Of the total money I borrowed, I have already paid Tk1 lakh with interest during the last year. Now I have to take loans again,” Mahmud Hasan told the Dhaka Tribune.

A recent study titled “Impact on migration on poverty and growth in Bangladesh,” surveying 2,200 migrants and conducted by the Refugee and Migratory Movements Research Unit (RMMRU), shows that 65% of overseas migrants take loans to go abroad.

Overseas jobseekers generally obtain loans from their family members or relatives. The study revealed that about 35.4% take loans from family members, 18.7% obtain loans from moneylenders, 7.2% from local banks, 2.6% by mortgaging land, and 0.3% from foreign banks.

RMMRU chair Tasneem Siddiki, a professor of political science, said labor migration costs have come down a little, and that has brought a decline in borrowing rates. These are positive signs, but a lot remains to be done. The government should bring labor migration costs within affordable limits, ensure safe migration, and raise awareness on migration issues and reintegration.

Among surveyed households, the poverty rate was 16.51% in 2017, while it was 19.70% in 2014, with a decline of 1% each year. But in the case of poverty alleviation, overseas migrants stand far behind both internal and non-migrant households.

Among overseas migrants, the poverty rate is 9.60%, while among internal migrants it is 28.08%, and for non-migrants it is 17.52%. In comparison, since 2014 to 2017, the poverty rate among non-migrants has declined by 28%, and among internal migrants by 12.68%, but in the case of overseas migrants it has declined by only 7.11%.

Currently, the average monthly income of overseas migrants is Tk32,815, while the average migration cost is nearly Tk2.76 lakh. The average cost for male migrants is a little over Tk3.42 lakh, while for female migrants it is Tk89,877 on average.

Experts say the cost of migration, loans, and interest, are responsible for this scenario. 

Shariful Hasan, head of BRAC’s migration program, said the overseas migration cost from Bangladesh is the highest in the world, while the salary range is the lowest.

Migration costs should not be more than the salary of three to four months. Migrant families would not benefit unless the government takes measures to reduce migration costs. Bangladeshi migrants earn very little money, and most of their earnings are spent to bear living expenses. 

“Skill development for migrants is very important,” he added.