Expatriate Bangladeshis sent $1.64 billion in January, which was 3.13% lower than December 2019
Remittance inflow may plunge drastically in the coming months as coronavirus pandemic forced countries that employ over 1.25 crore Bangladeshi workers to enforce lockdowns in an effort to halt the spread of the novel virus, experts fear.
The $16 billion plus yearly remittance is considered the lifeline of the local economy amid its above 20% growth registered in the first eight months of the current fiscal year, thanks to the 2% incentive scheme of the government.
The inflow of the increased remittance in the country helps keep rural economy vibrant and forex reserve stable, cushioning any external financial headwinds, an expert says.
“Households of above one crore expat Bangladeshis will be left in financial shambles and expose to extreme poverty if the covid pandemic persists in the global economies, particularly in countries where most Bangladeshis are employed,” Bangladesh Bank (BB) Former Governor Salehuddin Ahmed has told Dhaka Tribune.
He says the negative growth in remittance will be felt in the coming months, particularly after the Eid-ul-Fitr.
Expatriate Bangladeshis sent $1.64 billion in January, which was 3.13% lower than December 2019.
The figure further dropped in February, as expatriates sent $1.45 billion, down by 11.35% from January, according to Bangladesh Bank data.
A sum of $1.06 billion was remitted by the expats as of March 19, as per the latest BB data.
Bankers say restriction on international travel, enforcing complete lockdown and shutting down remittance houses, banks and business centers in countries where major Bangladeshis are employed could be the key factors behind a possible slump of inbound remittance in the coming days.
Many expatriates already returned back home due to the deadly virus. As a result, the inflow of remittance will drop significantly in future, they add.
"Remittance inflow began slowing down and inflow will drop alarmingly in the coming days due to global economic stagnation felt as a consequence of coronavirus," says Md Abdul Halim Chowdhury, Managing Director and CEO of Pubali Bank Ltd.
“We do not have adequate supply of US dollars anymore due to the declining trend of remittance,” he adds. If the pandemic situation persists in the United States, the United Kingdom and in the United Arab Emirates, remittance inflow will fall significantly,” he cautions.
Remittance inflow may drop in the coming months as many expatriates rendered jobless as lockdowns were enforced in the countries they are employed, says Mohammad Shams-Ul Islam, Managing Director and CEO of state- owned Agrani Bank.
In the first 19 days of March, expatriates sent $138.67 million through Agrani Bank, which was lower than the same duration of previous month, he adds.
In the last quarter (October to December) of 2019, the largest amount of remittance worth $1billion was remitted from Saudi Arabia followed by the United Arab Emirates , United States of America , the United Kingdom , Kuwait and Malaysia, according to the central bank data.
Talking to Dhaka Tribune, Bangladesh Bank former governor Salehuddin Ahmed says the fuel price dropped significantly in the global market owing to the virus.
"This will reduce the demand for jobs in many countries. Most of Bangladeshi expatriates now risk losing their jobs," he says.
This may affect Bangladesh’s foreign labour market. As a result, the remittance inflow may drop further, he says.
Salehuddin suggested the government take necessary measures immediately to help halt any slump in remittance. The government should communicate with the countries where most Bangladeshis are employed to ensure their jobs continuation.
The flow of remittance saw an upward trend in the current fiscal year as the government and Bangladesh Bank took a number of measures to encourage legal channels for encouraging non-resident Bangladeshis to send money to their home country.
In the current budget, the government offered 2% incentive on money remitted through banks by expatriates.
Typically, largest amount of remittance is channeled into the country through Islami Bank Bangladesh ltd.
Talking to Dhaka Tribune, Islami Bank Bangladesh Deputy Managing Director Abu Reza Mohd Yeahia says, “Kingdom of Saudi Arabia, the United Arab Emirates and United States of America are the main remittance sources for our country. Now these countries announced complete, or partial lockdowns to defeat corona. As a result, the remittance inflow will be affected for both short term and long term.
According to a central bank report, in 2018, 43.25% of the Bangladeshi expatriates were skilled followed by 38.55% un-skilled, 16.04% semi-skilled and the rest 0.36% was professionals.
Bangladesh ranked 9th in 2018 among the world’s remittance earner countries, according to a BB report.
Expatriate Bangladeshis sent $16.41 billion in the 2018-19 fiscal year. They sent $12.49 billion in the first eight month of the current fiscal year, as per Bangladesh Bank data.
Currently,12.3 million Bangladeshi workers are employed in 165 countries around the world, according to a data of the Ministry of Expatriates’ Welfare & Overseas Employment.
Policy Research Institute Executive Director Ahsan H Mansur have said expatriate Bangladeshis in Germany, Spain, Italy, France, the United States and the United Kingdom are now trying to protect themselves from the ongoing crisis owing to deadly coronavirus because those countries are now under lockdown. As a result, it is difficult for them to send money to their relatives, he adds.
“On the other hand, the cornovirus situation in the Middle East is not good. The price of crude oil has fallen in the world market owing to the virus. Most of the expatriates will lose their job due to the declining price,” Ahsan, also the Chairman of BRAC Bank, says further.
Mansur says already many expatriates have returned from abroad and a portion of them may not go back, which will adversely affect to remittance inflow.
“New manpower exports also have stopped for few months. We do not know about how long the situation will continue. As a result, there is no good news for us. Remittance inflow would be impacted badly for the long time but there is nothing to do at this moment.”