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Remittance Analysis |
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An Overview of Remittance Analysis from Manpower Export .
Bangladesh like other South-Asian countries is a manpower surplus country with a combination of professional, skilled, semi-skilled and less-skilled labour force and on an
average 2,50,000 people annually (1995-2003) migrated to take up overseas employment from Bangladesh. There were more than four million Bangladeshis migrated overseas for employment between 1976 and 2007 through official channels.The flow of migrant workers is associated with the growing flow of remittance to a country. It was estimated that 60 per cent of global remittances were sent to developing countries in the year 2000.
During the period between 1976 to 2009, Bangladesh received about US$ 67.68 billion as remittance. However, the amount of remittance would have been much higher if the country could send more professional and skilled workers. |
Remittance Flow of Bangladesh :
The remittance received by Bangladesh in 1976 was only US$ 23.71 million. Then it continued to increase until 1983. The remittance showed a downward trend during the next couple of years. However, the remittance gained momentum in 1992 and showed a persistently increasing trend until 2010 when the country received US $10987.40 million as remittance. A relatively large share of Bangladesh's remittance came from the Middle-Eastern countries. If one looks into the sources of remittance at least for the last ten years, obviously the countries of the Middle-East, Malaysia and Singapore constitute major sources of the total remittance for Bangladesh.
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| Flow of remittance in Bangladesh during 1975 to 2011
Year Remittance earned
(in million US$)
1975-76 23.71
1979-80 301.33
1984-85 500.00
1991-90 781.54
1994-95 1201.52
1999-00 1954.95
2004-05 4249.87
2008-09 10720.20
2009-10 10987.40
2010-11 (up to April) 9587.15
Source: BAIRA- 2009 & BER-2011
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For the year 2009, it is observed that the countries in the Middle-East constituted a large part (59.45 per cent) of the total remittance. Of the amount, the highest (26.67 per cent) came from Saudi Arabia, 16.37 per cent and 9.05 per cent came from the United Arab Emirates and Kuwait respectively. Besides, Bangladeshi migrants in the USA contributed 14.67 per cent, the UK 7.36 per cent, Malaysia 2.63 per cent and Singapore 1.54 per cent. The remaining 14 per cent came from other countries.
Since 1976, remittance has been playing a significant role in the economic development of Bangladesh. The role of remittance has in fact been quite obvious in the last decade. In 1999, remittance was 1.17 times higher than the foreign aid received and 9.12 times higher than the
foreign direct investment (FDI). In 2009, the 'times' went up to around 5.90 for overseas assistance and 11.39 for FDI. This means that yearly remittance has always been exceeding foreign aid and FDI in Bangladesh
Statistics shows that increasing flow of remittance has been reducing Bangladesh's external aid dependency. It particularly attracted the development partners and had a major influence over the policymaking process of the country. The growing formal inflow of remittance, equivalent alone to more than 50 per cent of total government revenue, has also been reducing dependency on FDI in Bangladesh.
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In 1999, remittance as part of GDP and export was 3.74 per cent and 32.04 per cent respectively. In 2009, formal remittance as part of GDP and export stood at 10 per cent and 68.37 per cent respectively. This means that the amount of remittance in terms of GDP and export earnings increased over the period 1999 to 2009. Such growing contribution of remittance inflow to GDP and export has not only assisted to meet the increasing trade deficit but also maintain a stable foreign currency reserve.
Foreign currency aspect of remittance is especially important as Bangladesh runs a trade deficit and is currently suffering from a foreign exchange crisis. Growth in remittance is one of the key factors in maintaining foreign exchange reserves. The steady growth of inward remittance and falling import payments has contributed to the higher growth of reserves. The growing contribution of inward remittance to foreign exchange reserve has been helping Bangladesh to make up the deficit between total export and import and to maintain the balance of payments, and thereby also economic stability. |
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