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The role of remittance in our economy

The remittance inflows from the foreign countries have changed our national and domestic life
Dr. Forqan Uddin Ahmed
The role of remittance in our economy

Remittance has increased the extent of investment in the country by the migrant workers.  Bangladesh now has been graduated to a developing country. It is no more a least developed country.

We are in the race to become a developed nation by 2041. The economy of our country is not self-dependent or self-sufficient. We cannot properly use our natural resources for shortage of our domestic capital. In this regard, remittance is playing a vital role for our country. Remittance has already changed our livelihoods as well as our economic growth. Moreover, remittance has an effective role on rural infrastructural development. The migrant workers, who send money from the foreign countries, are accelerating economic growth and development. Thus, remittance has been turned into the second largest financial inflow to our country.

It is very much necessary to establish government policy of remittance. Otherwise, the workers will be the ultimate losers. So, government should follow the necessary steps. The first step is to ensure disbursement of remittance within hours, secondly all remittance would be tax free if they use proper banking system. Thirdly, banking charge has been deducted for sending remittance in domestic country, the other mentionable steps are to use various types of facilities so that the workers may send money along the office channel and we should let the workers know the negative side of money laundering, lastly, we should largely preach the rule of money laundering step.

Overseas workers are sending remittance, which is increasing year by year. Bangladesh, the eighth biggest remittance recipient country in the world, relies on such inflows to drive consumer spending, which accounts for nearly 80 per cent of domestic GDP. Saudi Arabia is the highest source of the remittance in our country. The UAE’s position is the second and third is Qatar. According to Bangladesh Bank, in 2017-2018 the remittance inflow was 10761.69 million US dollar and in 2016-2017 it was 12769.45 million US dollar. So the government should take in this area and control illegal system of remittance as well as social moment would be run so that every worker would be more conscious.

The workers who are working in overseas mainly come from rural areas. They buy luxurious products like TV, camera, smartphone, computers etc. If we can ensure this money for our betterment, our country would bear more facilities as well as our national income would be developed. We see most of the workers use their remittance in small business agricultural production. It is high time we understood these workers invest remittance in productive fields.

The government as well as the general people of our country is very alert about remittance flow. The remittance inflows from the foreign countries have changed our national and domestic life. It plays a vital role in running our economic activities. Bangladesh has huge shortage of domestic capital. We are not capable of providing speediness to domestic capital. In this regard, remittance has played a pivotal role in giving strength to the economy. It has helped increase the economic activities of our country. Because of increasing of inflow in remittance, economic activities at the grassroots level have increased; especially economically backward people have come under the shadow of mainstream economic activities of Bangladesh. As a result, the rural areas have changed a lot in terms of infrastructure and at the same time, poverty has been decreased.   

Bangladesh is an over-populated country. Here formal job sector is very limited. So the migrant workers have huge opportunity to be employed in foreign countries. Besides, we can say that the expansion of remittance flow has enhanced employment opportunity in our country. Investment is prerequisite condition for establishing industrialisation in Bangladesh. Remittance has increased the extent of investment in the country by the migrant workers. Furthermore, remittance has fulfilled the scarcity of domestic capital in time of conducting industrialization process. It has already proved that remittance is the second largest field to make our national economy resilient. It has given strength to accelerate overall growth and development.

We know that in the absence of a planned remittance arrangement, the money sent to the migrants is not being spent properly. Most of the hard-earned foreign currency is spent in all sectors where no financial gain or income comes from it. That is, the use of remittance takes precedence over unproductive work. But if the planned use of this hard-earned foreign currency was ensured, the family of the migrant worker as well as the economy of the whole country could be changed. And to do this, every migrant worker has to take into account his financial and personal position. In that arrangement, his personal and economic development for the country will be specified. In addition, it is important to formulate a policy on how to keep an immigrant worker involved at all times in the country's development flow. And the government must come forward to take these measures. Surveys in several countries, including Mexico, the Philippines, have found that the financial comfort of remittance families has enabled them to acquire new wealth and invest freely in business or economic activities.

A similar pattern is also found in Bangladesh. Indeed, remittances sent by immigrants increase the income of their families but overall they help the country to grow. Whatever we say, the extent to which these remittances can contribute to the economic development of the country depends on the transparency, performance and overall economic environment of the internal institutions of that country. That will depend on the proper leadership and the application of the principles laid down in the proper use of the money received from the remittance, how much we will be able to develop through remittance.

It is true that remittance money solely owned by the remittance sender or recipient’s authority. That is what is happening. But if that money can be invested in a more profitable sector under the management or supervision of the government, then the migrants must be willing to contribute to the fund. And this investment will not only improve the financial situation of the families of the remittances but also accelerate the pace of economic development of the country. However, in order to encourage the families of remittances in this regard, a policy will need to be formulated with specific incentives. And the government has to take that step too.

About one billion Bangladeshis are working in exile and every day new workers are going abroad for work; many are coming back after the action.

The number of our migrants working abroad is increasing day by day. Considering this situation, if we assume that a worker contributes at least $ 10 per month, then the total deposit will be  $ 80 million a month, about a billion dollars a year. I believe that if Bangladesh constitutes such a ‘national development fund’, then with that money the work of major development projects of the country can be completed, no need to go from door to door for foreign loans or be bound by various conditions. As a result, economic development of the country will not only happen, it will make us a self-reliant and dignified nation.

Therefore, if the present government is interested in forming such funds, then it should take immediate steps without delay. However, the Bangladesh government may also consider other matters mentioned here.

From above discussion, we can say that the flow or inward remittance decreased further in this year over that of the previous year. Bangladeshi nationals working abroad sent US$ 1159.09 million in October 2018. According to Bangladesh Bank, we see remarkable fall of remittance an amount in $ 259 million from that of August month. In April, the remittance was $ 1.001 billion. Bangladesh Bank has taken initiatives, a series of measures to encourage expatriate Bangladeshis to send their hard-earned money through the formal banking channel. They have discouraged Bangladeshi migrant workers to avoid the illegal way of sending foreign currency in Bangladesh through hundi. As a result, it will save the economy of Bangladesh from being broken down. So, the government as well as legislators should ensure the worker’s rights and solve their problems as early as possible.

The writer is a  researcher

and columnist

 

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Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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