Migrants and Remittances: Strategies for Future

by Barrister Harun ur Rashid | April 1, 2008 8:20 am

The remittances from migrants contribute significantly to Bangladesh’s socio-economic development. The remittances have a multiplier effect not only for the family members but also for the people in general.

It is reported that about 5 million Bangladeshi workers are now abroad, spreading almost in 100 countries. Last January it is reported that about 92,000 have found employment overseas and that is a good record. Last year about 832,000 Bangladeshi workers have found employment abroad. 85% per cent of Bangladeshi workers go to the Middle East countries.

As far as women workers, according to Bangladesh Manpower Employment and Training Bureau the number of women workers reportedly stood at 74,074 of August 2007. Of them 54,835 left the country in the last three and half years.

Some say that the figure will be more because there are many unauthorized agencies in the country that send women workers abroad (only seven recruiting agencies are being authorized by the government for sending women workers).

It is reported that among total expatriate workers, six per cent constitute female workers.

Total remittances:

Remittances from migrant workers have crossed over US$6 billion in 2006 contributing 8.7% per cent of the Gross Domestic Product (GDP) of the country. It is the second foreign exchange earning for the country after the export earnings of the garment sector that contributes 12.7% per cent of the GDP.

This year about $7 billion are being expected from remittances. By 2015, the target is about $ 30 billion dollars and right strategies must be put in place to meet the goal.

Remittances are influenced by (a) wage rate, (b) exchange rate and (c) relative interest between the sending and receiving states and (d) easy availability of facility of remittances.

The interesting part is that semi-skilled and unskilled workers send on regular basis money to their near and dear ones, while the professional and educated class of migrants does not largely send money to their families. Rather they transfer money from Bangladesh to their places of residence abroad for their material comforts.

Why do people migrate?

Migration is a social process that is historically seen in a politico-economic context. During the 16th and 17th centuries Europeans migrated to new countries such as in America, Australia, Latin America and Africa for better quality of life and opportunity.

There are several reasons for migration and some of them are:
(a) economic and demographic factors
(b) civil wars and discrimination among minority community
(c) promotion of entrepreneurial skills
(d) opportunity known to be available in foreign countries.

A study for Britain’s Department for International Development found that three-quarters of African immigrants have university education and roughly half of Asia’s and South America’s. Of the one million people from India living in the US, three-quarters of those of working age have a university degree.

In future the number of migrants from developing countries would increase because of the ageing population in the industrialized countries.

According to a report in the next 30 years, the labour force in Germany will shrink from 41 million to 21 million, in Italy from 23 million to 11 million. Japan will require about 90,000 a year falling to a longer-term figure of about 700,000 a year.

.Undocumented workers:

The undocumented workers, otherwise known as illegal workers, contribute to the economy of the receiving countries. But they have no legal protection and they suffer from low wage, harassment and humiliation in the receiving countries.

Although they are engaged in jobs what are known as 3-D jobs (demanding, dangerous, and demeaning or dirty, dangerous and difficult), they are not covered by the 1990 UN Convention on the Protection of Rights of All Migrant Workers and Members of their Families because the receiving states have not ratified the Convention.

The Convention enjoins state-parties to ensure that working and living conditions of undocumented workers should not be less favourable than those applied to national workers for the sake of health, safety, fitness and human dignity of workers.

Bangladesh together with other migrant-sending countries may robustly campaign within the UN and other international and regional forums for the ratification of the UN Convention by the labour-receiving countries.

Suggested Strategies:

The thumb rule is higher the skill of the migrants, the remittances will be bigger. The question is how to capture the emerging labour market by Bangladeshi workers. Accordingly, many experts suggest three essential strategies, among others, need to be put in place to meet the goals.

First is the English-language or foreign language skill is to imparted to migrants and second is the establishment of vocational schools in the country so that well-qualified trades people, such as carpenters, auto-mechanics, air-conditioning technicians, joiners, masons, plumbers, and electricians can migrate to overseas as there is a huge demand of trades people in the industrialised countries. Third, health care workers need to have the international standard of quality of education and training as they are in a great demand.

Furthermore women workers need training before they leave abroad. Often they are misled and abused by unauthorized agencies. Many of them fall victim to cheating and they are not provided with jobs they are promised. In government sector, reportedly there is one training centre in Mirpur and six centres have been set up in divisional level. Many more centres need to be set up together with private sectors.

These strategies could be in place through the joint initiative of government and private sectors. Bangladesh may derive benefit from the experience of the Philippines.

Remittances and certain open questions:

Although remittances have grown to become a central factor in the domestic economy of the country, certain issues need to be further investigated such as:

• How can government improve on incentive schemes to channel remittances to productive investments?
• Is there a role for micro-finance institutions in linking formal remittances to development?
• Is it feasible to pool migrants’ savings and form mutuals or pension funds?
• How does one best bring about improvements in the existing banking network in its ability to compete effectively with informal arrangements?
• Has there been as assessment in the context of hypothesis that incentive schemes tend to meet with limited success when other relevant micro-economic factors are unfavourable?
• How does a financial crisis affect the issue of remittances?
• How to stop leakages of about 20% remittances through unofficial channels despite various policy initiatives to steer remittances toward the formal banking or post office sectors?


The subject of remittances is in the final analysis inseparable from the broader issues of mobility of labour, ageing population in many industrialized countries, and international migration, such as the number and characteristics of migrants and the rates at which they return home.

Migration issue is not all about control of immigration but an issue of the 21st century where demand for young workers will increase in the industrialized countries. Accordingly there must be a sensible policy in which both sending and receiving countries may reconcile their interests for peace and harmony in the world.

Bangladesh with its younger population must seize the opportunity to send skilled workers to industralialised countries. The need of coordination and cooperation between government and private sectors is imperative in the country. Hopefully all stakeholders will rise to the occasion to have a compact with regard to smooth migration

By Barrister Harun ur RashidFormer Bangladesh Ambassador to the UN, Geneva.

Source URL: https://priyoaustralia.com.au/articles/2008/migrants-and-remittances-strategies-for-future/