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Getting Out, Getting On: International Labour Migration Remittances

The other heavy hitter in the national accounts is remittances from international labour migration. Bangladesh ranked eighth in the world in total remittance earnings at USD 14 billion in 2012 (BBS 2014); was among the top ten countries for emigration, with 7.6 million migrants in 2013; and is among two of the world's busiest immigration corridors, one with India and the other with Saudi Arabia (World Bank 2016). Remittances from international labour migration have grown particularly fast since the 2000s (see Figure 8.1), and the latest figures suggest almost ten million Bangladeshis, mostly men in their twenties and thirties, were abroad as temporary workers (MoF 2015b). But growth has been uneven in the 2000s, increasing by 32 per cent in 2008 and declining by 1.6 per cent in 2015 (Kathuria and Malouche 2015). In the most recent year, around half of all remittances were from the oil-rich economies of Saudi Arabia, the United Arab Emirates, and Kuwait; most of the rest was from the US, Malaysia, and the UK, although migration to both Singapore and Oman rose fast in recent years (MoF 2015b). A small but fast-growing group of migrant workers are women—from 0.54 per cent of migrants in 2002 to 13 per cent only a decade later; around one-quarter of a million Bangladeshi women have officially migrated for work since the 1990s, although taking into account unregistered migration, the true figure is likely to be double that (ILO 2014a).

Remittances are hugely significant for the national economy. The macroeconomic impact of overseas remittances in Bangladesh remittances includes improving the balance of payments, raising national income, finance for productive investment, higher consumption, and counter-cyclical effects (the evidence is summarized in Hatemi-J and Uddin 2014, 376; see also Siddiqui 2005). Bangladesh's respectable first ever financial markets ratings in 2010—BB from Standard & Poor and Ba3 from Moody's—were credited to the 'high share of remittance flows in GDP and their high growth rate'

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Labour migrants and remittances, 1973-2014 Source

Figure 8.1. Labour migrants and remittances, 1973-2014 Source: Bangladesh Bank 2016, Table XX.

(Mohapatra and Ratha 2010, 308). The 'manpower export' industry has also prompted financial service development, with Bangladesh pioneering mobile money and banking technologies, to speed up and ensure safe international remittances (Mohapatra and Ratha 2010). In 2011, a bank was set up specifically to support would-be migrants with the costs of migrating; these average between BDT 200,000 and BDT 300,000 (USD 2,600 to 3,800 as of April 2016; xe.com) to get to the Middle East, and can take two or three years for a migrant worker to repay (Rahman and Hossain 2012).

Remittances are of equal importance for the sending-household economy, but the extent of unofficial migration means official figures cannot capture their true impact (Rahman and Hossain 2012). The recent BBS survey tells a clear story about the poverty impacts of official migration. In 2013, most migrants were from disadvantaged backgrounds: fully 85 per cent of the heads of remittance-receiving households and 70 per cent of the migrants themselves had less than secondary education. For 78 per cent of receiving households, remittances were their primary source of income. The majority send money home to parents (45 per cent) and spouses (39 per cent), and although remittances are generally spent on everyday consumption, 88 per cent invested in property, building a house or buying an apartment (BBS 2014). But while remittances all but self-evidently reduce household poverty, the relationship works the other way too, so that reduced poverty also leads to higher earnings from labour migration and 'remittances and poverty reduction are causally reinforcing each other in Bangladesh' (Hatemi-J and Uddin 2014, 380). Remittances are a measure of migration success, however, and not all succeed: many migrants are cheated or fail to repay the debt incurred, or otherwise see few benefits from the experience (Kibria 2008).

 
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