Bangladesh Exclusive: Remittance growth belies expectation, defies slowdown

In contrast to the grim outlook, remittance inf low into Bangladesh reached a record high of $9.68 billion in the financial year ending30 June 2009 (FY2008- 09). This was 22.3% higher than $7.91 billion, a previous best, posted last year. The impres s ive per formance defied the forewarnings from the World Bank, International Monetary Fund, Asian Development Bank and local analysts that remittance inflows would slump in 2009 due to the global recession. According to official data from Bangladesh Bank, the central bank of the country, the remittance figure also hit a new high of $911.61 million in June 2009 – the first time it crossed $900.00 million mark - up $16.31 million over the previous month. The upward remittance curve also shored up the foreign reserves to $7.42 billion as on 5 July 2009. This is enough to meet import costs for five months.

The central bank Governor, Mr Atiur Rahman said “The expatriates have sent more remittance into the country than in normal time despite the global economic recession. And this remittance is playing a vital role in the country's economy. The expatriates tend to avoid banks and remit through illegal hundi, as it takes more time and cost in case of banks. If the banks can be cost-effective and speedier, then the expatriates will choose them.”

The central bank indicated it would take initiatives to divert more funds through the legal channels. The possibility of using post offices and mobile-phone services would also be looked into. Four state-owned commercial banks and some private commercial banks have stepped up efforts to increase the flow of remittances from the Middle East, the UK, Malaysia, Singapore, Italy and the US.

Senior Executive Director, Bangladesh Bank, A.T.M. Nasir Uddin said “We're taking more steps to increase the flow of inward remittance. We hope the flow will maintain its bullish trend because of our continuous efforts. We are establishing new contacts with overseas exchange houses so that our overseas workers can find it easy to send money back home.”

Recently, Bangladesh President, Zillur Rahman has called on government ministries and foreign missions to extend all support to non-resident Bangladeshis (NRBs) so that they can contribute to the country's development.

Rahman said “NRB remittances play an important role in our economy…we need to divert this money to a productive sector to develop the country. We need to train and develop the huge manpower resource we have…not only as labourers, but also as efficient engineers, doctors, IT specialist and academics.”

In view of the country's remarkable performance amidst turbulent economic conditions, the World Bank projects an 8.4% to 12.3% growth in remittance inflow for the current financial year.