Bangladesh: Recruitment bans may curb growth in remittance

Bangladesh has witnessed robust growth in remittances in recent years. This has been led by good demand for blue collar jobs in Asian countries, particularly the Middle East. High remittance flow has also helped to reduce the poverty level, by about 6% (World Bank, 2006). However, recent reports about ban on recruitment of lowskilled Bangladeshi workers in traditional work places highlight a threat that may reverse the trend in remittance flow.

According to central bank figures, remittances sent by expatriate Bangladeshis soared 33% in fiscal 2007-08 to $7.94 billion, compared to $5.97 billion a year ago. Going by the healthy trend in recent months, the bank expects similar growth in the current fiscal.

Unlike many other developing countries, majority of the remittances come not from the US, but Saudi Arabia. Other Middle East and Asian countries such as UAE, Kuwait, Malaysia, and Bahrain also contribute sizeable remittances. Another characteristic feature of Bangladeshi expatriates is that majority of them are engaged in blue collar jobs. Out of the five million Bangladeshi Diasporas, about three million reside in the Gulf countries and send 70% of total remittances.

Even though the current year shows a robust trend in remittance growth, a disturbing development has unfolded in the form of the ban on fresh recruitments from Bangladesh in many Asian countries. As reported by the local media and agencies, countries such as Bahrain, Kuwait and Malaysia have stopped issuing work permits or visas to the menial workers from Bangladesh, on diverse grounds. Saudi Arabia, the biggest source of remittances, has stopped renewing residential permits to Bangladeshis (except professionals) from May 2008.

If the trend persists, industry sources fear, the high growth in remittance flow to the country may face either stagnation or a reversal, depending on the extent of such prohibitory measures.