Bangladeshi migrant workers defy World Bank predictions on remittances

September 9th 2009

Simon Harding

Bangladesh has bucked the global trend of declining remittances, says the country’s Central Bank. The World Bank predicts that international remittance flows will decrease between 5-8% in 2009, but the populous Asian nation has seen its remittances reach a monthly total of $937m in August 2009, a record monthly total and a 30% increase on August 2008. ‘This is the highest monthly remittance we have received in our history said Ziaul Hasan Siddiqui, deputy governor of the Central Bank, ‘the figures also show that the global recession had little impact on the flow of remittance to Bangladesh although job opportunities in the major markets have declined in recent months’.
There are an estimated 6.5m Bangladeshis working abroad, mostly in the EU, USA and Middle East. Their remittances are the country’s second biggest source of income and have been credited with reducing poverty in recent years as households benefit directly from funds sent home by relations overseas.

There are several reasons why Bangladesh has successfully confounded the dominant downward slide in remittances. Firstly, Bangladeshis tend to occupy the dirty, difficult and dangerous jobs, which are relatively sheltered from the recession in Europe and the US. For example, the lower end of the restaurant and catering industry in the UK. Secondly, the upcoming religious festivals of Ramadan and Durga Puja provide incentives to remit money for both Bangladesh’s Muslim majority and minority Hindu populations. Thirdly, it is often claimed that remittances are counter-cyclical: more money is remitted when relatives at home are hit by political instability, recession or natural disasters. Whilst Bangladeshi migrants in the EU and US face economic hardships, like job losses or wage cuts, this may appear trivial when compared to the hunger and suffering caused by increasingly regular and intense flooding in Bangladesh.

The Bangladeshi government is well aware that the global recession has reduced employment opportunities for migrant Bangladeshis. Keen to safeguard a valuable source of foreign currency, it has located seven countries (among them Sudan, Greece, Romania and Lebanon) in which, it believes; Bangladeshi workers can fill gaps in the labour market.
Although Bangladesh has avoided the global drop in remittances, relying on overseas nationals to provide income is becoming an increasingly risky strategy. Heavily interlinked financial markets mean that crises spread rapidly and far beyond their countries of origin: their effects are now global. It is increasingly likely that economic problems in migrant sending countries will correspond, or be linked to, downturns in richer nations, removing migration’s function as a risk spreading tactic. Moreover, international migrants are always vulnerable to short term populist policies in migrant receiving countries. Foreign recruitment bans and anti-immigrant sentiment are cheap and effective ways of distracting voters from domestic economic shortcomings and boosting nationalism and government popularity.

Also see: ‘Expats boost Bangladeshi Economy’, Anbarasan Ethirajan, BBC World Service, 7/09/09. Available at: http://news.bbc.co.uk/1/hi/world/south_asia/8240938.stm