Significance of Remittance Income for Bangladesh Economy

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Offline rahim2008

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Significance of Remittance Income for Bangladesh Economy
« on: June 02, 2013, 01:27:47 PM »
Remittances have been continuously playing an increasingly large role to the economic growth and the livelihoods of people in Bangladesh. Remittance income is more valuable for any developing country like Bangladesh. Puri and Ritzema (2001) tell that remittance is the portion of international migrant workers’ earnings sent back from the country of employment to the country of origin, play a central role in the economies of many labor sending countries. Osmani (2004) tells that remittances have been identified as one of the three factors that have been responsible for reducing the overall incidence of poverty in Bangladesh.  The demand of migrant workers remittances has now increased tremendously in Bangladesh in a number of reasons. These are as follows:

i)   Remittance contributes to our national economy is a large scale by increasing foreign exchange reserve, per capita income and employment opportunities
ii)   It has been continuously lifting-up the GDP (Gross Domestic Product) of Bangladesh. In 2012, the remittance which has sent by the migrant workers is the 11 percent of the total GDP of Bangladesh.
iii)   Remittance has been continuously keeping the contribution to alleviate the poverty of Bangladesh through micro-enterprise development, generating substantial employment and income.
iv)   The government has been paid various government and non-government import bills and investments of different foreign debt & donation from the remittance income.
v)   Remittance income helps the government of Bangladesh to reduce dependency on foreign aid.
vi)   Remittance helps to improve the balance of payment position of Bangladesh.
vii)   Remittance also contributes to the expansion of financial market activities and the development of payment systems through enhancing direct capital flows and distributing those funds to users end and for investment or finance consumption purposes.
viii)   The government of Bangladesh is using remittance income to build schools, colleges, universities hospitals, roads, & highways, bridges, culverts etc.
ix)   Remittance income is positively the socio-economic condition of migrant families.
x)   Remittance income makes more strong local currency (Bangladesh) against US dollar.