Problems and prospects of labour migration from Bangladesh

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Offline Rozina Akter

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The steadily rising flow of remittances from Bangladesh migrants abroad provides a welcome relief amidst the gathering storms generated by political stand-off, widespread violence, terrible industrial accidents and scandals in the financial sector. This piece is intended to look at the big picture of the sources and key players of these remittances and to suggest the ways of sustaining the momentum.

The big picture:

* According to World Bank data, Bangladesh is the sixth largest labour exporting country with a migrant population variously estimated as 6.0 to 7.0 million. That number, interestingly, is higher than the population of at least 100 countries of the world.

* Until FY 2006-07 annual outflow of migrants recorded by the Bangladesh Bureau of Manpower and Training (BMET) fluctuated between 200,000 and 300,000. It sharply rose thereafter to reach a record 981,102 in 2007-08. However, worldwide financial meltdown in 2008, accompanied by widespread recessions across the host countries, saw the number sliding down to around 500,000 before picking up to about 700,000 in 2011-12.

* Bangladesh has very strong presence in the Gulf region and Malaysia. Particularly significant is its strong contingents of migrant workers in Saudi Arabia, UAE, Kuwait, Oman and Bahrain. Of them Saudi Arabia alone accounts for 41

per cent.

* Outside the Middle East, Malaysia is a major destination accounting for about 12 per cent of our migrant population. Unlike the Gulf region, they seem to have carved a niche in the Malaysia's social structure as evidenced by grant of citizenship to many migrants and participation in the recently held general election which, incidentally, kicked up a lot of dusts in the air. The wage level in Malaysia, however, is lower than that in the Middle East.

* No systematic record is maintained for people going on employment in North America and Britain but these are important sources of remittances. Some European countries such as Italy, Spain and Greece Russia and Romania are also becoming attractive destinations for Bangladesh workers.

* Globally, about half of all migrant workers are women. However, 95.50 per cent of the Bangladesh migrants are males; women chip in with a negligible 4.5 per cent. Social taboo, reinforced by government's mistaken perception of female migration in the past on altruistic grounds, is the main reasons for this thin outflow.

* Bangladesh's southern part accounts for the lion's share of migrants, with Dhaka and Chittagong Divisions monopolising with 78.20 per cent; the remaining five Divisions account for only 21.20 per cent. At the district level, Comilla leads with 15 per cent, followed by Chittagong 13 per cent and Tangail 8.0 per cent. Their share is bigger than the entire three northern and southern Divisions

* A sample survey undertaken under an ILO-funded programme revealed that a typical semi-skilled or low skilled migrant does not have a general or technical education and training. They are employed in lowly jobs with wages of around the equivalent of Tk 13,000 a month. However, masons, electricians, plaster technicians are among the better paid workers with wages ranging from TK 14 to 20 thousands; welders are a shade better with wage a levels of Tk 26, 000+.

* Bangladesh recruiting agents receive substantial demands for low or semi-skilled workers mainly because they are cheap, willing to perform lowly or even hazardous work. Most importantly, the agents pay a very high premium (TK 120,000 to 200,000 equivalent) for securing job orders compared to competing nations.

The size and importance of migrant remittances:

* Based on the trend of migrants' remittances during the first 11 months of the current financial year recently released by the Bangladesh Bank (BB), the volume of migrants' remittances is expected to reach close to $14.60 billion in FY 2012-13. To this another $4.0 to 5.0 billion can be reasonably added to account for the money sent through unofficial channel. Contrary to popular perception and prejudices against remittances through unofficial channel, these remittances more or less serve the same purpose as that booked in the official records.

* This money and the spin-offs from labour export including consumer durables and other goods brought by the migrants under the Baggage Rule add up to at least $20 billion a year. It is four to five times higher than the net foreign exchange earnings through the much hyped ready-made garment (RMG) sector (after adjustment of foreign exchange costs of imported inputs). It is also about 10 times higher than the amount of foreign aid received in a typical year with plenty of strings attached and, as pointed out by Prof. Abul Barkat, with potential for diversion of 75 per cent of the aid money by an assortment of consultants, middlemen and rent seekers.

* Remittances to Bangladesh have maintained a hefty growth in recent years -from $2.07 billion in 2001 to $ 9.69 billion in fiscal 2008-09, an average growth of 17 per cent per annum. Remittances to Bangladesh during the last quarter of 2008 slackened momentarily due to global recession but picked up renewed momentum from the beginning of 2009 to reach a new height in 2012-13.

* The oil-rich Middle East countries account for over 60 per cent of the remittances. Of them, the Kingdom of Saudi Arabia alone accounts for nearly 30 per cent, followed by UAE with 19 per cent. In recent years, the US has emerged as the third highest source of remittance with 12 per cent of the total inflow.

Where do we go from here? Export of labour is not a dignified way of earning foreign exchange. Migration of skilled manpower, educated and trained at a huge cost of taxpayers' money, also deprives the country from the benefits of their services. However, the surplus manpower and pervasive unemployment and under-employment scenario leave little option but to continue to play the role of supplier of manpower to the world until we can reach the elusive goal of attaining the status of a middle income country. What is, however, important is rationalisation of the migration process to reap maximum benefits for the country and the migrants in the backdrop of higher current and future demand for manpower in the labour-importing countries.

It is important to realise that many former manpower-exporting countries have either turned into importing countries or slowed down the supply chains. In the meantime, active population in the developed world is shrinking while massive development and welfare-oriented programmes have created new jobs. It is no wonder that countries like Saudi Arabia and Malaysia which blocked entry of Bangladesh migrants have, of necessity, gone soft on recruiting manpower from Bangladesh.

Bangladesh would do well to seize on this opportunity to work towards securing better terms for supply of manpower and developing their skill level. The following areas would need special attention.

Skill development programmes: The skill development programmes currently being formulated by the Government in collaboration with ILO should take into account the projected short- and long-term demands in different skill categories in the host countries. The skill development programme may aim at promoting skills that do not involve heavy outlay of public money. Emphasis may be laid on developing skills through short-term crash programmes through private-public partnership.

Female migration: Past attempts to block or regulate female migration had backfired and degenerated into large trafficking. Stories of atrocities against female migrants are often exaggerated as a knee-jerk reaction to echo popular perception about vulnerability of women workers in foreign lands. Excepting a small percentage, most of the female migrants, as learnt from the Bureau of Manpower and Employment Training (BMET) sources, are reasonably comfortable with their jobs abroad and return to work for the former employers. Migration of women with adequate protection should be ensured with sufficient training on different aspects of housekeeping, their legal rights and remedies from oppressive employers and a reasonable proficiency in the language and customs and habits of the destination countries.

Capacity building of BMET: BMET is the focal point for migration. It needs to be strengthened not only in terms of manpower but also about other issues that seem to hinder its operation. These are monitoring of demand for Bangladeshi workers, including skilled and semi-skilled workers, maintaining the database on a scientific basis and organising skill development programmes to synchronise with overseas demands.

Competency and linguistic requirement: Given the global labour market pressures, specific policy decisions must be formulated in order to effectively prepare our workers to cope with emerging competency requirements. Qualification of workers must now include knowledge and appreciation of cultural values of the receiving countries aside from language proficiency.

Ladderisation: There is an opportunity to establish a system of ladderisation [ladderised education simply means starting with technical-vocational courses that are creditable for a college degree] for many Bangladeshi workers who are working abroad and developed skills and gained work experience. On returning to Bangladesh they can be tested, given upgrade training (if needed) and a higher level certificate before returning abroad. A similar model is currently practised in the Philippines. Many Bangladesh workers at home and abroad have acquired high skill on the job but do not have any formal certificates to show for their efforts.

Transparency in the migration process: The first step to foster transparency is the creation of a unified database at BMET listing all current employment opportunities and made accessible to all. This will allow exchange of information on migrant-related data and facilitate smooth communication between agencies and BMET. All recruiting agencies should be required to provide information on the concluded employment contracts along with full addresses of the employers for official clearance.

Stopping harassment of migrants: Part of the harassment of the migrants stems from the disorderly nature of the documentation and clearance process. The government may establish one-stop service facilities for migrants in different locations of the country to provide pre- and post-employment services, including documentation required for overseas employment. Such a setup exists in the Philippines.

Improving orientation and briefings: Current pre-employment orientation seminars and briefings are somewhat perfunctory. The contents of the pre-departure orientation seminars should be more comprehensive to provide information and counselling not only on the living and working environment but also migrants' legal rights and responsibilities, financial literacy, ways to avoid entrapment by unscrupulous recruiting agents and health issues. The financial literacy module of the pre-departure orientation should be completely revamped and include the recipient families. This module should ideally be organised in collaboration with banks and MTOs (money transfer offices).

Management of Wage Earners' Welfare Fund: It is alleged that some of the activities currently funded have only remote relevance with the welfare of the migrants. Effective management of the welfare fund is critical to ensure the protection of the welfare of the migrants. It should be used only in activities that are directly related to welfare of migrants.

Strengthening of remittance arrangement: Despite recent improvements, banking links in many countries remain inadequate, a problem which gets further compounded by first mile and last mile issues. Bangladesh Bank may encourage the commercial banks to establish, wherever possible, branches/ exchange houses in countries having concentration of Bangladeshi migrant


The state-owned commercial banks (SoCBs) which have an extensive network of branches in urban as well as rural areas do not normally extend their cooperation to private sector banks for handling their remittances destined for beneficiaries located in remote areas. BB's initiative is necessary to dismantle the barriers erected by the SoCBs.

Bangladesh Post Office has an extensive rural outreach and organisational strength but suffers from bureaucratic rigidities and reluctance to embrace new technology for money transfer. It may gear up and, like in many other countries, play an important role in remittance delivery through tie-ups with banks, both national and foreign, and international MTOs, investment in new information and communication technology.

Improving regulatory environment in remittance: The obsession with enforcement of exchange control and anti-money laundering initiatives and the ways they are currently being implemented have largely driven the innocent migrants to the informal channel. As recommended by the World Bank (2007), the country should ensure that oversight is commensurate with the risk of misuse to avoid unnecessary costs and inefficiency.

The overseas workers are celebrated as "modern-day heroes" in the Philippines but in Bangladesh, they are favourite targets of apathy and extortions; even the Welfare desks in the airports are of little assistance. Bangladesh has recently started honouring the migrants on the basis of the amount of their remittances. It is morally questionable, as the experience of Turkey and India suggests, some of these remittances may simply involve double tripping - black money and capital flight transmitted thorough the informal channel returning home honoured - as tax-exempt white money! It is unfair to the ordinary workers who remit most of their savings and yet remain unrecognised.

Improving access to information: Ignorance breeds corruption and drives many to do things they should not be doing. It is, therefore, critical to improve migrants' access to financial information. Migrants should have ready access in the form of a compact handbook that provides remittance procedure; the names of the banks, MTOs and financial institutions that handle remittances to Bangladesh; and mentions saving and investment opportunities in Bangladesh.

Investment opportunities: Lack of suitable opportunities serve as dampers to remittances; many wage earners, especially professionals, hold back money abroad for investment there. To attract investments from non-resident professionals, financial products should be attractive and competitive internationally. The commercial banks and financial institutions, especially the newly-established banks which are sponsored by NRBs (non-resident Bangladeshis), may be encouraged to develop new products targeting the migrants and the beneficiaries of their remittances.

source: The Financial Express
Rozina Akter
Assistant Professor
Department Of Business Administration

Offline mominur

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Re: Problems and prospects of labour migration from Bangladesh
« Reply #1 on: June 12, 2013, 02:42:42 PM »
Informative post............
Md. Mominur Rahman

Assistant Professor
Department of Textile Engineering
Faculty of Engineering
Daffodil International University

Offline Rozina Akter

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Re: Problems and prospects of labour migration from Bangladesh
« Reply #2 on: June 12, 2013, 04:33:59 PM »
Thank you........ :)

Rozina Akter
Dept. of Business Administration
Rozina Akter
Assistant Professor
Department Of Business Administration