Do you know? Developing country like Bangladesh earn one third of there revenue from foreign remittance. It tells that a huge number of revenue (GNP) came from foreign remittance. Its help us to imagine that the importance of foreign remittance in Bangladesh.
But recently Bangladesh is facing the decreasing revenue from foreign sector. Bangladesh Bank (BB) data shows that country`s inward foreign remittance dropped sharply in the last couple of months.
Do you know? Developing country like Bangladesh earn one third of there revenue from foreign remittance. It tells that a huge number of revenue (GNP) came from foreign remittance. Its help us to imagine that the importance of foreign remittance in Bangladesh.
The standard refrain appears to be that the flow of remittance has declined because the stock of Bangladeshi migrants abroad is not growing like it used to. This is because of two reasons. First, Bangladesh is failing to send more workers abroad to traditional markets and exploring new market. Second, the number of migrant workers returning to Bangladesh has also increased because the government could not resolve problems related to the legal status of Bangladeshi migrant labors in Saudi Arabia, United Arab Emirat and Kuwait through diplomatic channels. Unfortunately, there is no reliable time series on the annual number of migrant returning.
Average earnings may have declined because of increased unemployment and/or decreased wages of illegal migrants in GCC countries in particular as the authorities tightened enforcement of regulation against illegal migrants.
American election can be a matter of thinking for upcoming fall of remittance. It can be occur a huge impact on Bangladesh economy.
Few days ago UK took a step to separate from great Britain. It changed the economic condition of UK. That’s occur the UK pound converted into taka is declining. They also taking step to removing illegal migrant those huge number of are Bangladeshi.
The propensity to remit may also have declined because of the appreciation of taka against UK pound in 2016 and increase in transaction costs due to incessant political turmoil. Taka appreciation has stronger effects on remittances motivated by the desire to invest. By reducing the taka paid per unit of pound, appreciation raises the taka prices of the assets the migrant workers wish to buy in Bangladesh, thus reducing the asset demand and hence the amount that would have been remitted to buy those assets. Political turmoil affects remittance transaction costs as well as the ability to remit by disrupting the smooth functioning of the banking system.
Helping unemployed migrant workers abroad find decent jobs, improving the skill composition of new migrants, ensuring the competitiveness of the exchange rate, and ring fencing remittance transactions from the impact of political turmoil will help stem the decline in remittances which experiencing in Bangladesh.
Courtesy By: Muminul Haque Chowdhury
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