Remittance flow to Bangladesh continues to slide, dropping 5.3 percent in January on the back of declining numbers of migrant workers.
The country received $1.25 billion in remittance last month against $1.32 billion in January 2013, according to Bangladesh Bank data released yesterday.
The drop is in keeping with the trend since last August, when it turned negative after slow growth since the first half of fiscal 2012-13. Only 4.5 lakh migrants managed oversees jobs in 2013, down by more than 33 percent from 2012, according to the Refugee and Migratory Movements Research Unit (RMMRU).
Moreover, the decline is accompanied by a large number of returning migrants.
The organisation accounted the fall to the government's failure in stimulating labour markets in Saudi Arabia, the United Arab Emirates and Kuwait through diplomatic channels into accepting Bangladeshi migrants.
Zahid Hussain, lead economist of the World Bank in Dhaka, said workers residing in countries such as Saudi Arabia, the UAE and Malaysia, whose visas have expired, are failing to send money home, which has affected the remittance flow.
Besides, the flow of the portion of remittances sent for investment purposes might have fallen due to currency appreciation, as the value of taka rose 6 percent against the US dollar over the last one year.
In its monetary policy statement last week, the central bank projected an overall negative growth of 4 percent in remittance for the current fiscal year.
While the projected decline in remittance would not adversely affect the external sector stability in fiscal 2013-14, returning to a positive growth path would be a key factor next fiscal year, it said. “Starting from fiscal 2014-15 it will be important for remittance growth to pick up to retain external sector stability, as imports are likely to grow further following a year of import compression."
The central bank called for a coordinated effort to boost manpower export, upgrade skills of migrants and enhanced incentives to use formal channels to remit and invest funds.
Meanwhile, a number of analysts said Bangladesh should avail the opportunities offered by a number of Middle Eastern countries to have the illegal workers legalised, which will not only give the remittance flow a much-needed boost but will again open the doors to the countries for Bangladeshi workers.
They also called for efforts aimed at opening new markets and grabbing opportunities buoyed by the reviving global economy.