Academic journal article Journal of Business Strategies

Workers' Migration and Remittances in Bangladesh

Academic journal article Journal of Business Strategies

Workers' Migration and Remittances in Bangladesh

Article excerpt

Abstract

Bangladesh has sent more than 6.7 million workers to over 140 countries during a period of more than three decades since the mid-1970s. Most of these workers temporarily migrated to work in Middle East and Southeast Asia. This mass movement of temporary migrant workers has, to some extent, eased unemployment pressures on the over-burdened labor market in this highly populated country. More importantly, the remittance transfers received from these migrant workers have reached a phenomenal level of over 10 billion US dollars in 2009, approximately 12 percent of GDP in Bangladesh. This paper analyzes the trends and various other aspects of workers' migration and remittances in Bangladesh. It further discusses the micro and macroeconomic impacts of remittances. While most remittance transfers have been used by migrant-sending households for consumption, there is evidence to show that these transfers have helped reduce poverty in Bangladesh. The analysis presented in this paper further indicates that these remittances may have significant effects on other macroeconomic variables as well.

Introduction

A labor-abundant country, Bangladesh has sent over an estimated 6.7 million migrant workers to more that 140 countries across the globe over a period of more than three decades since the mid-1970s. (1) The countries of Middle East and Northern Africa have been the major destinations for these migrant workers. In the recent past, there have been large flows of Bangladeshi migrant workers to Southeast Asia--particularly to Malaysia and Singapore--as well. The natural resource based economic prosperity of the first group of destination countries since the 1970s has created a large demand mainly for unskilled and semi-skilled workers to work in different sectors of those economies. Similarly, the economic boom of the Southeast Asian countries in the late 1980s and the 1990s generated demand for unskilled and semi-skilled workers. Bangladesh with a large population and limited economic opportunities has decidedly taken advantage of economic growth and prosperity in those countries.

These flows of migrants leaving the country have not only fulfilled the mandate of the government policy to encourage out-migration as a means of easing unemployment pressure on Bangladesh' ever exploding labor market, but also the remittances received from the migrant workers have had significant impact on the economy. With more than 10 billion U.S. dollars (USD) in remittances during 2009 alone, Bangladesh has been among the major remittance-receiving countries in the world and it has maintained this status for last several years. (2) This amount is about 12 percent of GDP and more than half of total export earnings. It may be noted that if the money remitted through informal channels are taken into account, the magnitude will be much larger. (3) Furthermore, not surprisingly, the countries of Middle East have been the major sources of these remittance transfers. As noted by an official associated with labor migration, "remittances have been causing a silent economic revolution in Bangladesh." (4) However, the broader impacts of remittances in the economy have not been fully assessed. There have been only a few studies that use micro-level survey data to examine the economic effects of remittances in Bangladesh. To the best of our knowledge, there is hardly any work that systematically investigate the overall macroeconomic impact of remittances in Bangladesh. (5) However, studies for other countries have shown that these remittance flows could have significant macroeconomic consequences. (6)

This paper is intended to examine the dual phenomena of workers' migration and remittances in Bangladesh. Over the years, under the government patronage, the international migration of workers has taken some pressure off from the domestic labor market and has purportedly enhanced the economic well-being of the families left behind by the migrants. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.