Bangladesh is located in South Asia. It is the seventh most populous country in the world and is mostly densely inhabited. The poverty level, however, has fallen by more than 20%, helped by its prominent agricultural sector. The Bangladeshi economy is helped by its big garment sector, which contributes more than two-thirds of the country’s trade. The major challenge to prosperous growth is the vulnerability of the land to cyclones and floods. However, even with such challenges, Bangladesh has experienced a growth rate of 5% since 1990. This growth has been helped by remittances from expatriates as well.
Since 1975, there has been a two-fold increase in the per-capita GDP. During the 2008 global economic recession, Bangladesh managed to stay flexible. According to the Bangladesh Bureau of Statistics (BBS), there was an increment of $62 in the per capita GDP in FY2009 from US$559 at the end of FY2008. Fiscal 2009 registered per capita income of US$621. About 25% of the country’s GDP in 2009 came from remittances of expatriates, totaling $9.7 billion and garment exports worth $12.3 billion. The increasing foreign direct investment highlights the growth rate of the Bangladesh economy and remittances from overseas Bangladeshis, totaling $11 billion in FY10, accounted for almost 12% of GDP.
Scenario of migrant workers in Bangladesh is given below throw a chart.
Economic Contribution of Migrant workers in Bangladesh
Remittance is the life line of Bangladesh economy. Some 4.5m nonresident Bangladeshis are working abroad, and sending home hard earned foreign currencies. It is believed that the actual number of Bangladeshi migrants, both legal and illegal, would be close to 7.5 million. In the first 10 months of FY 2006-07, number of manpower export stood at 0.42m, showing 83.14% rise, compared to 0.25m in FY2004-05. In FY2005-06, the number stood at 0.29m, current year to year growth is around 16%. In addition to achieving higher export earnings, the country witnessed a 44 percent growth in remittance earnings during the first quarter of 2008-09 fiscal year compared to the same period of the previous fiscal year. The other records of remittance earnings in a single month are $820.71 million in July and $808.72 million in March of year 2008. A total of 9,81,102 Bangladeshi people went abroad in 2007-08 fiscal year which is about 74 percent above the previous fiscal year figure. According to the statistics, on monthly average basis more than 81,000 Bangladeshis went abroad in 2007-08 fiscal year. The figure was 46,000 in the previous fiscal year. Non-resident Bangladeshis (NRBs) sent $2.345 billion to Bangladesh between July and September of 2008, according to the Bangladesh Bank statistics. Meanwhile, private bank officials said the global economic slowdown, mainly in the US and European countries, is yet to impact the remittance inflow. They, however, apprehend that if the crisis continues it may have a negative impact on the inflow.
The remittance market of Bangladesh has been showing a steady growth in terms of incoming remittance volume. Considering the current macro-economic indicators, it seems that this growth run will continue in the coming years. Central Bank predicts that our annual incoming foreign remittance will touch $10 billion in the next 3 years. The reasons for such robust growth can be summarized as: • Stable macro-economic indicators including GDP growth, • Steady growth in manpower export specially in the middle east • Substantial devaluation of the local currency
• Rapid urbanization
• Development of new remittance corridors in Australia and part of Europe and Africa • Increased focus of Central Bank and the Government to channel funds through formal channels • Increased competition among financial institution to grab market share • Aggressive marketing policy adopted by Banks to increase their share of wallet • Expansion of...