Foreign Remittance in Our Economic Growth

Introduction

International migration of labor has become an integral part of the global economy. Starting in the 1970s, Bangladesh has emerged as a notable exporter of manpower. Bangladesh is among the top remittance receiving countries. The number of migrants leaving averaged around 250,000 Currently around 5.5 million Bangladeshi workers are employed Migrant workers are mostly working in the oil-rich Middle Eastern countries.

Introduction

In Bangladesh, the recruitment of migrant workers was initiated by private individuals on an informal basis. Decade later government got involved in the recruitment regulatory process. The majority of the Bangladeshi workers is unskilled and originates from rural areas and poor community. Remittance is the key source of foreign exchange earnings after garments exports. In 2011 the remittance hits a decades high of 12.7 billions.

Macro effects of remittance

Foreign exchange is contributing to our GDP growth. Foreign remittance is also exceeding various types of foreign exchange inflows It is extremely hard to measure the informal remittance flow. Formal remittance is growing at an average of 10% since 2000. Remittance is playing a critical roles in providing foreign currencies and financing the countries trade deficit. The effects could be directly on the remittance receiving family as well as indirectly through induced effects on the local region.

Macro effects of remittance

Remittance is generating foreign exchange reserve for Bangladesh. Growth is remittance is one of the key factors in maintaining economic stability. Remittance provide resources for investment without reducing current consumption. Remittance playing an important role in poverty alleviation. The effects could be directly on the remittance receiving family as well as indirectly through induced effects on the local region.

Micro effects of remittance

Remittance receiving experience a rise in disposable income. Saudi Arabia accounts for approximately 43% of migrants out of Bangladesh. The poorer the household the more impact remittance can have on alleviating poverty. Nutrition- Allow families of migrants to meet basic nutritional needs.

Living condition- Improved living conditions.

Education- Invest for education of children

Micro effects of remittance

Health care- Increased investment for healthcare Social security- Social security for elderly people increased Investment- Increased investment in business or income generating activities Higher portion of remittance is used for consumption. The living standard of the poor migrant family definitely increases. Only a small portion of remittance by the wage earners is utilized for productive investments.

Recommendation

Skilled manpower export- Exporting skilled and professional manpower would not only lead to sustainable growth in foreign exchange Develop new foreign policy- The government should develop new foreign policy to explore the potentials of manpower export Facilitate formal banking channels- Government needs to encourage people in receiving remittances through the formal channel Utilization of Remittance in productive investment- It is an important issue for Bangladesh.

Conclusion

Migration process is one of the most important source of foreign exchange. The countrys reputation has to be built up patiently as an efficient exporter of labor.

Migration needs to be integrated into development policy and planning

We have to continue with the growth and overcome all the future challenges for the socio-economic development of the country