Abstract

International migration is considered to be an important livelihood strategy for the people of

Bangladesh. This paper investigates natures and trends of migration and remittance flows of
Bangladesh from 2000-2013. This paper examines the various issues of international migration
remittance flow of Bangladesh on the basis of both secondary data. Secondary data were
collected from the report of Bangladesh Bureau of Statistics (BBS), Bureau of Manpower
Employment and Training (BMET) and from the Ministry of Manpower Export. It is found
that from 2001-2008 both the migration and remittance flows show an increasing trend but after
this period it is showed a decreasing trend. The research paper has identified various reasons
behind this. Most of the labor, who is largely unskilled, is working in the Middle East countries.
Major share of total remittances come from the Middle East countries. But individually the
position of the USA is just behind Saudi Arabia over the last few years. Finally it could be
concluded that proper attention should be given on overseas migration in order to keep the
unemployment rate within tolerable level and to increase the amount of remittances which is an
important source of foreign exchange.

1. Introduction
A remittance is a transfer of money by a foreign worker to an individual in his or her home
country. In other words, remittance refers to the income of border, seasonal, and other short-term
workers who are employed in an economy where they are not resident and of residents employed
by nonresident entities. According to World Development Indicators (WDI), remittance has three
main components: wages and salaries in cash, wages and salaries in kind, and employers social
contributions. About $404 billion went to developing countries (a new record) with overall
global remittances totaling $542 billion (WB, 2013).
Migration has become an important livelihood strategy for the people of Bangladesh. It has
remarkable positive impact on social development and empowerment through skill transfer and
by fostering many community development initiatives. Bangladesh like other South-Asian
countries is in a situation of surplus manpower with a combination of professional, skilled, semiskilled and less-skilled labor force (BBS, 2013).
Bangladesh is considered as a resourceful country of a huge labor-force. About 60 million people
constitute this vast reservoir of active manpower (BBS 2005) ; Bangladesh is steadily turning her
manpower into an asset through training and skill development with a view to meeting the needs
of overseas employment. It is not possible for Bangladesh to absorb the full range of available
less-skilled, semiskilled, skilled and professional manpower within the country in an appropriate
manner and hence it is needed to find employment opportunities abroad. There are also a number
of foreign countries who are in need of importing manpower from other countries. Overseas
employment from Bangladesh started officially in 1976 with a modest number (6,078) of
workers (BMET, 2003).
Migration plays a vital role in the national economy mainly in two major ways; firstly it reduces
unemployment and secondly migration results in remittance flows for the country. The migration
has shown steady growth over the year that is favorable to the development of Bangladesh; as
inflow of remittance has increased every year (ADB, 2010).

1.1 Background of the Study

Remittance sector is the largest sector in Bangladesh which is earning more GDP. Bangladesh
has once again taken a spot among top ten remittance-earning countries on the back of an
upgrade in the legal status of migrant workers in Gulf countries, according to a World Bank
report. The country is expected to receive $15.05 billion in 2014, enough to retain the eighth
position it held last year, says the World Bank's Migration and Remittance Unit.
Bangladesh has a long history of migration and overseas remittances. It is reported that as far
back as in 1942 Bangladeshi nationals had migrated to the port cities of London and Liverpool in
the UK (Mahmood 1991). The British had a scheme of issuance of employment voucher to
overseas workers seeking work abroad. The scheme, during the British regime, opened up a great
opportunity for Bangladeshi workers to migrate to United Kingdom (UK). It is believed that
thousands of Bangladeshis, especially from Sylhet, took the opportunity and created a flow of
migration towards UK. For certain reasons, however, this flow had weakened by the 1960s and
the direction of the migration flow changed in the 1970s. After the birth of Bangladesh, most
Bangladeshi migrants sought to look for job opportunities in the Middle East countries as well as
selected EU destinations (mainly Germany).

1.2 Objectives of the Study

The broad objective of the study is to estimate the remittance of manpower export as one of the
growth drivers of Bangladeshs economy. The specific objectives of the study are as follows:
(i) To estimate trend of the flow of migration from Bangladesh.
(ii) To find out the utilization patterns of remittances inflow of Bangladesh.
(iii)To determine the impact of migration and remittance to the economy of Bangladesh.
(iv)To conclude the policy options based on the results of the study.

2. Literature Review
Remittance has been playing a very significant role to the sustainable economic development of
a developing country like Bangladesh. The government has used remittance to pay the different
government and non-government import bills and the installments of different foreign debt and
donation. Salim (1992) has conducted a research on remittance which is used to make import
payments and also used for productive investment by the government. Ali (1981) has identified
overseas remittances achieving a favorable balance of payments and as well as creating a new
resources base for the country. In Bangladesh, a significant portion of overseas earnings is spent
for consumption purposes, acquisition of assets, investment in trade and business and to finance
import of capital goods. It will positively affect the socio economic condition of migrant
families. Some of the early studies (Salim, 1992 and Matin, 1994) have focused on the
macroeconomic impact of overseas remittances in Bangladesh. However, remittances are not
devoid of adverse effects. Manpower exports are alleged to deprive the country of their services
and upsetting the normal functioning of the economy (Mahmood, 1985)
A study of World Bank (2008) has highligted that migrant remittances impact positively on the
balance of payments in many developing countries. Barua et al (2007) has found the
macroeconomic determinants of remittance in Bangladesh by using a balanced panel dataset of
bilateral remittance flows from 10 major countries (of Bangladeshi migrants) to Bangladesh
during 1993-2005. Hasan and Monirul (2008) have examined the macroeconomic determinants
of remittances in Bangladesh. He found that if the domestic interest rate goes up by 1 percent, on
average, remittance will increase by 1.94 percent and if GDP of the five host countries increases
by 1 percent, remittance will increase by 3.06 percent.
Rahman (2003) has found the determinants of remittance of Saudi Arabia. He found that there is
a significant positive relationship between the level of per capita GDP and remittance per worker
from the kingdom. Barua et. al., (2007) have tried to find out the relationship of remittances with
socioeconomic development in Bangladesh. In 1998-1999, 22 percent of the official import bill
was financed by remittances (Afsar, 2000; Murshed, 2000 and Khan, 2003). The steady flow of
remittances has resolved the foreign exchange constraints, improved the balance of payments,
and helped increase the supply of national savings (Quibria, 1986).

3. Trends in Migration Flows from Bangladesh

Overseas employment and remittances play an important role in the economic development of
Bangladesh. A sizeable number of Bangladeshi labor forces are employed in different parts of the
world including the Middle East. With a few exceptions, manpower export has been increasing
every year. In 2007-2008, around 9.81 lakhs Bangladeshi are employed in abroad as a migrant
labor where it was only 1.95 lakhs in 2001-2002 (Table 13). However, after the 2007-2008, the
flow of labor migration has been following a declining trend and it is 4.41 lakhs during the 20122013. It is observed that highest amount of labor are migrated in 2007-2008. After 2007-2008,
there is negative and slow growth of labor migration. The probable reasons for this are multiple.
One of the reason is the stiff competition from new labor exporting countries like Nepal,
Vietnam and Cambodia which have recently entered the international labor market and supply
cheaper labor. Another reason is the rise in unemployment in some Middle East countries due to
global economic recession and collapse of the construction sector in the Middle East.

Table 1: Number of Bangladeshi labor

Fiscal Year
2001-2002

No of employment abroad
195
(000)

Percentage Change (%)

-8.45

2002-2003

251

28.72

2003-2004

277

6.37

2004-2005

250

-6.13

2005-2006

291

16.4

2006-2007

564

93

2007-2008

981

73.93

2008-2009

650

-33.74

2009-2010

427

-34.30

2010-2011

439

2.81

2011-2012

691

57.40

2012-2013
441
-36.18
Source: Bangladesh Economic Review 2012 and Bangladesh Bank.

The highest numbers of Bangladeshi workers are migrated to the ten countries such as Saudi
Arabia, UAE, Qatar, Oman, Bahrain, Kuwait, Libya, Iraq, Singapore and Malaysia. In case of
labor migration Bangladesh is highly dependent on the Middle East countries. Analyzing the data
from 2001 to 2012 it reveals that 70% of total export was in different countries of Middle East.
The political unrest in these Middle Eastern countries however might create an adverse effect on
migration as well as flow of remittance into the country. Besides, new employment opportunities
have also been created for Bangladeshi workers in Bahrain, Qatar, Jordan, Lebanon, South
Korea, Brunei, Mauritius, United Kingdom, Ireland, Italy, Australia,

Iraq,

Sweden,

South

Africa, Algeria, Angola (BER2012). But it is no more significant compare to the Middle East
countries. So, Government of Bangladesh is trying to explore and expand new labor market in
Europe and Africa.

Table 2: No of Labor Bangladeshi by Country

Year

Saudi

Kuwait UAE

Bahrain Oman Malaysia Singapore Others Total

Arab
2001

137248

5341

16252

4371

4561

4921

9615

6656

188965

2002

163254

15767

25438

5370

3927

85

6870

4545

225256

2003

162131

26772

37346

7482

4029

28

5304

11148 254190

2004

139031

41108

47012

9194

4435

224

6948

25006 272958

2005

80425

42029

61978

10716

4827

2911

9651

37903 266440

2006

109513

35775 130204

16355

8082

20469

20139

44032 381516

2007

204112

4212

226392

16433 17478

273201

38324

52457 832609

2008

132124

319

419335

13182 52896

131762

56581

68836 875055

2009

14666

10

258348

28462 41704

12402

39581

80141 475278

2010

7069

48

203308

21842 42642

919

39053

75840 390702

2011

15030

29

282734

13928 135260

742

48666

71673 568062

2012

21232

215452

21777 180326

804

58657

109548 607798

Source: Bangladesh Economic Review, 2012.

Analyzing the statistics of the BMET, it is observed that about half of the overseas
workers who went abroad are less skilled. Less skilled labors have the highest share of
the total labor migration than those of skilled and semi-skilled and professional labor.
In year 2011, the total labor migration was 568062 whereas the less-skilled, skilled
and professional labor migration increased by 7.6, 152.9 and 208.0 percent
respectively than that of the previous year of 2010. On the other hand, in year 2012
the total labor migration is 607792 whereas the less-skilled labor migration is
increased by 22.4 percent but semi-skilled, skilled and professional labor migration is
decreased than that of the previous year 2011. It is also observed that the share of
professional workers has decreased significantly. However, the rate of migration of
the skilled and semi-skilled workers is at the satisfactory in 2012 (table 15)
Table 3: Number of labor Classified by Skill
Year

Professional

Skilled

Semi-skilled Less skilled

2001

6940

42742

30702

109581

188965

2002

14450

56265

36025

118516

225256

2003

15862

74530

29236

136562

254190

2004

19107

81887

24566

147398

272958

2005

1945

116393

24546

112556

255440

2006

925

115468

33965

231158

381516

2007

676

165338

183673

482922

832609

2008

1864

281450

132825

458916

875055

2009

1426

134265

74604

255070

475278

2010

387

90621

12469

287225

390702

2011

1192

229149

28729

308992

568062

2012

812

209368

20498

377120

607798

Source: Bureau of Manpower, Employment and Training, 2012

Total

Female migration from Bangladesh is an uncommon phenomenon. During the period of 19911995, only 9308 female migrated from Bangladesh which constituted only 0.98 per cent of the
total migrants. The percentage of female migrants dropped to 0.42 per cent during the period of
1996-2000 (Siddiqui, 2005). However, Table 16 shows the trend in female migration from
Bangladesh during the period of 2001-2013 which depicts that Bangladeshi migrant workers are
predominantly men. Female migrants constitute only 66076, among a total of 2408196
migrants from 2001-2007, which is less than 3 per cent of the total migrants of Bangladesh.
But in 2013 female migrants were 31259, among a total of 1238092 migrants. Presently womens
employment opportunity in the overseas labor market is mostly confined to some specific
occupation like housekeeping trade, cleaner and garment workers. These workers usually come
from the village and sub-urban areas with poor economic background. There exists a good
demand of women workers in some other trades like nursing, care giving, cashiering, catering,
electronics factory, etc.

Table 4: Trends in female migration from 1991-2013

Women migrants
Year

Number of migrants

Number

% of total migrants

2001

188965

659

0.35

2002

225256

1217

0.54

2003

254190

2400

0.94

2004

272958

11200

4.10

2005

252702

13600

5.38

2006

381516

18100

4.74

2007

832609

18900

2.27

2008

886590

20268

1.12

2009

963685

27654

6.23

2010

1057867

29365

3.26

2011

1238092

31259

3.92

2012

1695873

33256

4.01

37548

5.22

2013
1736598
Source: Bangladesh Economic Review, 2013

4. Trend in Remittance Flows to Bangladesh

Like overseas employment, over the years, the flow of remittance in Bangladesh is increasing in
volume, but there is a slower growth of remittance since 2007-2008. This is due to rise in
unemployment in some Middle East due to global economic recession and collapse of the
construction sector in the Middle East. Another reason is political unrest in these Middle East
countries however might create an adverse effect on migration as well as flow of remittance into
the country. Remittance sent by overseas workers has increased from $ 2505.44 million in 20012002 to $14461.15 million in 2012-2013 (Bangladesh Bank, 2013). Remittance during 20122013 is $12843.43 million which is more than 12.60 percent that of the last year (Table 17). One
of the reasons of this growth is that Bangladesh Bank has simplified the drawing arrangements
between foreign exchange house and domestic banks. On the other hand, Bangladesh Bank has
given permission to 39 banks for establishing more than 1000 drawing arrangements with 262
exchange houses all over the world for collecting remittance (Bangladesh Bank, 2012).

Table 5: Recent Flow of Remittance to Bangladesh

Fiscal Year
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013

Million US$
2501.44
3060.31
3372.49
3848.30
4801.88
5978.47
7914.78
9689.16
10987.40
11650.32
12843.43
4461.15

Percentage change
32.81
(%)
22.25
10.20
14.11
24.78
24.50
32.39
22.42
14.40
6.0
10.24
12.60

Source: Bureau of Manpower, Employment & Training and Bangladesh Bank.

In table 6 shows that despite significant decline the share of remittance, the high amount of
remittance is still coming from Saudi Arabia. In 2001, about 45.90 percent of the total remittance
was received from Saudi Arabia which declined to 28.69 percent in 2011-2012. On the other
hand, the share of remittance of UAE in 2011-2012 is 18.72 percent which was 9.3 percent in
2001-2002. Most of the countries of the Middle East regions are seen downward trends of the
remittance in the recent past. This is because of global economic recession and political unrest of
Middle East in the recent year. Another reason is Government of different Middle East countries
stop manpower import from Bangladesh due to unfair practice and dishonesty of recruiting
agency. It is also observed that the remittance from the non Middle East countries like USA, UK,
Malaysia, Singapore etc, grew significantly in the last couple of year.
Table 6: Country Wise Remittances
Year
20012002
20022003
20032004
20042005
20052006
20062007
20072008
20082009
20092010
20102011
20112012

Saudi
Arab

UAE

Qatar Oman Bahrain Kuwait USA

UK Malaysia Sing other Total

apore

1147.95 233.49 90.60 103.2

54.12

285.7 356.2 103.3

46.85

14.26 65.29 2501.1

1254.31 327.40 113.55 114.1

63.72

338.5

458 220.2

41.40

31.06 99.61 3061.9

1386.03 373.46 113.94 118.5

61.11

361.2 467.8 297.5

37.06

32.37 123.1 3372.2

1510.45 442.24 136.41 131.3

67.18

406.8 557.3 375.7

25.51 47.69 147.6 3848.2

1696.96 561.44 175.64 165.2

67.33

494.3 760.6 555.7

20.81

684.8 238.8 4801.8

1734.70 804.84 233.17 196.4

79.96

680.7 930.3 886.9

11.84

80.24 339.3 5978.4

2324.23 1135

138.20 863.7 138

289.79 220.6

896.1

92.44 130.1 444.3 7914.7

2859.09 1754 343.36 290

157.45 970.7 1575 789.6

282.20 165.1 501.3 9689.1

3427.10 1890

1019 170.1

193.46 587.0 349 360.9

827.51 1451 453.8

1098

3290.03 2002 319.35 334.3

185.92 1075 1848 889.6

703.73 202.3 789.1

1165

3684.37 2404 335.25 400.9

298.48 1190 1498 987.4

847.49 311.4 884.6

12843

Source: Bangladesh bank, 2012

5. Macroeconomic Benefits of Remittance

Remittances in Bangladesh arise as a poverty alleviating policy tool. It
contributes directly in broadening the opportunities to increase incomes. It allows
households to increase their consumption of local goods and services. At the
community level, remittances generate multiplier effects in the local economy,
creating jobs and spurring new economic and social infrastructure and services.
At the national level, remittances provide foreign currency and contribute
significantly to GDP.
Remittance has surpassed official aid transfers to developing countries,
reduces international inequality and promotes poverty reduction. Measuring the
impact of remittances is complex. But a growing body of evidence from poverty
simulation model, cross-country regressions and analysis of household survey
shows that remittances, in facts do reduce poverty-although the evidence of
their effect on inequality is mixed (World Bank 2006).

6. Microeconomic Benefit at Household Level

Using HCI (Head Count Index), a study estimates that 21 percent of the
migrant households were moderately poor prior to overseas migration by the
respondents. The study founded that remittances promote development through
increased material and human capital investment. The study shows that from
zero level of savings, respondents now save a quarter of their overseas income
beside remittances. Apart from that their investment on health and education of
family members, the two major indicators of human capital has increased
significantly compared to pre-migration level. Generally remittance is used in the
various expenditure such as repaying loans for migration, buying land and
constructing house, investing in business, increase in income and savings,
community development, improve living standard, social ceremonies.

7. Impact of Migration and Remittance to the Economy of Bangladesh

Remittance

has

considerable

contribution

to

ease

foreign

exchange

constraint, stabilizing the exchange rate and allowing Bangladesh to import much
needed

raw

materials,

intermediate

goods

and

capital

equipment.

Comfortable reserves of foreign exchange have also contributed to overall macro

stability and have reduced aid dependency. Remittance increases with the
expanding migration process and accelerating movement of people for overseas
employment market.
Remittances from migrants have positive impacts on poverty reduction
and development in Bangladesh substantially contributing to the achievement
of the Millennium

Development

Goals. These

positive

impacts become

greater when remittances can be saved and invested in infrastructures and

productive capacity. Government policy measures induce such use. Significant
barriers to migration and remittance transfers need to be addressed in order to
harness opportunities for development and poverty reduction, including
through easing financial transfers, setting appropriate incentives, improving
policy coherence in migration and remittance polices, and facilitating the
temporary movement of people.
The remittance and economic development in Bangladesh can be broadly
explained in two ways; overall macroeconomic benefits of remittance and
microeconomic benefits at household level. The migration of workers in
search of economic opportunity has enormous implications for development. It
has significant positive impacts on household well-being and economic growth
through improved income and increased integration in the global economy
(World Bank 2006). Studies on Impact of International Labor Migration and
Remittances

on

Poverty

in Bangladesh found that migration households

experienced enormous expansion of their income base during the post migration
period.

8. Recommendation and Conclusion

8.1 Recommendation
Bangladeshs growth in overseas employment sector for the current fiscal year
has been clearly affected by the global economic meltdown. To protect
Bangladeshi workers abroad from being retrenched by their employers in the
backdrop of global recession, the present government has taken several steps.
Now, there needs to be a detailed work plan on how the initiatives will be
implemented. As for initiatives to aid migrant workers, more can be done in this
area.
Government must seek to improve bilateral agreements and negotiations
with countries which are the main destinations for Bangladeshi migrant
workers.
A separate exchange rate for remittances may be considered
Records of returning migrant workers should be kept in order to retrain
them for the demands of local industry.
Bangladeshi labor force has potential demand in Eastern Europe, South
Africa and North African countries. Apart from the Middle Eastern labor
market, it is important to have firm footing in these potential markets.
Export of professionals and skilled workers from Bangladesh is much less
than many other manpower exporting countries.
To sustain foreign labor markets, steps taken by the government (like,
formation of skill development fund) to develop skilled labor force should
be implemented as planned.
In tandem with this, National Skill Development Council needs to be made
more effective.
The government must ensure that its initiatives to aid migrant workers are
implemented in a timely and proper manner.

8.2 Conclusion

Remittance has been playing a major role in increasing socio-economic development, promoting
employment of Bangladesh over the last few decades. Remittance also acts as an element in the
pillar of success of Bangladesh in fighting the global economic crisis. It has improved living
standards of workers families and helped in improving the income distribution in favor of
poorer households. Workers remittances are remarkable tool for poverty alleviation. As
Bangladesh is a hugely labor surplus country and as it is not possible for the successive
Bangladeshi Government to create employment opportunities for all of its manpower,
international migration would the best possible option for these Bangladeshi migrant. On
the other hand, remittance is now constitute the single largest source of foreign exchange
earnings and play a crucial role in alleviating the foreign exchange constraints of Bangladesh.
The present study attempts to capture international remittance inflow to Bangladesh on the basis
of primary and secondary data. The present study have explored low growth of workers
remittance is the causes of weakness of the performance of the labor market. The findings of the
study indicated that deficiencies of skill and inadequacies of educational attainment are factors
behind the low growth of remittance. In 2007-2008 highest amount of labor are migrated but
after 2007-2008 there is a negative and slower growth of labor migration. It is also observed that
in case of labor migration, Bangladesh is highly dependent on Middle East countries. Although,
manpower export to Saudi Arabia which was the largest labor market for Bangladesh is
decreasing because of world financial crisis. Another reason is Government of Saudi Arabia stop
manpower import from Bangladesh due to unfair practices and dishonesty of recruiting agencies.
This paper also identifies that Bangladesh export mainly unskilled and semiskilled employees.
The rate of migration of the skilled workers is also at the satisfactory level. This is due to
Government has taken few initiatives to increase skilled manpower exports such as establishment
of institute of marine technology and technical training center for training of potential migrants.
Poverty reduction has become an immediate agenda of the government of
Bangladesh in which the important vehicles for reduction of poverty is migrant workers
remittances. Government should take initiatives to increase professional manpower exports and
reduce the influence of recruiting agencies.

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