A falling trend in remitting money by expatriate Bangladeshis through the informal channels, coupled with a sense of insecurity among them in putting their savings in the recession-hit western countries have recently pushed remittance inflow through the formal channels.

Such rise in remittance is despite the fact that there had been a slide in Bangladesh's manpower exports in recent months due to various factors. Moreover, devaluation of dollar is also has some effect, though nominal, on the remittance volume. Observers on manpower export here have admitted that the massive shift of the non-resident Bangladeshis (NRBs) to the formal channel was a major reason for the recent remittance boom in the country. After the start of the global economic meltdown, manpower exports from Bangladesh experienced a huge setback.

During January-October 2008 period, manpower export figure was as high as 875,000. But in the corresponding period this year, the number of people who went abroad for employment fell down substantially to 3,82,000. On the other hand, during the January-October, 2008 period about 37,000 people returned home. During the same period this year, the number nearly doubled to 65,000 people.

Remittance growth stood at 21.23 per cent in the first four months of the current fiscal year. On remittance side, the amount of money Bangladesh received in the first four months of current fiscal (July to October'09) rose to $3.61 billion, compared to $2.98 billion received during the same period last year. Bangladesh received $911.20 million in remittance in the month of October this year against $887.92 million a month ago(September), according to central bank data. Remittance crossed the $900 million mark for the third time in 2009. The figure was $935.15 million in August and $919.10 million in June.

Commenting on the issue, CPD executive director Dr Mustafizur Rahman said that though the manpower export decreased, the return of the manpower is smaller than the present stock which got a big boost through the massive export in 2007 and 2008. Secondly, the formal remittance channels had improved in terms of speed and cost, Dr Mustafiz said, adding that this prompted the NRBs to prefer formal channels to send their money back home. "Five years back the volume of remittance through formal and informal channels was equal but now the share of the informal channel is overtaken by the formal channel," he explained.

The CPD executive also recalled that the global recession in the West triggered insecurity among the NRBs about their savings in the financial systems of the West prompting many of them to send their savings to home. This also gave added boost to recent remittance inflow. Dr Mustafiz said that the around 60 per cent of the NRBs are living in Middle Eastern countries, most of whom have not been affected as such by the global recession. He said that the devaluation of the US dollar against other currencies also contributed to the surge in remittance, but it was nominal as the devaluation rate was not that much high.

President Golam Mostafa of BAIRA, the platform of the manpower exporters, admitted that the NRBs were shifting towards the formal channel to remit money in the last couple of years. "Previously if a NRB sent money through the banking channel it took at least a week. But through the informal channel he could send the money within 12 hours only," he said, adding that the formal channel had improved their efficiency to such an extent that an NRB now can send money to his relative back home within one hour through the banking channel.

Due to large remittance inflow, the foreign currency reserve is increasing. It hit $9.56 billion on Tuesday. Experts said, the economic outlook in the Gulf Cooperation Council (GCC) countries would be decisive for Bangladesh. The GCC countries together accounted for 63 per cent of total flows in fiscal 2009. Saudi Arabia was by far the largest source of remittance with $2.9 billion, followed by UAE with $1.8 billion.

-The Independent