Hundreds of workers heading back home as Saudi Iqama fee outweighs a year's income

Every day, between 350 and 400 migrant workers return to Bangladesh, many of them facing a difficult reality. Seventy percent of these returnees come from Saudi Arabia, the largest destination for Bangladeshi workers, driven home by the skyrocketing cost of work permits. Known as the Iqama fee, it now stands at an eye-watering 11,000 Saudi riyals per year – more than the annual income of many employed in domestic work, construction, or cleaning.

​​​​​This cost rise has already hurt the remittance inflow from Saudi Arabia, which has plunged by nearly $1 billion in 2023 compared to two years earlier. Recruiting agencies and experts warn that without high-level intervention between the governments in Dhaka and Riyadh, this vital market for Bangladeshi workers could be lost.

The Bangladesh Association of International Recruiting Agencies (Baira) has written to Chief Adviser Professor Muhammad Yunus urging him to leverage his international stature to persuade Saudi authorities to reconsider the Iqama fees.

Experts and recruiting agents made these remarks while addressing a roundtable on overseas employment and its challenges organised by The Business Standard at its office recently. The discussion was moderated by Sajjadur Rahman, deputy editor of TBS.

"We receive 350-400 returning workers at Dhaka airport every day. Around 70% of them are from Saudi Arabia, with the rest coming from Oman, Malaysia, and other Gulf states," said Al-Amin Noyon, manager of the BRAC Migration Welfare Centre.

Noyon, who works at the Dhaka airport for BRAC, noted a sharp rise in the number of returnees in recent months. "Many are arriving empty-handed and even barefoot," he added.

Why Iqama became costlier 

Recruiting agencies have also reported that the employment conditions in Saudi Arabia are becoming increasingly difficult.

"Due to the high Iqama fees, the Saudi market is almost on the verge of closure for us. For the past year and a half, I haven't received any demand from Saudi Arabia. You can ask any recruiting agency operating there – nobody is happy," said Noman Chowdhury, first vice president of Baira.

Chowdhury explained that while agencies are not responsible for issuing Iqamas, Saudi employers are reluctant to pay the steep costs. The Iqama fee has risen sharply in recent years starting at 200 riyals per month, increasing to 400, and finally reaching 800 riyals in 2019.

Heavy financial burden on employers

As a result, employers now pay 8,600 riyals per year to the labour ministry for each worker's Iqama. In addition, they must also cover insurance and an extra 600 riyals for the interior ministry, bringing the total annual cost to 11,000 riyals per worker.

"Employers struggle to pay such large sums, especially for 100 or 1,000 workers at a time," Chowdhury said. He said that this situation has worsened over the past year and a half, with 60-70% of foreign workers, including Bangladeshis, now lacking valid Iqamas.

He urged the interim government to take immediate action, warning that if no steps are taken, Bangladesh could lose the Saudi market entirely, leaving thousands of workers jobless.

One such worker, Mohsin Hallal from Barishal, left for Saudi Arabia on 6 June this year after paying Tk4 lakh to a recruiting agency for a cleaner job. However, his employer has yet to provide him with an Iqama, leaving him unemployed.

His wife, Koli, filed a complaint with the Bureau of Manpower, Employment, and Training (BMET) in late September. According to the complaint, Koli has had to send Tk60,000 to her husband in the last four months to cover his expenses in Saudi Arabia. Now, they are seeking justice from the authorities.

Hundreds of other workers face similar challenges but many are unable to reach BMET for help. Some settle these issues through village dispute resolution or with the help of NGOs.

Hundreds of complaints 

BMET officials report receiving hundreds of complaints from migrant workers each month, with around 80% related to Iqama and employment issues in Saudi Arabia. In the last six months, BMET has logged 1,133 complaints, while the total for 2023 was 2,200.

Typically, workers entering Saudi Arabia on an employment visa receive a three-month temporary permit. Employers are required to secure a work permit within this period, paying the 11,000-riyal Iqama fee for workers in non-industrial, low-wage sectors such as construction, cleaning, and agriculture. Without this, workers become undocumented.

"The current Iqama fee is five times higher than it was a decade ago," said Shamim Ahmed Chowdhury Noman, former secretary general of Baira. In each Gulf state, employers are responsible to pay the Iqama fee. Previously, it was 1,200-2,000 riyals per worker until 2015, but the Saudi government has steadily increased the fee to encourage local recruitment.

In 2019, the Saudi government, under a drive for job creation, had imposed fees on expatriate workers to encourage hiring of Saudis, reports Saudi Gazette on 13 August this year. But it hasn't been effective because their own people don't take on low-level jobs. As a result, employers find ways to hire foreign workers, but it's Bangladeshi workers who end up in trouble. "Employers delay paying the Iqama fee, leaving our workers in limbo," he said.

"As a result, our workers become undocumented. When they go out, the police detain and deport them. The employers and authorities in Saudi Arabia are essentially profiting from this situation," he added.

Sharmin Afroz Shumi, chairman of Infinity HCM Ltd, raised concerns over why Bangladeshi workers are sent abroad for extremely low wages, questioning why neither the government nor recruiting agencies negotiate for better pay.

Md Nurul Islam, former director (Training) at the BMET, pointed out that there is a joint committee between Bangladesh and Saudi Arabia, which is supposed to meet every six months. However, it hasn't convened in six years.

"Bangladesh should firmly state that we will not send workers abroad for such low salaries," Islam said.

Recommendations to resolve the issue  

At the roundtable, stakeholders urged the interim government to raise the issue with Saudi authorities to give iqama fee exemptions for Bangladeshi poor workers.

Shamim Ahmed Chowdhury Noman said the Saudi authorities need to hold the employers accountable through a bilateral MoU. "If employers fail to provide Iqamas, they should be blacklisted or required to compensate our workers," he said.

Syed Saiful Haque, chairman of the Welfare Association for the Rights of Bangladeshi Emigrants Development Foundation, said, "Six commissions have been formed to address state reforms. I strongly demand the establishment of a commission to investigate corruption in the migration sector, particularly to identify why it costs so much to send workers from Bangladesh abroad."

Mohammed Fakhrul Islam, first joint secretary general of Baira, said, "Workers should be sent abroad through an integrated database to control immigration costs."

The TBS roundtable discussions also highlighted the reasons behind the prevalence of low-paid jobs, including backdated training, ineffective technical training centres, difficulties in obtaining documents such as passports, visas, and work permits, as well as syndicates in the Malaysian labour market and the poor services of Bangladeshi embassies abroad.

Manpower exports are on the decline 

According to the BMET, overseas employment from Bangladesh saw a 40% year-on-year decline in September this year, although it rose by 28% compared to the previous month, with 64,697 workers sent abroad – 44,269 of whom went to Saudi Arabia.

The trend in foreign employment has been decreasing recently due to political instability and the closure of the Malaysian market, but recruiters report signs of recovery as conditions stabilise.

Before the pandemic, Bangladesh typically sent between 60,000 and 70,000 workers abroad each month. After the pandemic, this number surged to over 100,000 per month due to rising demand and the reopening of the Malaysian market.

Remittance from Saudi is decreasing

The trend has also impacted remittances from Saudi Arabia, which employs around 30 lakh Bangladeshi workers. Despite an increase in the number of workers bound for Saudi Arabia, remittances have declined over recent years.

Approximately 16 lakh workers have gone to Saudi Arabia in the past three years. According to BMET data, between 2022 and 2023, 24 lakh workers were employed abroad, with half of them going to Saudi Arabia. Despite this record employment rate, expatriate income from Saudi Arabia has steadily declined.

Remittance flows from Saudi Arabia were $4.16 billion in 2021, $4.01 billion in 2022, and $3.28 billion in 2023, according to BMET. Sector insiders believe that Saudi-bound workers cannot send remittances as expected due to poor job conditions related to work permits.

"Bringing unskilled workers from Bangladesh has become a business in Saudi Arabia, so many Saudis are getting involved with Bangladeshis. By opening shell companies, they are bringing Bangladeshis with only three months of Iqama," Shariful Hasan, Head of the BRAC Migration Program, told TBS.

Akbar Hossain Manju, second joint secretary of Baira, said, "Visa buying and selling is illegal worldwide, but we have legalised it. Visas are given to whoever pays more. This has created unhealthy competition and increased the cost of sending workers to Saudi Arabia."

Breaking syndicate a litmus test   

A small, politically connected syndicate has severely hampered Bangladesh's potential in overseas employment markets, exploiting workers by increasing migration costs and restricting opportunities, an expert said.

"This is a litmus test for the interim government to break the grip of this syndicate. We expect to see real action taken against them," said Prof CR Abrar, executive director of the Refugee and Migratory Movements Research Unit.

He added that ministers, members of parliament, and private sector figures were involved in the syndicate and should all be held accountable for their roles in stifling opportunities for workers abroad.