Bangladesh missing out on remittance opportunities for lack of skilled labour

Overseas job diversification has got momentum in recent months with skilled workforces migrating abroad for jobs in various sectors, but the number of such migrants is too low to significantly boost inward remittances to the country that is now badly in need of healthy foreign exchange reserves to cushion the economic fallout of the Russia-Ukraine War.

In Gulf countries, there has been a significant rise in demand for foreign workers, even more so skilled ones, however, Bangladesh is missing out on this opportunity as it still remains mostly a supplier of unskilled and low-skilled workers.

The government in its 8th Five-Year Plan has set an ambitious target of earning $150 billion in foreign remittance and sending at least 50 lakh new workers abroad – with nearly half of them being in the skilled category – between July 2020 and June 2025.

But it failed to reach the goal in the last two fiscal years as the expansion of the overseas employment market with skilled ones was insignificant. In the last two years, the country received $45.8 billion in remittances against a target of $60 billion.   

Amid pandemic-induced disruptions, Bangladesh could send 12.68 lakh workers abroad in the last two years. In FY22 alone, around 9.88 lakh Bangladeshis secured jobs abroad, and 57% of them were unskilled workers, according to the Bureau of Manpower, Employment, and Training (BMET).  

Remittance inflows to the country declined by 15% year-on-year in FY22.

The 10-point agenda concerning overseas employment mentioned in the 8th Five-Year Plan – initiatives for institutional and legal reforms, capacity enhancement, market expansion, skills development, access to service, access to finance, protection of rights and well-being, digitalisation, private sector engagement, cost of migration, and reintegration – remains mostly untouched.

The government should chalk out long-, medium- and short-term programmes to develop human resources with the necessary training to cater to the different needs of overseas job markets, which will help bring in more remittances, said DrTasneem Siddiqui, founding chair of the Refugee and Migratory Movements Research Unit (RMMRU).

MdMamun-Al-Rashid, secretary to the Planning Division, however, told The Business Standard, "We always attach priority to projects on building skilled manpower. Many such projects are underway but no new projects have been submitted in recent times."

The government is highly concerned about the current dollar crisis, he mentioned, adding that is why it has imposed a curb on all unnecessary foreign tours.

"Even no new projects are being passed with foreign trips. We are trying to utilise remittances and save dollars to face the current and future challenges," he said.

As sending skilled workers is a mid-term measure to increase remittance inflows, experts have suggested that the authorities take some immediate initiatives – which include raising the investment limit in bonds for non-resident Bangladeshis, and encouraging them to send money home through banking channels by declaring special packages, incentives – to boost remittance receipts.

Tasneem Siddiqui told TBS that the government must allow NRBs to invest up to Tk10 crore or even more in bonds. Besides, the government needs to review the various taxes and VAT imposed on the bonds and make them investment-friendly, she added.

Moreover, cash incentives on remittance through banking channels can be raised to 5% from 2.5%, she said, adding, "This can be done only for three months amid the current crisis. If the government provides such a facility, no one will transact money through hundi."

Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), last month, however, suggested providing incentives only for investment, employment, and productive sectors.

Job opportunities in Gulf countries

The UAE saw a 10% increase in job creation in the second quarter of 2022 as compared to the first quarter, according to Cooper Fitch's latest report.

Data show that most of the new jobs are being generated in sales and marketing, cloud, public sector, strategy software development, cybersecurity, and finance.

Cooper Fitch analysts noted that the UAE and other Gulf countries look set for a very positive employment year in 2022 with each country focusing on delivering against their medium and long-term strategies around job creation.

The UAE saw the biggest jump in job creation among the Gulf countries, followed by Bahrain at 9%, Oman at 6%, Qatar at 4%, and Saudi Arabia at 3%. Kuwait's job market contracted by 2% in Q2 this year.

It is estimated that thousands of jobs will come up in new-age sectors including 40,000 in metaverse alone in the UAE, reports Khaleej Times. Aside from that, the country will also generate opportunities for 100,000 coders.

As local banks increasingly shift towards digital banking, the latest UAE Central Bank report revealed that the number of bank employees increased by 845 in the first quarter of this year to 33,882 as compared to Q1 last year while the number of branches shrank by 22 to 585. This reflects that lenders are increasingly hiring IT and sales and marketing professionals to propel their growth.

But, Bangladeshis are hired mostly as security guards, drivers, and construction workers in the UAE with a monthly salary of Tk30,000-40,000, said Abdul Bashar, former president of the Bangladesh Association of International Recruiting Agencies (Baira).

What we need to do to boost remittance inflow

Besides, Bangladeshis get jobs as cleaners, construction workers, security guards, and drivers in other Gulf countries, he said adding that some semi-skilled workers including plumbers, electricians, and technicians of refrigerators and air conditioners have made their entry into different countries such as Oman.

"It should be the responsibility of the foreign missions to provide information about the job opportunities that have been created in various sectors, including in IT, in the UAE. If they inform us, we can contact employers and send workers," Shamim Ahmed Chowdhury Noman, former secretary general of Baira, told TBS.

"Some workers are able to secure IT jobs by personally communicating with the employers online, but their number is very insignificant," he added.

The Gulf region is the largest job provider for Bangladeshi workers as nearly 50 lakh Bangladeshis are currently employed there, according to an unofficial estimate.    

Six Gulf countries generated 93% of total foreign jobs for Bangladeshi workers in the first six months of this year, BMET data show.

Foreign job diversification

Bangladesh has started exporting health staff. The country has already sent 1,000 nurses and lab technicians to Kuwait in the last two months.

Besides, some other destinations including Japan, Australia, and Europe are hiring skilled workers as technical interns, caregivers, IT professionals, and RMG workers. But the number is nominal.    

"The skilled migrations, including nursing, that are now taking place are happening at a very small scale. Some 100-200 people are going. This is insignificant," said DrTasneem Siddiqui of the RMMRU.

"We must set a target to send 40,000-50,000 people. When 50,000 professionals will get jobs in these sectors, the government will not have to look back."

She also asked for arranging special training programmes to upskill people after setting a big target in the first place.

Bangladesh ranked sixth in the list of top countries of origin for international migrants, and was the eighth largest remittance-receiving country in 2020, according to the World Migration Report 2022 released in December last year by The International Organisation for Migration (IOM).

This means even after sending more workers abroad, Bangladesh earns less in remittances.

Bangladesh's remittance receipts in 2020 stood at around $21.75 billion.

The top remittance beneficiaries were India ($83.15 billion), China ($59.51bn), Mexico ($42.7bn), the Philippines ($34.91bn), Egypt ($29.60b), Pakistan ($26.11bn) and France ($24.48bn).

Major competitors in the overseas job market – including India, Pakistan, and the Philippines – gain much from the skilled workforce they send abroad, data from multiple sources show.

The average monthly remittance sent by a Bangladeshi expatriate is $203.33 (Tk17,236), while it is $564.1 for a Filipino worker, IOM data say.

Moreover, the monthly average income of a Pakistani expatriate is $275.74 and $395.71 for an Indian, and $532.71 for a Chinese citizen.

Expatriate Welfare and Overseas Employment Minister Imran Ahmed said Bangladesh's remittance receipts will soon bounce back from the FY22 dip as some 10 lakh workers went abroad last year and more are in the pipeline.

"We have started issuing employment permits this month for Malaysia.

"Besides, we have reached an agreement with Greece – for the first time with a European country – to send workers to Europe in a legal way. We may start sending workers to some other countries soon," he said.