FE Report

Bangladesh might earn US$ 10.87 billion in remittances in the current financial year with a 12.3 per cent year-on-year growth, the multilateral lending agency World Bank said Wednesday.

A Bangladeshi worker abroad remits home Tk 101,579 ($1476.4) per year on an average, 2.4 times higher than the country's per capita GDP, according to a WB study, unveiled on the day.

The survey said international petroleum prices, annual growth in both gross domestic product (GDP) and the number of workers going abroad with jobs, and exchange rate are the major factors to impact on the remittance flow to Bangladesh.

"If Bangladesh can send abroad 0.61 million workers, the global fuel oil price stands at $ 68.75 per barrel and the exchange rate against dollar stands at Tk 68.8, the remittance flow could cross $10.8 billion mark in the current fiscal," said WB's senior economist Zahid Hussain, while unveiling the study findings in Dhaka.

Bangladesh in the last fiscal year 2009 earned a total of $9.68 billion in remittance, according to Bangladesh Bank data.

Mr. Hussain said: "One dollar increase in oil prices will raise the annual remittance flow by $15 million and depreciation of exchange rate by one taka against dollar will swell the annual remittance by $18 million."

The economist said as the Middle East economies are heavily dependent on petroleum prices and two-thirds of the non-resident Bangladeshis (NRBs) work in that region, the global oil price is a major factor related to the country's remittance income.

Of the total migrants, at present 42.13 per cent are working in Saudi Arabia, 16.24 per cent in the United Arab Emirates and 10.02 per cent in Kuwait.

Quoting the survey, the senior economist of the Washington-based lending agency said remittance is playing a vital role in alleviating poverty in Bangladesh.

The remittance-receiving households live better with adequate food, cloths and household appliances, save more money and spend more fund for modern agricultural inputs, the WB survey said.

The survey has been done on 500 households in some 20 districts.

About the impact of the global economic recession on remittance flow, Mr. Hussain said Bangladesh would not be affected much as most of its migrants are not employed in the meltdown-hit countries.

"If the petroleum price maintains a stable rate of nearly $70 per barrel and the taka-dollar exchange rate maintains a stable situation, the recession may not hit the foreign wage earnings," he said.

The economist suggested sending of more workers abroad for the sake of poverty reduction in the country.

Mr. Hussain also said to engage the country's widely-spread microfinance institutions in migration cost financing as a migrating worker needs to spend Tk 161,346 on an average, four times higher the country's per capita GDP, to get a job abroad.

The WB economist suggested framing of better regulations for the domestic manpower exporting agencies to check malpractice and provide available information on cost of migration, risk, overseas job market and migrants' rights.

The regions lagging behind in terms of migration should be given preference to help reduce poverty, Mr. Hussain said.

Acting country director of World Bank's Dhaka office Robert Floyd said the WB has a target to provide more than $1.0 billion to the Bangladesh government in the current FY2010.

The Padma Bridge and some other ongoing projects would be given priority in next year's lending programme, he said adding they are also giving more focus on nutrition this year as the South Asian region is lagging far behind in supplying nutritious food to the people.