DHAKA: A dip in inward remittances due to the fall in the number of Bangladeshis going abroad for jobs and also because of the ongoing tension in the Middle East is worrying Bangladesh economists.
According to reports, economists have aired their concerns about the decrease in the country`s remittance earnings since April last, saying that if the trend persists, it might destabilise the balance of payments (BoP) situation that has been rather comfortable for quite sometime.
"The appreciation of the local currency against the US dollar is also one of the main reasons for the fall in remittance inflows," the economists say.
According to the data available from the Bangladesh Bank (BB), the aggregate remittance earnings during the April-August 2013 period dropped by more than $100 million from the corresponding period last year. Only in July, on the eve of Eid Al Fitr festival, the remittance inflow had improved last.
Bangladesh saw the biggest fall in manpower export to the United Arab Emirates (UAE) and Oman. The country sent less than 10,000 people to the UAE until July end as against 215,000 people in the 12 months of 2012.
It was the same case with Oman, another key market for Bangladesh. Only 81,000 went to Oman until August last against 170,326 in 2012.
According to experts, the downtrend might pose a threat to the country`s existing foreign exchange reserves.
The government recently stepped in to export manpower under a government-to-government arrangement alleging that the private recruiting agencies were charging the poor people unusually high fees for jobs abroad.
Quoting Dr A. K. Enamul Haque, a senior researcher at the Dhaka-based Economic Research Group (ERG), the Bangladeshi media said appreciation of the taka against the dollar was the key reason for the fall in remittances.
The taka appreciated by around five per cent during the April-August period against the corresponding period in 2012, when it had appreciated marginally.
"You will see that there was a robust growth in remittances in India during the recent months as the rupee depreciated against the US dollar," said Dr Haque, also a professor of economics at the United International University.
Currency movement
Dr Haque said Bangladeshi expatriates were watchful, and waited to see whether it depreciated or not.
"In my opinion, they are watching the currency movement. If there is any depreciation of our currency, the situation will start improving," he added.
He, however, said there was also a fall in the number of new workers going abroad for jobs.
"The numbers of expatriates are almost same," the economist, said, "In major markets like the KSA and Malaysia, expatriates are on the run because of the lack of required documents and this is affecting the remittance inflow," he added.
According to the experts, if the Syrian crisis or any other crisis in the Middle East countries pushed up the price of oil, then the country`s forex reserves might deplete fast. "For the time being, we are safe as we have more than $16 billion in foreign reserves," he said.
The country`s foreign exchange reserves now stand at over $16 billion and the remittance inflow is believed to be the key contributor to the commanding position of the dollar reserves.
The manpower exports used to grow at a double-digit rate.
Source: Times of Oman
BDST: 1432 HRS, SEP 15, 2013
RS/Jck
