The balancing act of migration: the case of Bangladesh

Sameer  Khatiwada

Sameer Khatiwada

By Sameer Khatiwada, Economist, International Institute for Labour Studies

When I arrived at Shah Jalal InternationalAirport in Dhaka on a recent trip, I could not help but notice the hundreds of Bangladeshi migrants returning from abroad, clutching their many over-packed bags – no doubt filled with gifts for relatives. Their look of pride at having found prosperity was hard to miss.

Throughout history, people have left their homes in search of a decent job and a better life, often travelling vast distances and facing daunting obstacles. Bangladeshis are no different – the lure of a better economic future has led to comparatively high emigration rates, with many drawn to the construction sector in the Middle East.

In fact, the intention to migrate among Bangladeshi youth is the highest in South Asia and is also higher than in most South East Asian countries. A 2011 survey shows that 35 per cent of Bangladeshis aged 15-24 want to move permanently abroad.

Young people’s intention to migrate permanently to another country, 2011

Young people’s intention to migrate permanently to another country, 2011Source: Gallup World Poll, 2012.

Young people’s intention to migrate permanently to another country, 2011
Source: Gallup World Poll, 2012.

Despite impressive GDP per capita growth in recent years, formal job creation remains weak while informal jobs and underemployment are common in Bangladesh. The annual flow of Bangladeshis in search of employment overseas has increased fourfold – from around 248,000 in 1999-2000 to more than 980,000 in 2007-2008. This increase was driven largely by demand for less-skilled workers in the Gulf countries.

Bangladesh is one of the largest recipients of remittances, which in 2010 amounted to more than 10 per cent of the country’s GDP, or close to US$ 11 billion. Remittances flowing into Bangladesh have increased more than fivefold between 1999-2000 and 2009-2010.

On average, a Bangladeshi migrant sends home approximately US$2,760 a year, with low skilled workers sending the largest amount.

Remittances have played an important role in reducing poverty and aiding economic development in Bangladesh. They have also proven to be one of the most resilient sources of capital, and are more stable than other macroeconomic variables.

But the joy on the faces of returning migrants masks the financial hardships that many have endured to go abroad, and the working conditions they faced once there. Bangladeshi migrants pay some of the highest recruiting fees in the region – the average cost per person wishing to work abroad is 4.5 times higher than the GDP per capita of Bangladesh.

In the host countries, migrants often face abuse in the form of late payment, pay that is below the minimum wage, lack of social protection and benefits, and deplorable working conditions.

It is the prospect of higher earnings – and, in many cases, any earnings at all – that lures Bangladeshis abroad, despite the hardships they face.

While the appeal of a better income will never fade, it is important for the government to make it attractive to work in Bangladesh, prevent abuse by the recruiting agencies, and ensure better working conditions while abroad. Most importantly, migration should be viewed as a complement not a substitute to development.

Cost of migration: ratio of cost per person and GDP per capita

Cost of migration: ratio of cost per person and GDP per capitaSource: IILS calculations.

Cost of migration: ratio of cost per person and GDP per capita
Source: IILS calculations.

This article is based on a forthcoming study on Bangladesh as a part of the series entitled Studies on Growth with Equity by the International Institute for Labour Studies.

9 thoughts on “The balancing act of migration: the case of Bangladesh

  1. What do you think the BD Government can do to alleviate the plight of Bangladesh workers abroad? I would be very interested to hear about your recommendations.

    • Thank you so much for your question.

      Among the things that the Bangladeshi government can do include: better train the labour attaches in embassies (particularly in the MENA countries) to deal with labour rights and working conditions issues; sign bilateral agreements with governments to ensure better working conditions for workers; have hotlines for workers abroad that they could call at any time with their questions and grievances; better regulate the recruiting agencies in Bangladesh in order to avoid abuse etc.

      If you are further interested in the topic, we would be glad to send you the link to the pdf of the report, which will be available in the next two weeks. The chapter on migration has some specific recommendations for the Bangladeshi government.

      • Sameer, your comments on migration cost proved very useful for me. I want to read the recommendations to the Govt of Bangladesh. Ridwanul Hoque, currently working with ILO and IOM on labour migration studies.

  2. Sameer:

    I am afraid you are painting a rosy pictures. When I travel back to Dhaka, in addition to overpacked bags and happy faces, I also see anxious faces. I am always saddened when I talk to them. it helps by the fact that I speak the dialect of the district that sends a large percentage of people to the middle east. I end up filingl out their disembarkation cards.

    They tell me about working conditions and some of them are being deported for working illegally. They are forced to do that to make extra money to pay off the debt incurred to buy the permit to work as well as the cost of air travel. Many cases, their families have sold land or borrowed money at high interest rate to pay for the trip.

    These guys will be harassed by custom officers on their way out and the police as soon as they get out.

    This does not detract from the positive macroeconomic effects of migration. The point is that not everybody wins and the government should protect these vulnerable people both inside and outside the country. Most of the discussion of migration only looks at the macroeconomic benefits without looking at the personal cost of such move.

    • Thank you Asif for your comments. Indeed, as you rightly point out, migrants face abuse both at home and abroad. At home, it starts with the recruitment agencies and the custom officials and abroad it is in the hands of their employers. We are definitely not trying to make light of this situation, far from it. The point of the piece was to highlight the macroeconomic effects of migration and remittances, while making our readers cognizant of the plight migrants face.

  3. Hi Sameer,

    I’m not sure that you can conclusively say that remittances aid economic development. Receiving remittances can also act as a disincentive for the state to develop productive local industries. I’ve even seen some evidence that suggests that remittances are not always spent in the most beneficial way possible. What’s your take on this?

    • Dear Manoj, thank you for your comments. Indeed, the empirical evidence on the link between remittances and development is mixed. Moreover, the results vary by country/region. That said, several studies have shown that increase in remittances (into countries such as Bangladesh and Nepal) has helped in poverty reduction. You see this if you look at the household and income surveys, not just at the macro level… But of course, remittances/migration cannot be a substitute for good macroeconomic and development policies. It is one of many tools at the government’s disposal.

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