D-8 to envisage a focused effort on remittances working group

Istanbul, Turkey | August 22, 2007 by D-8 Secretariat

Around the globe, millions of immigrants are sending billions of dollars back home. One sweaty bundle of bills or $200 Western Union moneygram at a time, they form what could be called Immigration, Inc. — one of the biggest businesses on the planet. It has grown into a gigantic industry that in its recent report, the World Bank portrayed these remittances as “larger than direct foreign investment in Mexico, tea exports in Sri Lanka, tourism revenue in Morocco, and revenue from the Suez Canal in Egypt”.

Bangladeshi expatriates sent home a record 3.32 billion U.S. dollars in the first seven months of the current fiscal year, marking a 29 percent growth over the same period of the last fiscal year according to the central bank, the Bangladesh Bank.

Of the total remittance inflow into the country, the highest amount, or 29 percent, came from Saudi Arabia last fiscal. The non-resident Bangladeshis (NRBs) from Saudi Arabia sent US$ 1734.7 million in the 2006-07 fiscal compared to $ 1562.21 million in the 2005-06 fiscal, registering 11 percent growth, according to Bangladesh Bank’s country-wise remittance inflow statistics.

Sources in the banking sector said the private commercial banks (PCBs) also came forward to take proper measures to increase their earnings from remittance services. Sonali Bank, Agrani Bank, Pubali Bank and Islami Bank Bangladesh Ltd are the major players handling these remittance inflow. The NRBs send roughly $ 7 billion every year and a significant amount of the total amount still comes through ‘hundi’, a shady way of money transfer which is gradually have been eliminated by a more encouraging measures from Bangladesh banks.

Many banks have opened branches abroad to make it easier for expatriate to send money back home, while many others have made corporate deals with overseas money transfer companies so that the NRBs can avail of authorised channels to do the job.

The central bank’s data showed that remittance inflow from the United Arab Emirates (UAE) into Bangladesh rose by almost 57 percent. The NRBs from the UAE sent $ 804.84 million in the FY ‘07 against $ 512.64 million in the FY ‘06.

The remittance from Kuwait and Qatar grew 49.8 and 44 percent. In FY ‘07, Bangladesh received $ 680.7 million from the NRBs in Kuwait and $233.17 million from expatriate Bangladeshis in Qatar.

The NRBs from the ME countries sent $ 3734.81 million in FY ‘07 fiscal compared to $ 2906.79 million the previous fiscal, registering a 28.48 percent growth.

In FY ‘07, the NRBs from the UK sent $ 886.9 million compared to $ 517.39 million in FY ‘06, showing a 71.41 percent growth.

Registering a 90.8 percent growth, the remittance inflow from Italy into Bangladesh reached $149.65 million last fiscal from $ 78.43 million the previous fiscal.

Apart from the ME and Europe, the highest remittance comes from the USA. In the last fiscal, the amount sent by the NRBs from the USA marked a 32.64 percent rise over that of the previous fiscal. The amount was $ 930.33 million last fiscal, while it was $ 701.37 million the previous fiscal.

The other D-8 member state, Turkey, has around 5.6% of Turkey’s population is living abroad with most (i.e: 88%), in Europe. Remittances to Turkey hit nearly $1 billion in 2005, according to data from the Turkish Central Bank.

In short, temittances have more than doubled since 2000, and with globalization increasing the numbers of people on the move, there’s no end in sight. In a recent report, the World Bank said that globally, remittances totaled nearly $276 billion in 2006. This mean that if all the guest workers incorporated as a company, their migrant multinational would rank No. 3 on the Fortune 500 list, trailing only Wal-Mart and Exxon Mobil in annual revenue.

“With all this potential in mind, we want to put more focus on this D-8 migrant worker issue considering that the remittance sent home plays a quite significant role in cutting down poverty lines in our member states,” says D-8 Secretary General, Dr. Dipo Alam. He added that the remittance are allocated for food, education, health, housing, as well as for developing micro industry or small & middle enterprises.

D-8 Secretariat is taking a concentrated initiative to set up a D-8 working group on this issue to help member countries to better route this potential remittance for the development of the D-8 member countries. Secretariat had contacted some participants who attended International Meeting on Migrant Workers in Brussels, Belgium, to work with D-8 Organization on ideas to set up a Working Group on Migrant Workers and Remittances. This would also include cooperation of international organization such as ADB, World Bank and IMF.

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