Remittance Inflow and the Challenges of Migrant Workers
Remittance Inflow and the Challenges of Migrant Workers
Afifa Jahan Pushpo
Exports and remittances from expatriates are two of the primary pillars of Bangladesh’s economy. A significant portion of the country's financial stability is supported by remittances sent by migrant workers. This reliance became particularly evident following the mass uprising, during which remittance inflows played a crucial role in reviving the fragile banking sector and restoring public confidence.
Toward the end of the previous government’s tenure, small and medium-sized businesses struggled due to a severe dollar crisis, as banks were unable to issue Letters of Credit (LCs). This crisis also affected the government, which found it increasingly difficult to import essential commodities like fuel and coal for power generation. Additionally, Bangladesh’s electricity import agreement with India’s Adani Group, coupled with petroleum-related expenses, required approximately $9 billion, further straining the economy.
The Rising Dollar Exchange Rate :
From August 2024 onward, the export-import trade experienced significant volatility due to rising dollar exchange rates. In May 2024, the exchange rate stood at 117 BDT per USD, but by August, it had climbed to 121 BDT per USD. Despite this economic turbulence, remittance inflows remained strong, reaching nearly $27 billion in 2024. According to Bangladesh Bank, remittance inflows in December 2024 amounted to $2.63 billion, marking a 33% increase compared to December 2023.
This growth in remittances provided much-needed relief to Bangladesh’s banking system. The influx of foreign currency not only helped ease the dollar crisis but also played a critical role in stabilizing the financial sector. The increase in remittances was attributed to various government policies that encouraged migrant workers to send money through legal banking channels rather than informal means.
Policy Interventions and Economic Impact :
Following the transition to an interim government, several policy measures were introduced to stabilize the banking sector. Although these changes initially caused temporary disruptions for customers, they ultimately improved cash flow within financial institutions. One of the most significant policy interventions was the introduction of various incentive schemes aimed at encouraging remittance inflows through official banking channels. These incentives contributed to a sharp increase in remittance inflows, alleviating pressure on the country’s foreign reserves.
As a result of these policies, Bangladesh managed to settle $1.75 billion in outstanding payments without having to dip into its central bank reserves. By early 2025, the remaining dues had been reduced to just $400 million, a figure expected to be cleared soon. This financial improvement underscored the critical role of remittances in maintaining economic stability and reducing the country's external financial liabilities.
Challenges Faced by Migrant Workers :
Despite the significant economic contributions of migrant workers, their struggles remain largely unaddressed. Although some improvements in airport services were observed after August 2024, many expatriates continue to face bureaucratic hurdles, recruitment fraud, and exploitative working conditions. The lack of diplomatic efficiency and unethical practices by recruiting agencies and employers often place migrant workers in vulnerable situations abroad.
One of the most pressing concerns is the treatment of female migrant workers. Many women face physical and psychological abuse, with little to no legal or institutional support. Cases of exploitation, non-payment of wages, and forced labor remain alarmingly high, particularly in the Middle East and some Southeast Asian countries. Despite these ongoing issues, there are insufficient policies to provide meaningful protection or support for female workers in distress.
Another critical issue is financial fraud against migrant workers. Many migrants entrust their life savings to family members or close associates, only to be betrayed and left penniless upon their return. Unfortunately, no stringent laws or enforcement mechanisms exist to protect them from such financial deception. As a result, many migrant workers who return home after years of hard labor struggle with financial insecurity and, in some cases, extreme poverty.
The Need for Stronger Policies :
The plight of migrant workers underscores the urgent need for stronger policies to protect their rights and well-being. A comprehensive legal framework should be established to safeguard migrants from recruitment fraud, workplace exploitation, and financial scams. Additionally, bilateral agreements with host countries should be strengthened to ensure fair treatment and protection for Bangladeshi expatriates.
The government should also focus on enhancing diplomatic efficiency to negotiate better conditions for migrant workers, including improved labor rights, legal assistance, and repatriation support in cases of distress. Moreover, increased awareness campaigns are necessary to educate migrant workers about safe migration practices and financial management to prevent fraud and exploitation.
while remittances remain a vital component of Bangladesh’s economy, the challenges faced by migrant workers must not be overlooked. Strengthening support mechanisms for expatriate workers will not only ensure their well-being but also contribute to the country’s long-term economic sustainability. Addressing these issues with effective policies will enable Bangladesh to maintain a stable flow of remittances while ensuring that its migrant workers receive the respect and protection they deserve.
The writer is a student of Television, Film & Photograpy Department, University of Dhaka
Exports and remittances from expatriates are two of the primary pillars of Bangladesh’s economy. A significant portion of the country's financial stability is supported by remittances sent by migrant workers. This reliance became particularly evident following the mass uprising, during which remittance inflows played a crucial role in reviving the fragile banking sector and restoring public confidence.
Toward the end of the previous government’s tenure, small and medium-sized businesses struggled due to a severe dollar crisis, as banks were unable to issue Letters of Credit (LCs). This crisis also affected the government, which found it increasingly difficult to import essential commodities like fuel and coal for power generation. Additionally, Bangladesh’s electricity import agreement with India’s Adani Group, coupled with petroleum-related expenses, required approximately $9 billion, further straining the economy.
The Rising Dollar Exchange Rate :
From August 2024 onward, the export-import trade experienced significant volatility due to rising dollar exchange rates. In May 2024, the exchange rate stood at 117 BDT per USD, but by August, it had climbed to 121 BDT per USD. Despite this economic turbulence, remittance inflows remained strong, reaching nearly $27 billion in 2024. According to Bangladesh Bank, remittance inflows in December 2024 amounted to $2.63 billion, marking a 33% increase compared to December 2023.
This growth in remittances provided much-needed relief to Bangladesh’s banking system. The influx of foreign currency not only helped ease the dollar crisis but also played a critical role in stabilizing the financial sector. The increase in remittances was attributed to various government policies that encouraged migrant workers to send money through legal banking channels rather than informal means.
Policy Interventions and Economic Impact :
Following the transition to an interim government, several policy measures were introduced to stabilize the banking sector. Although these changes initially caused temporary disruptions for customers, they ultimately improved cash flow within financial institutions. One of the most significant policy interventions was the introduction of various incentive schemes aimed at encouraging remittance inflows through official banking channels. These incentives contributed to a sharp increase in remittance inflows, alleviating pressure on the country’s foreign reserves.
As a result of these policies, Bangladesh managed to settle $1.75 billion in outstanding payments without having to dip into its central bank reserves. By early 2025, the remaining dues had been reduced to just $400 million, a figure expected to be cleared soon. This financial improvement underscored the critical role of remittances in maintaining economic stability and reducing the country's external financial liabilities.
Challenges Faced by Migrant Workers :
Despite the significant economic contributions of migrant workers, their struggles remain largely unaddressed. Although some improvements in airport services were observed after August 2024, many expatriates continue to face bureaucratic hurdles, recruitment fraud, and exploitative working conditions. The lack of diplomatic efficiency and unethical practices by recruiting agencies and employers often place migrant workers in vulnerable situations abroad.
One of the most pressing concerns is the treatment of female migrant workers. Many women face physical and psychological abuse, with little to no legal or institutional support. Cases of exploitation, non-payment of wages, and forced labor remain alarmingly high, particularly in the Middle East and some Southeast Asian countries. Despite these ongoing issues, there are insufficient policies to provide meaningful protection or support for female workers in distress.
Another critical issue is financial fraud against migrant workers. Many migrants entrust their life savings to family members or close associates, only to be betrayed and left penniless upon their return. Unfortunately, no stringent laws or enforcement mechanisms exist to protect them from such financial deception. As a result, many migrant workers who return home after years of hard labor struggle with financial insecurity and, in some cases, extreme poverty.
The Need for Stronger Policies :
The plight of migrant workers underscores the urgent need for stronger policies to protect their rights and well-being. A comprehensive legal framework should be established to safeguard migrants from recruitment fraud, workplace exploitation, and financial scams. Additionally, bilateral agreements with host countries should be strengthened to ensure fair treatment and protection for Bangladeshi expatriates.
The government should also focus on enhancing diplomatic efficiency to negotiate better conditions for migrant workers, including improved labor rights, legal assistance, and repatriation support in cases of distress. Moreover, increased awareness campaigns are necessary to educate migrant workers about safe migration practices and financial management to prevent fraud and exploitation.
while remittances remain a vital component of Bangladesh’s economy, the challenges faced by migrant workers must not be overlooked. Strengthening support mechanisms for expatriate workers will not only ensure their well-being but also contribute to the country’s long-term economic sustainability. Addressing these issues with effective policies will enable Bangladesh to maintain a stable flow of remittances while ensuring that its migrant workers receive the respect and protection they deserve.
The writer is a student of Television, Film & Photograpy Department, University of Dhaka
