Re: [ALOCHONA] Bangladesh bickers as overseas cash falters

This should by our main focus for Bangladesh. BAL was elected to run the country not spend too much time to "Tackle" BNP. People already did that by voting against BNP. It seems BAL is wasting too much time in mega projects that we do not need and not looking into increasing efficiencies in vital sectors like power, transportation, man power export, water resource planning and environment.

We have witnessed changes in exchange rate recently. This is going to impact most Bangladeshis in a bad way (OK few garment owners will be happy!).

-----Original Message-----
From: Isha Khan <bdmailer@gmail.com>
Sent: Tue, Feb 15, 2011 2:27 pm
Subject: [ALOCHONA] Bangladesh bickers as overseas cash falters

 

Bangladesh bickers as overseas cash falters

By Syed Tashfin Chowdhury

Bangladesh, which maintained annual economic growth of over 6% when the mightiest world economies were on their knees during the 2007-2009 financial turmoil, is facing a possible balance of payments crisis as a key part of that success story - remittances from overseas workers - appears set to decline.

Remittances, worth as much as 11% of gross domestic product, show signs of reversing their usual strong growth, with an actual fall-off in recent months. As the government and recruiting agents squabble over what is going wrong and how to fix it, Malaysia last month turned the screw by saying it would send home more than 300,000 Bangladeshi workers for visa-related reasons.

"It is definitely a matter of concern," Bangladesh Institute of Development Studies (IDS) research director Zaid Bakht told Asia Times Online. The decline is due to sluggish migration, which in turn is linked to a slow global economic recovery, he said.

The changing trend of remittances from workers, most sent abroad by recruiting agencies such as Riaz Overseas Ltd, Greenland Overseas Ltd, Ahmed and Co Ltd, hurts families and also damages Bangladesh's foreign currency reserves and the country's ability to pay for imports.

"Remittances have always helped Bangladesh with a strong foreign currency reserve till now," said Quazi Kholiquzzaman Ahmad, chairman of the governing body of Palli Karma-Sahayak Foundation (PKSF) (Rural Work-Aid Foundation) Dhaka. "It is imperative for the Bangladesh government to determine the reasons behind the decline."

IDS director Bakht said: "If the declining trend in remittances persists, our economy will face serious balance of payment problems soon."

The country's overall balance of payments recorded a US$873 million deficit in the five months through November 2010 compared with a $2.2 billion surplus in the year-earlier period due to a lower growth of inward remittances and a deficit balance in the financial account, the central bank announced last week. The current account balance decreased by over 66% to $563 million from $1.67 billion.

"The pressure on external sector may continue in the near future following a widening trade gap and poor performance of inward remittances," Financial Express reported, citing director general of the Bangladesh Institute of Development Studies (BIDS) Mustafa K Mujeri.

Pressure on foreign exchange reserve has increased a more is being paid for imports, particularly for fuel oils, food grains and power plant equipment, Financial Express reported.

Remittance growth slowed to a 13% increase, with cash flows rising to about US$11 billion, in the 12 months to June 30, 2010, down from 31% growth in early 2008. In January this year, remittances declined to $960 million from $969.4 million a month earlier and $998.98 million in November 2010.

That could point to an annual decline this financial year. As it is, workers sent home $7.7 million less to their families in the seven months through January than the $6.5 billion received in the corresponding months of fiscal 2010.

Remittances during the financial crisis helped the country to maintain vibrant growth, as exports of readymade garments and frozen food, the two most important export sectors, were affected by the global meltdown.

Money sent home from abroad is now worth more than three times the $3.37 billion sent in the year to June 2004 and, until the past few months, was climbing to almost double the $6 billion reached in 2006 and 2007, just before the global financial crisis struck, according to data from the Foreign Exchange Policy department of the Bangladesh Bank (BB).

The country's central bank, Bangladesh Bank (BB) says the latest figures point to dwindling export of manpower and warn that in lieu of drastic measures, the decline in remittance growth will continue.

BB sources attributed the change in remittance trend to Bangladeshi workers being laid off in top destinations in the Arabian Gulf and Asia Pacific countries. Middle Eastern countries employ over 65% of migrant Bangladeshi workers, and last year the number going to Saudi Arabia fell 55.4%, and to Bahrain and the United Arab Emirates about 28% each, while further west 46.7% fewer went to Libya.

Overall, the number of workers heading from Bangladesh to other countries dropped more than 20% to 376,327 in calendar 2010 compared with 475,278 in 2009, even as the number of female workers sent overseas increased 11%, according to the Bureau of Manpower, Employment and Training (BMET). As many as 875,055 workers were sent abroad in 2008.

In Southeast Asia, Malaysia will send back some 350,000 Bangladeshi expatriates for overstaying or working without valid visa, Bangladesh expatriates' welfare and overseas employment minister Khandaker Mosharraf Hossain, announced on January 4 this year. The number of workers sent to Malaysia had already dropped 93.5% in 2010 against 2009, according to BMET. Across the border in Singapore, 10.33% fewer Bangladeshi workers were employed last year.

The central bank in Dhaka recommended in its year-ending remittances statement in 2010 that the government explore "new markets for Bangladeshi workers as the existing markets, especially the Middle East, were reluctant to take more workers from the country".

But why this sudden fall?

The thousand or so recruiting agencies involved in moving workers overseas pin the blame on the government and its embassies for failing to identify potential markets and work projects. At a January 3 press conference titled "Deadlock in the manpower export sector", the Bangladesh Association of International Recruiting Agencies (BAIRA) said the state-owned international recruitment and training agencies, Bangladesh Overseas Employment Services Ltd (BOESL) and BMET, had failed to accomplish their respective assignments of channeling manpower with jobs in foreign countries, training and sending manpower abroad.

It added, "We, about 1,100 recruiting agencies, are passing days in uncertainty as during the last three years, Bangladesh has lost a large chunk of job markets in Saudi Arabia, Malaysia, Oman and other countries."

The present government, after assuming office in 2009, promised to send workers to new destinations in Europe, North America and other continents, but "we are yet to see significant progress on these promises as the manpower export continues to fall," BAIRA secretary general Ali Haider Chowdhury told Asia Times Online.

Chowdhury, who also speculated that recent labor unrest in Middle East countries played a role in migrant worker decline, said improper policy implementation and inefficient crisis management by the overseas employment ministry were important factors.

A government agency points the finger elsewhere, not least at the complaining recruiting agents, with the Directorate General of Forces Intelligence (DGFI) singling them out in several of the 15 reasons it gives for the manpower export trend, according to Bangladeshi English-language newspaper The Independent, when on December 30 it cited a copy it had obtained of a DGFI report.

While pointing out that the country was producing too few skilled and professional personnel, the intelligence report accused some private recruiting agencies of profit grabbing and fraudulent behavior. Officialdom was also criticized, the report citing embassies that failed to find prospective projects where Bangladeshi workers could be sent, irresponsible bureaucrats, unethical government officials, and flaws in government foreign policy.

It also costs more to send a worker from Bangladesh overseas than it does to send workers from other South Asian countries to the same destinations, parliamentarians were told on January 2.

Negative propaganda by opposition party-members of the Bangladesh Nationalist Party (BNP) and the Jamaat-e-Islami Bangladesh, affected manpower export to most Muslim countries, especially to Saudi Arabia, the report said, while bad impressions were being created by Rohingyas who travel to foreign countries with fake Bangladeshi passports. The ethnic group, based in southwest Myanmar, speaks a language similar to Bangladeshis across the border.

Some of the DGFI claims were quickly dismissed. Tasneem Siddiqui, a professor of political science and chairperson of Refugee and Migratory Movement Research Unit (RMMRU) of Dhaka University, waived away the allegations of political propaganda.

"Political propaganda does not have the capacity to affect the export rate to such an extent. More than this, negative reports about Bangladeshi workers stealing items in foreign lands, labor unrest and so on have struck the export rate," Siddiqui told Asia Times Online.

A more effective government approach to tackling the problem would include PR campaigns "to build a stronger image for Bangladeshi workers", while worker training also had to be improved.

"Positive PR campaigns could have been initiated by the government, which needs to perceive this sector from a business angle as it is contributing so largely to the economy," Siddiqui said. "A $10 billion industry like the human resources export sector needs not just a bureaucratic ministry handling it, but an entire business system along with well thought-out marketing schemes.

"The 38 public technical training centers in Bangladesh are highly redundant in the training of migrant workers. Foreign trainers can be hired to train the trainers at these centers," she said, urging more coordination between the education, foreign and overseas employment ministries in this regard.

Most Bangladeshis working overseas are unskilled or semi-skilled, and "it's about time we developed skilled workforces who can satisfy the foreign countries' demands, channeling in more foreign currency [to Bangladesh]," Kholiquzzaman Ahmad said.

"Our exported workforce has remained unskilled and semi-skilled for the last two decades." Sri Lanka and Nepal "send a smaller population abroad compared to our exported population. However, they still enjoy higher remittances as the workers they send are being paid twice or thrice the salaries due to their sophisticated skills," he said.

Bakht of IDS said that "in the long run, the government must improve the language and technical skills of our workers."

The present government has taken steps to increase the export of workers, including introduction of BMET smart cards, ratification of the UN Convention 1990 on migrant workers' rights, and establishing the Prabashi Kalyan Bank (or Workers' Welfare Bank), which will make it easier for overseas workers to remit money home and obtain loans. The bank is expected to start operations this year.

Still, more needed to be done through concrete objectives, Saddiqui said.

Last month, the Labour and Overseas Employment Ministry published a statement that did not go well with the BAIRA members, following BAIRA's news conference on January 3, claiming that after meeting with the respective authorities of different countries, it came to know that the "Bangladeshi people were paying higher cost for getting overseas jobs but not earning salaries to the same extent."

The ministry said a team from Malaysia would be visiting Dhaka to "sort out an effective, fair and transparent way" for taking skilled workers from Bangladesh. The Malaysian team duly visited Dhaka by mid-January.

The government agencies claim not to be involved as a business entity but seek "help the people through their efforts". The BMET and government-formed company BOESL train and send workers on foreign government projects. If the Malaysian government, for example, is planning a large housing project, it might require thousands of semi-skilled workers at a lower cost if it hired Malaysian workers. Malaysian would then ask for tender applications for the project from other governments. If Bangladesh's offer is acceptable, the government in Dhaka will ask the BMET to train the workers according to the skills required and send them.

The BMET is also assigned to receive workers' complaints.

BOESL says it is "dedicated to ensure supply of quality workers within [the] shortest time span and minimum migration. Profit making is not motto of the company. The main purpose of creating this company is to provide honest, efficient and quick services to the valued foreign employers in the matter of recruitment and deployment of manpower."

While this is the case, the BMET and BOESL only sent around 700 people abroad in 2009 when the private recruiting agencies and individuals sent around 474,628 people. Again in 2010, the BMET did not send anyone and the BOESL sent only 1,941 when the private agencies and individuals sent around 289,963 workers.

There have been allegations that the BMET and BOESL have not been working as they should but are being bribed by the private recruiting agencies. Even then, there are doubts about the recruiting agencies' numbers, with claims that these are under-reported to evade taxes.

The government has "fixed 84,000 takas [US$1,160] for sending people to Malaysia, including all costs and one-way air fare". However, the statement added, migrant workers are currently being charged three to four times this amount by private recruiting agencies. These expenses are taken out of the workers' wallets by the agencies in the name of training, passport issuance expenses, immigration taxes and so forth. As the workers are mostly ignorant of the actual expenses, they rely blindly on what the private recruiting agencies are telling them.

Contracted workers, often poorly educated rural people many of whom sell their small holdings to finance the initial fees, are paid from 9,000 to 2,000 takas per month. Although told they will be provided food and expenses during their stay in the foreign countries, they often find once there that this is not the case and have to spend most of their income on their own upkeep, leaving little to send home although this was their motivation for going overseas in the first place.

The ministry statement concluded that despite repeated requests to BAIRA for proposing a reasonable fee, it had received no response from the trade body after two years.

BAIRA secretary general Ali Haider Chowdhury, asked about the migration cost, told Asia Times Online, "the government needs to be more realistic about the sector. The allegations of higher costs are imaginary as there will be costs where there is trade." These also varied from one foreign destination to the other.

"We agree with notions that migration costs should be reduced and skilled workers should be sent. However, the government needs to make decisions after evaluating the demand and supply arrangements properly." The visit and evaluation by the Malaysian team was a "positive development", but "it will take some time for this process to reach a fruitful stage," he said.

Dhaka University's Siddiqui warned that by trying to reduce the migration costs, "the government seems to be in a conflict with the private recruiting agencies. While reduction in workers' exploitation and migration costs can help the overall situation, the private sector can be provided with incentives to increase their accountability as the private recruiting agencies are the biggest entrepreneurs in this sector."

Syed Tashfin Chowdhury is a senior staff writer at New Age in Dhaka.

http://www.atimes.com/atimes/South_Asia/MB15Df03.html

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