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Monday, April 6, 2009

Remittance growth slows

Remittance inflow to Bangladesh in March recorded $881million, but in terms of growth rate it was only 9 percent, the lowest in the last nine months because of the ongoing global recession.

A 13-53 percent growth in remittance was registered in the first eight months (July-February) of this fiscal year. The February remittance reached $784.47 million, while the January figure was $859 million.

The March record also helped boost up foreign currency reserve to $6.03billion as of yesterday.

During July-March, the remittance inflow stood at $7029.51million against $5649.23 million in the same period a year earlier.

The central bank data shows a 27 percent rise in average remittance inflow until February, which came down to 24 percent in March.

Bangladesh Bank officials attributed the March record to the enhanced amount of money the expatriates sent home on the eve of boro harvest.

Meanwhile, the ADB's Quarterly Economic Update on Bangladesh released on Monday outlined the country's shrinking labour market.

The annual growth in the number of workers leaving Bangladesh for overseas jobs slowed sharply to 5.1 percent in 2008 compared to 118.2 percent in 2007.

Among the major destinations for overseas employment, new jobs for Bangladeshi workers in Saudi Arabia fell by 35.3 percent in 2008. Kuwait has reduced hiring Bangladeshi workers since late 2006. In 2008 new jobs for Bangladeshi workers in Kuwait fell by 92.4 percent and in Bahrain by 19.8 percent.

New job opportunities also declined in 2008 in Malaysia by 51.8 percent and in Brunei by 11.1 percent on economic downturn.

The recession is also badly affecting new Bangladeshi job seekers in Europe. Jobs fell by 36.7 percent in Italy and 2.1 percent in the UK in 2008.

Job opportunities however grew by 202.6 percent in Oman, 85.2 percent in the UAE, 68.9 percent in Qatar and 47.6 percent in Singapore.

The central bank officials' forecast indicates a lower remittance inflow in the next few months as a significant number of workers returned home.

According to the latest revisions by the World Bank, India, China and Mexico retain their position as the top recipients of remittances among developing countries. The top 10 recipients list also includes Philippines, Poland, Nigeria, Romania, Egypt, Bangladesh and Pakistan.

Meanwhile, Finance Minister AMA Muhith said a big budgetary allocation for subsidies is likely in the 2009-10 financial year when suggestions were made by some chiefs of parliamentary bodies yesterday to offer incentives for remitters and farmers.

The chairmen of all standing committees on different ministries, except the ones belonging to BNP, joined a pre-budget discussion at the National Economic Council (NEC). Muhith chaired the meeting.

If any support is extended to anybody tackling the world recession, this incentive should be provided for the expatriates and the farmers in the next budget, the committee chairmen said, pointing to the fact that farmers and expatriates are contributing most to the country's GDP growth.

They also advised the government to use the growers' houses as silos for food in absence of adequate spaces in government silos and extend price support to rice and wheat.

In the pre-budget discussion, they put emphasis on political stability to keep the economy sound on the back of global crisis.

“We have suggested raising subsidies on both input and output of rice and wheat," Rashed Khan Menon MP, who raised the demand for stimulus package for common people, including farmers and expatriates, told reporters after the meeting with the finance minister.

Menon also said, "Those who are sending money home should be given some incentive price to their dollars over the market price.”

Anisul Islam Mahmud, a lawmaker from Jatiya Party, said, "We did not suggest introduction of dual exchange rate. We said the expatriates could be given Tk 0.50 more than market price as incentive on dollar price."

The Daily Star



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