A report of the International Organization for Migration (IOM) finds that lack of skills and low levels of financial literacy make Bangladeshi migrant workers vulnerable abroad.
The UN agency for migration also urges communities to support the “reintegration and combat stigmatization” of returning migrant workers to Bangladesh.
The IOM released the report on ‘Migration, Family Remittances, Assets and Skills Categories in Bangladesh’ on Tuesday on the International Day of Family Remittances.
It comes at a time when migrant workers are facing unprecedented crisis due to coronavirus pandemic.
Due to the economic and labour crisis created by the pandemic, hundreds of thousands of migrant workers are expected to return by the end of the year.
Recession-related job losses will impact not only remittance-receiving households but their extended communities, the IOM said.
In 2019, $18.32 billion was remitted to Bangladesh, the third highest recipient of remittance in South Asia.
According to the Bureau of Manpower, Employment and Training (BMET), in 2019 alone, over 700,000 migrant workers left the country in search of employment abroad and over 73 percent of remittances were sent from Gulf Cooperation Council countries.
Remittance inflows to Bangladesh directly impacts socio-economic development and act as a lifeline to vulnerable communities.
The report also includes findings from a 2019 survey of 1,000 remittance-dependent households and qualitative discussions with key stakeholders.
The findings showed that Bangladeshi migrant workers and remittance senders were overwhelmingly men (98 percent), about 12 percent of migrant workers did not attend school at all and nearly 80 per cent did not continue studying after secondary school.
The survey found that higher-skilled workers send more money than the less skilled migrants and that an increase in skills increased the amount remitted by up to $255 per month between 2009 and 2019.
Higher skilled migrants were employed in better paid jobs and were more likely to send higher remittances for longer periods than lower skilled migrant workers.
Of the surveyed migrant workers, half worked as employees for a firm or company (49 percent) and nearly one-quarter (26 percent) worked as labourers – daily wage (14 percent), part time (12 percent), and construction (15 percent).
The economic return on migration is lower in Bangladesh than countries with a skilled-migrant workforce because the amount that unskilled and lower-skilled workers remit is much lower than that of skilled workers.
The report indicated that Dhaka and Chattogram divisions had the highest concentration of remittance-receiving households (76 percent) and a total of 65 percent of those households were headed by women who were likely to be unemployed and who generally invested remittance in non-income generating activities.
The survey showed that remittances were generally used to meet short-term needs and were rarely used to diversify assets or build financial resilience, which further increased the households’ dependence on remittances.
Low financial literacy of the migrants and their families placed them in a precarious situation in terms of income stability, remittance management, and assets building.
The report recommends that, firstly, there is need to invest in gender-responsive skills development and build the financial literacy and remittance management capacity of households.
Secondly, there should be investment in education and skills upgrade so that lower skilled migrant workers can earn more and break the cycle of debt.
Thirdly, measures should be taken to improve debt management and formalise savings to mitigate vulnerability and support a path towards financial independence.
Fourthly, policies that increase women’s financial inclusion should be initiated to make a positive impact on wealth generation and economic development at all levels, considering economies of scale and sustainable strategies.
Lastly, the study recommends the building of partnerships for offering gender-responsive financial education and advice to migrants and remittance recipients.
This will address differentiated demands for financial products between men and women migrants and remittance recipients.
“Now more than ever we need to focus on supporting remittance-dependent communities who are impacted by the recession,” Giorgi Gigauri, Chief of Mission, IOM Bangladesh, said.
“We need to support the government to prioritize skills development of migrant workers so they can increase remittance flow to Bangladesh, and we also need to focus on providing financial literacy training, particularly to women, to improve productive investment of remittances and to build the resilience and financial independence of remittance-reliant households.”
