Remittance and Its Economic Impacts on Bangladesh

8/13/2019 Remittance and Its Economic Impacts on Bangladesh

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REMITTANCEAND ITSECONOMIC IMPACT ON

BANGLADESH


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REMITTANCE

Money sent by migrant workers from foreigncountries to their former homes.

it helps in balancing balance of payments,increasing foreign exchange reserves, enhancing

national savings and increasing velocity of money. second largest sector of foreign exchange earning

after the garments sector in Bangladesh.

contributing around 35% of export earning.

Bangladesh is the seventh largest economy ofremittance receiver in FY 2010-11.


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REMITTANCE SENDING SYSTEM

Two types of system

#Formal system

(western union, demand draft, traveler check,mobile remittance etc.)

#Informal system

(Hundi)


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TRENDS OF REITTANCE FLOW IN BANGLADESH

The receipts of remittances from Bangladeshi migrants

during FY 2010-11 has stood at around USD 11,650.30

million or Tk. 82,992.89crore that is 10.54 percent of

GDP.IN 2011-12 the remittance flow is 89,853.16crore taka

Even in recession all over the world Bangladesh still

has a strong flow of remittance.

Bangladesh has received highest remittance In January

that 1.5 billion USD.


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TRENDS OF REITTANCE FLOW IN BANGLADESH


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Country and Region wise Remittance F low in

Bangladesh

2011-2012


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ECONOMIC IMPACT

Remittance and GDP

#IN FY 2010-11of remittance as a percentage of GDP drops

down to 10.54.

# INFY 2011-2012 remittance as a percentage of GDP

drops down To 9.98

Remittance and Inflation#The growth rate of remittance induces that rate of inflation, if

the currency received as remittance is not used in capital goodsrather only used in consumption goods the inflation rate willrise vice versa.


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ECONOMIC IMPACT

Remittance and foreign Reserve.#reserve in FY 2011-12 might reach at USD 12.56 billion


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ECONOMIC IMPACT

Remittance and Exchange Rate.# sufficient flow of remittance helps to control the

exchange rate

Remittance and investment#Helps build up micro-enterprises to reduce poverty

#Help the poor people to make micro-investment

# Enhance economic development


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ECONOMIC IMPACT

Remittance and balance of payment

Trade deficit

Import is larger than export

Compensate the deficit


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LABOR MIGRATION AND FLOW OFREMITTANCE

In FY 2010-11, a total of 0.45 million people have migrated

from the country Drop down due to political unrest in middle east and economic

recession


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PROBLEMS OF REMITTANCE

Inequality

Regional disparities

Increased demand for imported luxury goods

Misuse of remittance

Exploitation by the dalals


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RECOMMENDATION

Provide necessary information to the people aboutthe job opportunity in different foreign countries.

Establish information center

Provide necessary logistic support

Minimize the cost of sending remittance

Influence of the middlemen and their interest shouldbe controlled


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RECOMMENDATION

Remittance sending procedure should be developedto make it secured, quick and effective

remittance sending process should be liberalized sothat irregular emigrants can also send remittance

through regular channels


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FINDINGS

Remittance is the second largest sector of foreign exchangeearning after garments sector

Remittance earning is increasing day by day

There is high probability of supremacy of yearly growth rate ofremittance over that of RMG sector for fiscal years 2015 to2020.

Remittances of Bangladesh (million US$) have negligiblepositive impacts on foreign reserves.

Remittance helps in reducing dependence on foreign assistance

Remittance increases national savings and national inves


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Remittance and Its Economic Impacts on Bangladesh

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