Transfer is the non-commercial transfer of money made by a worker working abroad to their home country.

According to the International Monetary Fund (IMF), a remittance occurs when a person going abroad for at least a year returns part of their income to their home country and the money is recorded in a balance. different payments.

Remittances are an important source of finance for developing countries. Remittances to Bangladesh hit an all-time high.

This is a reflection of the good economic performance of non-resident Bangladeshis.

It is also blowing a positive wind for the economy of Bangladesh, especially in the situation of the corona pandemic.

Data from the Bangladesh Bank shows that remittances in fiscal year 2020-2021 hit a record high of $ 24.77 billion.

In fiscal year 2019-20, it stood at just over $ 18 billion. This is a 36% increase year over year.

Experts believe that the current trend of remittances in the country is also expected to continue in the future.

The high influx of remittances into the country did not happen overnight. There are several causes behind this.

First, the government has taken measures such as researching new overseas labor markets, training to meet current global demand, the availability of expatriate loans, and streamlining legal channels to enable non-Bangladeshis. residents to legally send money home.

These actions have played an important role in increasing the supply of remittances.

According to government data, despite the Covid-19 pandemic, more than 217,000 workers left abroad in 2020.

New labor market destinations in Eastern European countries such as Poland, Albania and Romania, among others, are in place.

In Asia, Uzbekistan, Kazakhstan, Vietnam and Cambodia are now labor market destinations for Bangladesh.

The government is well aware of the unemployed women workers in the country.

As a result, due to the timing of the training of the workers, nearly 22,000 women workers left abroad in 2020.

In addition, the Bureau of Manpower, Employment and Training (BMET) modernized its activities, which enabled services such as maintaining a database of workers, managing immigration and management of employment services, among others.

Overseeing the activities of recruitment agencies gave potential job seekers confidence to go abroad and change their lifestyle.

Second, the pandemic has changed people’s spending behavior.

Many send money home for fear of losing their jobs.

Many more are sending money to contain family hardships amid the plight of the pandemic.

In addition, every year, new non-resident Bangladeshis are added to the labor market and help raise the country’s remittances.

The impact of remittances is directly linked to the economy. It is considered an important and stable source of income.

Impacts cause chain reactions and these reactions can be both positive and negative.

Benefits

By indicating positive impacts, first of all, remittances help build a strong and healthy reserve of a country.

This money can be spent for development purposes.

Second, money entering the country through legal channels helps banks increase their funds, which in turn increases their lending capacity.

Remittances add to national savings.

Third, if the income generated by remittances is used productively, it can generate economic activity of the country, thus contributing to the gross domestic product.

Fourth, remittances can increase domestic consumption and reduce poverty, which benefits the economy.

However, remittances also have negative effects.

The inconvenients

First, in Bangladesh most of the money is spent for non-productive purposes such as consumption.

Second, the money received from abroad is often used to build infrastructure according to the needs of the family.

However, more could have been earned if the money had been used in business.

Third, the absence of government decisions about the appropriate use of remittances may result in a low multiplier effect.

Fourth, higher migration means more skilled workers are leaving the country to find better opportunities. It can affect the overall economic situation of the country.

Experts welcome the high influx of remittances, especially in this pandemic situation.

The Asian Development Bank, in its July Asia Development Outlook supplement, said Bangladesh’s economic recovery will continue in the near future on the basis of exports and remittances.

Now is the time for the government to take the necessary steps to use this money for profit.

Vigilance must also be in place to keep the trend in remittances high.

The author is a freelance writer