Bangladesh’s 10 million international migrant workers have been contributing to the country’s economic development while ensuring welfare of millions who depend on them.
In return for short-term employment contracts, strong remittances inflows propelled Bangladesh to become the world’s 11th largest remittance-recipient economy; together with Ready-Made Garments (RMG) exports, the inflows form the country’s key economic pillars. International temporary labour migration also helped reduce poverty in rural Bangladesh. From 2000 to 2016, as per World Bank estimates, poverty fell faster in migrant-sending districts: for each additional 0.1% of a district’s population migrating internationally, poverty in that district fell by 1.7%.
With Covid-19 pandemic, however, many workers were laid off or furloughed without compensation. They are now homebound as the global economy is grappling with the crisis. Uncertainty about their remigration is looming large. At the same time, they face stigma and discrimination given limited scope for social distancing and access to healthcare services.
Returnees require access to health services, social protection and quality jobs to cope with the fallouts. At the same time, Bangladesh needs to explore new labour markets to minimize disruptions to remittance inflows and expand options for Bangladeshi workers. But to what extent is the country prepared for taking on these challenges?
Economic uncertainty in host countries aggravated by pandemic
Bangladesh already faced tight labour market conditions (home and abroad) prior to the crisis.
On the home front, it had been experiencing slow domestic job growth since 2010 as per World Bank estimates. Uneven access to quality jobs remains a key challenge and about 85% of total workforce is informally employed. International migration became a key employment option in this context and over 400,000 workers—mostly rural and low-skilled—sought overseas employment annually. Pull factors include strong demand from major destinations (mostly from Gulf region) and continued large wage differentials between domestic and overseas markets. While males make up most migrant workers, female migrants constituted 12% of those who left for work abroad in 2017 and this figure marginally increased to 13.85% in 2018.
Job seekers, however, were facing shrinking opportunities abroad in recent years. As per IMF, major host countries like Saudi Arabia, UAE and Kuwait were reeling from the 2014-16 oil price collapse with modest recovery prospects in 2020. On the other hand, a push for workforce nationalization programmes in Gulf Cooperation Council (GCC) economies like Saudi Arabia contributed to layoffs of Bangladeshi migrant workers. Increased immigration drives also saw mass deportation of undocumented workers.
Covid-19 jolted recovery prospects in the region. IMF forecasts GCC economies to contract by 7.6% in 2020. The pandemic’s fallouts including collapse in OPEC+ negotiations and ensuing oil price war (led by Saudi Arabia) further weakened the oil-dependent economies as these saw oil prices crash to an 18-year low. While OPEC+ group called truce to curb oil production, it has not helped revive prices meaningfully.
The situation deeply impacts remittances inflows to Bangladesh and foreign employment. In the recently concluded FY20, remittances inflows were in a tumult in the last quarter given Covid-