Optimal use of remittance

THE inflow of remittances by millions of Bangladeshis working abroad, which contributed to the foreign exchange reserves now exceeding $33 billion, has robustly propped the interim government since its journey began in August 2024. While financial and macroeconomic policy experts intend to put the credit down to improved formal channels and incentives offered to remitters, a serious matter that is often sidelined is actual benefits gained from this money by migrant workers and their families back home.

It has been experienced that due to a lack of formal education or knowledge of financial management or training in small-scale investment, many families find it difficult to use the hard-earned remittance in sustainable, profitable ventures. The money is spent mostly on erecting not-so-necessary buildings for accommodation with impressive gates, the purchase of automobiles, ornaments, furniture and lavish expenditure in family affairs. Savings do not happen to come to mind for many while exuberance becomes a symbol of distinction from other neighbours. People can identify from a distance whose house is which.

From across the country, 300 members completed the capacity-building training under financial literacy component and received Tk 100,000 each to implement a business initiative in their locality, submitted and approved as selection criteria through a committee, from which they could get a regular income over the years. If needed, they could also add some capital of their own from savings of the remittances that they receive from outside the country. The recipients of such support were very excited and showed their commitment to using the seed money received from the project. Although the result of this asset transfer is yet to be seen, the adviser to the ministry committed that whether supported by development partners or not, the project would continue to be financed by the government. The pledge has kindled hopes among the members of the migrants’ families. The senior secretary to the ministry called on the recipients to religiously use the money for income-generating activities rather than spending it on unnecessary things.

While uninterrupted and handsome remittance inflow is indicative of the soundness of national macroeconomic health, especially in terms of the state capacity for foreign debt payment, it is high time we paused a bit, counting only the bills and ignoring the long-term well-being of the earners. And here lies the importance of making financial literacy available to them and members of their family.

An optimal use of remittances has two meanings: using it at micro and macro levels. For the latter, the state is equipped with agencies, models and modus operandi. But regarding the micro level, the gaping area is obvious as none of relevant players are unified neither is there any single umbrella. They eye each other, keeping at bay who does what and what not. To get rid of this riddle, foreign exchange earners and their families sustainable economic inclusion can be ensured only if the relevant stakeholders sat together, being on board and willing to provide necessary platforms for the left-behind members and relatives of the never-at-rest migrant workers abroad.

The issue is more important than ever before because while we are yet to mindfully decide who to educate migrants’ families in finance, savings and investment so that the expatriates do not end up their whole life working abroad at a high social cost, devoid of family and relatives, the prime time of life spent on earning bread only, countries such as the Philippines have for long been successful in availing diaspora investment even in major infrastructures such as hospitals, schools and bridges.

Md Mukhlesur Rahman Akand is a joint secretary to the expatriates’ welfare and overseas employment ministry.