Multisectoral Impacts of Increasing Remittances Deserve a thorough study

Md. Abdul Jabbar

THE Bangladesh economy has got a major turn for the positive, through strengthening of efforts for inward foreign remittance mobilisation. In this process, there is now a notable shifting of remittance from informal channel to the formal one. This year as much as more than US $ 7.00 billion is expected to be received by the country where it was about US $ 6.50 billion during the last year. Under the joint attempts, both the private and public sector financial institutions are making their efforts and looking for ways to open the easy path for entry of remittance funds to the country.

Such an increasing volume of remittances indicates the potential role of the policy-makers to adopt the required policy options. The remittance-attracting policy options should also include:

i) the study of impact of remittance funds on poverty alleviation, development indicators, social dynamics, and opportunities gained and lost in the recipient countries;

ii) addressing the concerns about increasing migration and its impact upon the families and societies based on scientific propositions;

iii) the "push" of population, unemployment and evaluating crisis pressures in less developing countries like us;

iv) strengthening or weakening of efforts for reducing income inequalities;

v) non-monetary contributions, including knowledge-sharing, investments in human capital, and travel;

vi) a research study for examining the dynamics of informal money transfer operations, particularly the use of the 'hawala' systems which combine low price and efficiency but may serve the needs of illegal operations or terrorists, in addition to the needs of families and communities;

vii) regulatory requirements and their impacts on small businesses; and

viii) migration, return and remittances: selected case studies etc.

New technologies allow remittance service-providers to reduce direct transaction costs and open new channels, thus, enhancing convenience for remitters and improving levels of transparency and accountability for regulators and policy-makers. [Read more]