Dynamics of remittance practices and development: Bangladeshi overseas migrants

Abstract

Remittances from migrant workers play a significant role in keeping the economy of Bangladesh vibrant, adding around six per cent to the country's GDP and helping to maintain the balance of payments. This article examines remittance flows from Hong Kong and Malaysia to Bangladesh; the dynamics of remittance practices; and the impact on the well-being of migrant families. Data were collected from 126 labour migrants (56 in Hong Kong and 70 in Malaysia) between November 2004 and October 2006. The article presents empirical data showing that while remittances are significant component of the Bangladeshi economy, a considerable amount goes to ‘unproductive’ schemes. Hence remittances at the micro level that do not significantly contribute to increasing household capacities fail to bring about the anticipated sustainable development at the macro level.

La dynamique des pratiques d'envoi de fonds et le développement : migrants bangladais à l'étranger

Les envois de fonds par les travailleurs migrants jouent un rôle considérable dans le maintien du dynamisme de l'économie du Bangladesh, car ils comptent pour environ six pour cent du PIB du pays et contribuent à maintenir la balance des paiements. Cet article examine les transferts d'argent de Hong Kong et de Malaisie vers le Bangladesh, la dynamique des pratiques d'envois de fonds et l'impact sur le bien-être des familles migrantes. Des données ont été recueillies parmi 126 ouvriers (56 à Hong Kong et 70 en Malaisie) entre novembre 2004 et octobre 2006. Cet article présente des données empiriques qui montrent que, si les envois de fonds constituent effectivement un élément considérable de l'économie bangladaise, une quantité importante va vers des programmes « non productifs ». Ainsi, les envois de fonds au niveau micro qui n'apportent pas une contribution importante à l'accroissement des capacités des ménages ne donnent pas lieu au développement durable prévu au niveau macro.

Dinâmicas de práticas de remessa e desenvolvimento: imigrantes bengaleses

As remessas feitas por trabalhadores imigrantes desempenham um papel significativo em manter a economia de Bangladesh vibrante, adicionando cerca de seis por cento do PIB do país e ajudando a manter o balanço de pagamentos. Este artigo examina os fluxos de remessa de Hong Kong e Malásia para Bangladesh, as dinâmicas das práticas de remessa e o impacto sobre o bem-estar das famílias de imigrantes. Os dados foram coletados de 126 trabalhadores imigrantes (56 em Hong Kong e 70 na Malásia) entre novembro de 2004 e outubro de 2006. O artigo apresenta dados empíricos mostrando que embora as remessas sejam um componente significativo da economia de Bangladesh, um montante considerável vai para esquemas “improdutivos”. Assim, as remessas no nível micro que não contribuem significativamente para melhorar as condições da família, não conseguem promover o desenvolvimento sustentável previsto no nível macro.

La dinámica de las remesas y el desarrollo: los migrantes de Bangladesh en el extranjero

Las remesas de los trabajadores migrantes constituyen una parte importante de la economía de Bangladesh ya que representan el seis por ciento del PIB del país y contribuyen a mantener el equilibrio de la balanza de pagos. Este ensayo analiza los flujos de remesas de Hong Kong y Malasia hacia Bangladesh, la dinámica de cómo se utilizan las remesas y su impacto en el bienestar de las familias de los migrantes. Se recopilaron estadísticas de 126 trabajadores migrantes (56 en Hong Kong y 70 en Malasia) entre noviembre de 2004 y octubre de 2006. Los datos empíricos que presenta el ensayo demuestran que, si bien las remesas son un componente significativo de la economía de Bangladesh, una parte considerable se destina a actividades “improductivas”. Por lo tanto, las remesas a nivel micro que no contribuyen de manera significativa a mejorar las condiciones de los hogares no aportan al desarrollo sustentable a nivel macro que sería deseable.

Keywords:

• Globalisation
• Labour and livelihoods
• East Asia
• South Asia

Notes

One crore is 10 million taka.

The HKRs have hourly work, which they obtain by waiting at designated spots where those seeking labourers go to hire them.

An amount offered spontaneously in addition to the fixed salary/wage if the work is satisfactory.

Conversion at the June 2006 rate.

HKRs have to go to China to get their visas extended because they are given only a two-week permit on arrival, which they are not permitted to extend while they are resident in Hong Kong.

More than 500,000 women work in HK as domestic helpers. This made it easy to find girlfriends for romantic relationships, according to the male respondents.

To test the significance, Hong Kong Dollars and Malay Ringgit were converted into Bangladesh Taka (BDT). 1 HK$ = 9.50 BDT and 1RM = 16 BDT, as of June 2008.

The study defined consumption as buying food and clothes. Consumption has normally been considered unproductive use. However, some researchers argue that consumption contributes to the human development therefore is a productive use. Many of the respondents disagreed with this argument as they claim that hard-earned money is sent for future investment, not for consumption. I share their view that this should be considered as unproductive use.

The slaughtering of cows during the Muslim festivals of Eid is a large expenditure.

Rural households tend to consume more domestically produced goods and thus generate a higher multiplier effect.

Additional information

Notes on contributors

A. K.M. Ahsan Ullah

A.K.M. Ahsan Ullah is at the Centre for Migration and Refugee Studies at the American University in Cairo