As Bangladesh recovers from the economic fallout of the COVID-19 pandemic, the number of migrant workers heading abroad has surged to record levels. However, contrary to expectations, remittance inflows from major labor markets have declined significantly, raising concerns among policymakers and economists.
According to data from Bangladesh Bank, a total of 874,739 Bangladeshi workers migrated overseas for employment between January and September this year. The majority of them traveled to Saudi Arabia, followed by the United Arab Emirates (UAE), Oman, Qatar, Kuwait, and Singapore.
Despite this remarkable rise in outbound migration, remittance inflows from these key destinations have dropped sharply. In the fiscal year 2021–22, remittances from Saudi Arabia — Bangladesh’s largest labor market — declined by 21 percent. The downward trend has continued into the current fiscal year, with a nearly 30 percent drop recorded during the first three months (July–September).
This decline is particularly striking given that over 513,653 Bangladeshi workers migrated to Saudi Arabia by September this year, compared to 457,227 in 2021.
Other Middle Eastern countries have shown similar trends. Remittances from the UAE fell by 15 percent, while Kuwait, Oman, and Qatar recorded declines of 10.43 percent, 41.56 percent, and 7.15 percent respectively in the last fiscal year. Singapore, another key labor market, witnessed a drop of over 38 percent in remittance inflows.
Monthly figures further highlight the decline. In September, remittances from the UAE dropped to $178.3 million, down from $300 million in August. Similarly, inflows from Oman fell to $40 million in September, compared to nearly $80 million in July.
This is despite continued migration to these countries. In 2022 alone, 135,481 workers went to Oman, 83,674 to the UAE, 17,204 to Qatar, 13,599 to Kuwait, and 48,225 to Singapore.
The discrepancy between rising migration and falling remittance inflows has sparked widespread debate. Experts suggest that migrant workers are still sending money home, but increasingly through informal channels such as hundi, rather than official banking systems.
Economists argue that volatility in exchange rates and the widening gap between official and unofficial dollar rates have made hundi transactions more attractive. While these informal transfers benefit recipient families, they deprive the country of valuable foreign currency reserves.
As Bangladesh grapples with declining remittance inflows amid rising overseas employment, policymakers face mounting pressure to stabilize exchange rates and incentivize the use of formal banking channels to ensure sustainable economic growth.
