Monday, May 07, 2018

Migration and Bangladesh

Promoting both external and internal migration in Bangladesh is alleviating poverty for those who stay behind in two distinct ways. External migration, particularly short-term, promotes economic development through remittance flows, while internal migration, especially rural to urban, encourages economic self-sufficiency for farmers who remain at home by raising agricultural wages. Similarly to international migrants, internal migrants who leave the countryside for the city are contributing to wage growth in their home villages. Households who lose a worker to internal migration also decrease the available labor in their village as a whole. Basic economic theory states that upward pressure on wages should result. 

Moving abroad for better opportunities has been a reliable source of income for Bangladeshi migrants and their families for decades. Recent surveys have shown that short-term international migrant (STIM) households have higher living standards than those of non-migrants. In 2013, non-migrant households living below the poverty line in Bangladesh was 27 percent higher than international migrant households.
Until recently, remittances have been on a steady rise. In the last 15 years, remittances have risen from roughly $2 billion in 2001 to more than $15 billion in 2015. Falling for a second consecutive year, however, remittances to developing countries have been on a downward trend as of late. If this recent decline in remittances were to continue, these indirect employment and wage benefits might diminish as well. Although likely to pick up again in 2017, the temporary drop in money sent home has given rise to new ideas on tackling rural poverty.
The number of Bangladeshi workers heading abroad for employment has also grown substantially over a similar period. More than 750,000 workers from Bangladesh migrated overseas in search of more consistent, better-paid work in 2016. That represents a 36 percent rise in international migration for Bangladeshi workers from the previous year. Although remittances were down substantially in 2017, money sent home from Bangladeshi workers, those from the Gulf States in particular, still remains a fundamental source for reducing poverty through migration. In 2013, an average STIM household received more than $3,100 from external migrant remittances.
International remittances however also have an indirect effect on the migrant’s native economy. Even non-migrant households in areas of extensive migration tend to see increased local demand from the inflow of remittances. External remittances, therefore, create an opportunity for workers in the form of employment and rising wages.

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