Beneath The Surface
Remittance and resilience in rural areas
THE seven billion dollar remittance flow into Bangladesh should be seen as a sigh of relief when the economy is caught in a catalogue of economic crises. This amount is roughly 12% of our GDP. Analysts say that our workers from foreign countries sent more money this year to help families faced with price hike. For us particularly, right at the moment, the sauce matters -- not the source. However, foreign exchange flows are not an unmixed blessing, as they might fuel money supply to further inflationary spiral unless properly "sterilized" by the central bank. Assuming that happens, such a big rise in remittance could keep us cool for a while.
Since we are at the moment preparing a report on the state of the rural economy -- based on a Brac-backed household survey in 62 villages -- we shall take our readers to rural remittances. That is, we shall talk on the changes in the size and sources of remittances that rural households tend to receive from their migrated members -- within or outside country.
Remittance as income
Remittances now account for one-fourth of rural household income and roughly the same proportion of rural households have members who have migrated. This compares with about 10% and about 6% respectively in 1988. Thus, during the last two decades, the share of remittance to total household income more than doubled and the share of receivers quadrupled! Admittedly, the average share so estimated could have concealed the fact that only the rich were rewarded with remittances, because, they had the resources to send members outside, especially in foreign countries. But we can show that remittances matter for the poor also, no matter where the money comes from. Thus our survey data show that those who have only homestead land, appear to receive 22% of their household income from remittances, and households with 50 decimals of land derive roughly 18%. This compares with about 3% and 4% respectively in 1988. Quite obviously, the members of these poor households had been helping them from outside and as years rolled, remittances also rose to increase their resilience. The highest share of remittance income (about 30%) applies to households owning 50 decimals to 2.5 acres of land. Thus the rich are getting richer through remittance -- but the poor are also moving fast in the same direction. Destinations and costs
About one-third of the migration is destined for overseas, double the figure in 1988. Migration to another district drastically increased to 53% from 11% during the same period of time. But within district migration is now less than before. Four-fifths of remitted money now comes from abroad compared to two-thirds in 2000 and about half in 1988. Remittance from another district almost halved, and from within district fell. That means, the share of local remittance has been falling overtime and that of foreign has been rising. Cost of migration is now on average Tk 221,212 compared to Tk 121,777 in 2000. However, the cost of migration increases marginally with the level of education of the migrant. Poor to be praised
A very interesting observation is that 44% of the total remittance now comes from members of poor households compared to one-third in 2000 and one-fifth in 1988. Whereas, in 1988, about half of the remittance used to come from members of rich households. Their share had been falling over time to one-third of the remittance flow. It shows that most of the remittance that we are proud of now is contributed by the poor households. But, unhappily, this group faces a barrage of barricades while sending their family members abroad. If Sylhet district could claim a few ministers in the cabinet because of Sylheti contribution to foreign exchange earnings then, we reckon, a few ministers from the poor could also be included in the cabinet for the same reason. Education and occupation
It appears that a higher proportion of educated members are now migrating than before. For example, the share of migrants with no formal education declined from 15% to 6% between 2007 and 2000 while that with primary education is up from 19 to 24% . However, the proportion of migrants with SSC+ education soared from 24% to 40% during the same period of time. A glean on the occupational status shows that more than 60% of the migrants are with jobs, 15% with study, 4% business, and 13% as wage labour. Conclusion
Earlier in this column we tried to argue that increased remittance income could be one of the factors that keep farms away from distress sales of paddy. We could, perhaps, establish that our hypothesis is not far from the field level evidence. In the realm of discussion on remittance in Bangladesh, however, it is often forgotten that the poor rural households have a big contribution in enlarging the size of the cake called "foreign exchange reserves." In fact, their contribution had been rising over time. The government should heavily invest in education and technical training to export human capital overseas. The government should also see that these poor households are faced with fewer constraints while planning to send members abroad. The statistics on rural remittance clearly show that poor households have large enough contribution to GDP in terms of producing food or earning foreign exchange to justify special "rural bias" policies or development programs.
Remittances now account for one-fourth of rural household income and roughly the same proportion of rural households have members who have migrated. This compares with about 10% and about 6% respectively in 1988. Thus, during the last two decades, the share of remittance to total household income more than doubled and the share of receivers quadrupled! Admittedly, the average share so estimated could have concealed the fact that only the rich were rewarded with remittances, because, they had the resources to send members outside, especially in foreign countries. But we can show that remittances matter for the poor also, no matter where the money comes from. Thus our survey data show that those who have only homestead land, appear to receive 22% of their household income from remittances, and households with 50 decimals of land derive roughly 18%. This compares with about 3% and 4% respectively in 1988. Quite obviously, the members of these poor households had been helping them from outside and as years rolled, remittances also rose to increase their resilience. The highest share of remittance income (about 30%) applies to households owning 50 decimals to 2.5 acres of land. Thus the rich are getting richer through remittance -- but the poor are also moving fast in the same direction. Destinations and costs
About one-third of the migration is destined for overseas, double the figure in 1988. Migration to another district drastically increased to 53% from 11% during the same period of time. But within district migration is now less than before. Four-fifths of remitted money now comes from abroad compared to two-thirds in 2000 and about half in 1988. Remittance from another district almost halved, and from within district fell. That means, the share of local remittance has been falling overtime and that of foreign has been rising. Cost of migration is now on average Tk 221,212 compared to Tk 121,777 in 2000. However, the cost of migration increases marginally with the level of education of the migrant. Poor to be praised
A very interesting observation is that 44% of the total remittance now comes from members of poor households compared to one-third in 2000 and one-fifth in 1988. Whereas, in 1988, about half of the remittance used to come from members of rich households. Their share had been falling over time to one-third of the remittance flow. It shows that most of the remittance that we are proud of now is contributed by the poor households. But, unhappily, this group faces a barrage of barricades while sending their family members abroad. If Sylhet district could claim a few ministers in the cabinet because of Sylheti contribution to foreign exchange earnings then, we reckon, a few ministers from the poor could also be included in the cabinet for the same reason. Education and occupation
It appears that a higher proportion of educated members are now migrating than before. For example, the share of migrants with no formal education declined from 15% to 6% between 2007 and 2000 while that with primary education is up from 19 to 24% . However, the proportion of migrants with SSC+ education soared from 24% to 40% during the same period of time. A glean on the occupational status shows that more than 60% of the migrants are with jobs, 15% with study, 4% business, and 13% as wage labour. Conclusion
Earlier in this column we tried to argue that increased remittance income could be one of the factors that keep farms away from distress sales of paddy. We could, perhaps, establish that our hypothesis is not far from the field level evidence. In the realm of discussion on remittance in Bangladesh, however, it is often forgotten that the poor rural households have a big contribution in enlarging the size of the cake called "foreign exchange reserves." In fact, their contribution had been rising over time. The government should heavily invest in education and technical training to export human capital overseas. The government should also see that these poor households are faced with fewer constraints while planning to send members abroad. The statistics on rural remittance clearly show that poor households have large enough contribution to GDP in terms of producing food or earning foreign exchange to justify special "rural bias" policies or development programs.
For all latest news, follow The Daily Star's Google News channel.
Comments