Seventeen years ago, at the turn of the millennium, the Dhanua village of Shibpur upazila in Narshingdi district had only two brick buildings - one belonged to the Moulavi Bari and another to the Miah Bari - two of the most well known houses in the village. The rest were made out of corrugated tin, bamboo and straw.
Now, in 2017, nearly 70 percent of the village houses are made of brick. Construction work is going on for roughly another 10 percent. And almost all of these households have at least one family member working in a Middle Eastern country. Some households even have members working in African countries like Swaziland and Kenya.
Thanks to the migrant workers who have left their near and dear ones and taken on jobs as construction workers, cleaners, plumbers, minicab drivers, cooks, helping hands and in other similar professions, these households are able to receive a monthly money transfer - tiny sums by developed country standards, but life transforming for a rural Bangladeshi family.
The life changers
Dhanua is just one of over 87,310 villages of Bangladesh where remittance money has transformed the lives of people. While export earning from RMG has put urban Bangladesh on the track to reaching middle income status, the remittance money injected into rural Bangladesh is making sure the upwards facing ladder stands on a firm structure, not on a bubble.
Most importantly, this remittance money is elevating a huge portion of the rural population from its subsistence state and giving them the taste of a ‘near-standard’ life with increased purchasing capacities.
With the money these workers send back home, households are enlarging their land holdings, starting to grow market crops and hiring others to work in their fields. Some of them are erecting new markets, bringing goods from the towns and selling products that just a decade ago couldn’t be found in even the bigger markets of the Sadar Upazila.
“I found large Golda Chingri (lobster) in the village market of Dhanua and I saw all of them being sold off in front of my eyes only within only 20 to 30 minutes,” said Rashid Uz Zaman, a civil engineer now living in the capital.
Zaman was born in the famed Dhanua Moulavi Bari and spent his childhood in the village before moving to Dhaka. But because of its proximity, he visits his ancestral home every month.
“I have been an observer of huge changes in my own village. Just 15 years ago, when Moulavi Bari used to distribute Zakaat among the poor, the line used to be hundred metres long. Now it has reduced down to one third of its earlier length.”
That’s not all. The mosque established by Moulavi Bari was the lone mosque in the village for the last four decades. Now Dhanua has four mosques. “Every time, I come to village after one or two months, I see new buildings and new businesses. I am now being served with instant noodles as afternoon snacks in households which earlier had problem of coming up with decent foods three time a day. These inspiring changes are taking place because of remittance money.”
The booster for economy
Since 1976, remittance earnings have been playing a significant role in the economic development of Bangladesh. The role of inward remittance on the economy has, in fact, been gradually increasing during the last two decades.
It is now considered a major influencing factor over the economic policy-making process of our country, since the increasing flow of remittance has been reducing Bangladesh's external aid dependency.
Burdened with overpopulation, Bangladesh has one very important comparative advantage over many other countries in the global market – a huge supply of manpower, which leads to a significant amount of foreign exchange through remittances.
In the outgoing fiscal year, the share of remittances in gross domestic product was 6.7 percent. Remittances have reduced the current account balance and stabilised the balance of payments of the country.
Dr Fahmida Khatun, executive director of Center for Policy Dialogue (CPD), said that migration of labour yields benefits in both recipient and sending countries. Recipient countries can get employment in jobs that locals traditionally do not want to do. For sending countries, movement of people can provide high employment opportunities and contribute to their social and economic development. The income earned by migrants increases welfare of migrant families and strengthens the national economy, she said.
However, development researcher Sajjad Hossain said that remittance earnings cannot be considered a substitute for FDI, but the impact of remittance on poverty reduction in developing countries is notable. The effect of remittance earnings on per capita income also has a direct positive impact on the welfare of households.
“As a poverty alleviating tool, the importance of inward remittances is widely recognised and requires little reiteration. Since the most direct impact of manpower export is on remittance, all policies or initiatives undertaken for furthering manpower export need to be strengthened for increasing the remittance flow.”