Mass Exodus of Migrant Labor: Mitigation and Reintegration

    LightCastle Analytics Wing
    LightCastle Analytics Wing
    bangladeshi migrant workers

    Employment Generation and the welfare of Labor in Bangladesh is a crucial aspect of its sustainable growth plans. Most employment in Bangladesh is generated by the Agriculture Sector. It contributed 41.1% of the total employment, with Manufacturing and Service Sectors contributing 20.8% and 38% respectively in 2016.[1] An estimated 85% of total employment in Bangladesh is in the informal sector.[2] 

    The Bangladesh Labor Market has suffered greatly in the wake of the coronavirus pandemic. Bangladesh Institute of Development Studies (BIDS) carried out a survey earlier this year which concluded that around 13% of those who were employed before Covid-19 lost their jobs.

    Local Micro, Small, and Medium Enterprises (MSMEs) which employ more than 7.86 million people[3] faced a loss estimated at BDT 92,000 crore.[4] Though there are some encouraging signs such as reinstatement of apparel export orders and the spike in remittance inflow which indicate a recovery of sorts. However, the damage inflicted by the global pandemic has been undeniable.
    An aspect of the Labor Market that must be addressed with careful deliberation, is the issue of migrant workers. Exacerbated by COVID-19, Bangladesh may soon see a dramatic drop in remittances and many may face long-term loss in livelihood if the current situation continues.

    According to The Asian Development Bank, since 2012, nearly half a million Bangladeshis migrate abroad in search of employment each year. International Organisation for Migration’s (IOM) World Migration Report 2020 stated that over 7.5 million Bangladeshis are residing abroad, making them the 6th largest source of international migrants. Their earnings are often the main source of livelihood for their families in Bangladesh, and come in the form of remittances.

    Remittances are an important source of foreign exchange earnings that are second only to the export earnings of the Ready Made Garments Sector. Remittances averaged 1275.82 USD Million from 2012 until 2020, reaching an all-time high of 2598.21 USD Million in July of 2020 and a record low of 856.87 USD Million in September of 2017.[5]

    Remittances improve the country’s Balance of Payments and often serve as deterrents to encroaching poverty. However, a large number of the migrating labor are unskilled and face a number of issues in regard to employment conditions abroad and job security.

    Unethical Practices and Systemic Shortcomings Plague Migrant Workers

    Every year, an estimated 400,000 workers from Bangladesh go abroad in search of employment.[6] This is primarily due to the lack of job market openings available locally and the lack of employability of the laborers’ skills. Migrant workers face a plethora of problems such as the lack of information on job opportunities locally and abroad, high costs charged by recruitment agencies etc. The Pandemic has resulted in a large number of returnee migrant workers who fear permanent loss of their jobs and livelihoods. 

    Workers abroad are mostly those having low skill levels and going in search of jobs to alleviate poverty. This means that much of the employment abroad for Bangladesh is not career-focused and does not lead to substantial skill growth.

    Bangladesh Migrant Workers
    Figure: Share of Skill Categories in Migrant Workers / Source: Asian Development Bank

    With travel restrictions in place and in the face of the unprecedented COVID-19 crisis, labor migration was limited in 2020. Around 181,218 Bangladeshis went abroad, with 133,997 among them going to Saudi Arabia[7].

    Many laborers going abroad are subject to unethical practices that must be curbed in order to improve the situation for them.

    In the case of Saudi Arabia, the general practice is that  recruitment agencies charge a high sum of money in exchange for providing visas for individuals looking to migrate. These visas are provided by the initiative of Saudi citizens who essentially become ‘sponsors” for the Bangladeshi migrants. Each Saudi household is allowed to recruit up to 8 people for household work and recruitment agencies in Bangladesh serve as the intermediary in this. However, many of the migrating laborers do not actually end up working for their sponsors and must find employment elsewhere to earn their livelihoods. If caught in engaging in employment elsewhere, they face the risk of deportation back to Bangladesh.

    473 women migrant workers from Bangladesh have died abroad since 2016, 175 in Saudi Arabia alone.[8] This grisly statistic is just one reflection of the often-poor standards of living and work faced by Bangladeshi migrants abroad. There are little to no actions taken by local agencies that facilitate their migration in the first place as their main incentive remains the initial fees and not the subsequent welfare of the workers.

    Bangladesh Nari Sramik Kendra (BNSK) carried out a recent survey that revealed that many female migrant workers are the victims of wage theft. In the midst of the pandemic, 76 percent of returnee female migrants responded that they did not receive full pay from their employers despite a significant rise in workload. Only 22 percent of these respondents said that they received regular meals. This case is likely similar for male workers abroad as well. With a lack of highly-transferable skills and alternative job opportunities, migrant workers lose the ability to bargain and must face labor malpractices such as this or face possible seizures of passports and deportation instigated by disgruntled employers or otherwise.  

    A lack of information on the availability of work and the potential risks,  spurs this hapless exodus year upon year. 

    The Effect of COVID-19 on Migrant Labor

    COVID-19 has resulted in the return of many migrant laborers who now find themselves in a difficult position. Others who are still abroad are afraid of new labor reforms in those countries which may result in them having to return to Bangladesh. The Kuwait parliament has recently passed a law that will see the country take measures to cut down on the number of immigrant labor to amend their foreign worker to local citizens ratio over the span of a year. With over 350,000 Bangladeshis residing in Kuwait mainly in low-skill occupations, this could mean that they are forced to return home. The decision came about as a result of Kuwait suffering simultaneously from the blow of the pandemic and the decline in oil prices.[9]

    Data from the expatriates’ welfare desk at Hazrat Shahjalal International Airport reported 165,658 returnees from 29 countries between April to September of 2020. Among them, 149,018 were male and 16,640 female. Some 135,115 workers returned with a passport while 30,543 workers without passports. Some had also served imprisonment before their deportation.[10] 

    Most of the returnees are from the United Arab Emirates with 44,616 followed by Saudi Arabia 39,188, Qatar 14,911, Oman 10,713, the Maldives 10,483 and Kuwait 9,997.

    Bangladesh Migrant Workers
    FIGURE: Number of Returning Workers in 2020 by Country / Source: Expatriates’ Welfare Desk

    Remittance inflows in recent months have seen a spike. While this may seem positive, it is actually indicative of potentially more migrants returning in coming months. This pattern is observed as a result of labor sending more remittances home in fear of losing their jobs, and in order to help their families.
    Remittances sent by Bangladeshi migrant workers was USD 2.6 billion in July 2020, compared to USD 1.6 billion in July 2019. Similarly, in August 2020, remittance inflow was USD 1.96 billion as opposed to USD 1.44 billion in August 2019.[11] 

    Providing Relief to Returnees and Scopes of Reintegration

    Curbing the return of migrant workers in the short run is a difficult problem as it depends primarily on how the host countries deal with the pandemic locally. Given the large number of workers in oil-rich countries, the number of returnees may be negatively correlated to world oil prices. 

    Rather than worry about the number of returnees, focus must be placed on ensuring their welfare and possibly reintegrating them into the Bangladesh economy. The Ministry of Expatriates’ Welfare and Overseas Employment has launched a loan scheme worth BDT2.0 billion through Probashi Kallyan Bank (PKB) to be disbursed to such workers on the basis of their submitted loan proposals. Lags in disbursement and lack of knowledge on the criteria for availing the loans must be amended quickly.[12]

    In light of ailing labor conditions abroad in the face of the pandemic, and the prevalence of labor malpractice in host countries, Bangladesh may follow Nepal’s example in paying for the return of stranded migrant labor and initiating repatriation programmes that include financial assistance and psycho-social counselling. 

    The Social Safety Net Programmes in place must be made to include returnee migrants to not just serve as one-off cash disbursements but perhaps as guaranteed employment schemes for certain periods of timeThe returnees, who lost jobs abroad are eligible for USD83 million budgetary rehabilitation programmes according to the Honorable Minister of Finance[13] but the effectiveness of such programmes must be monitored and evaluated on a regular basis.

    Ultimately, policies to generate more employment domestically through enhanced private investment and improved technical and vocational training may improve the reintegration process and help returning migrants reclaim their livelihoods through entrepreneurship or formal employment.

    In addition to speeding up loan disbursements through government initiated programs aforementioned, criteria of proposals associated with them should be widely and clearly communicated. There is also a scope of private investment in accelerator programs that can help generate employment among returnee migrants and help them transition into entrepreneurship. The growing availability of seed funding and the technical know-how of local accelerators can be the facilitators of migrant reintegration.

    Sartaz Zahir, Content Writer and Sanjir Ali, Senior Business Consultant and Project Manager at LightCastle Partners, have prepared the write-up. For further clarifications, contact here: [email protected]

    References

    LightCastle Analytics Wing

    LightCastle Analytics Wing is the research division of LightCastle Partners. It is tasked with producing periodic reports on the different sectors of the economy, analyzing trends in markets and making methodical, thorough and intelligent analysis to improve strategy and drive business growth.