Agents push up costs of migration

IOM releases first remittance household survey
Intermediaries eat up 60 percent of the migration costs in Bangladesh, pushing up the total expenses to the highest in South Asia, according to a national survey released yesterday.
The intermediaries, followed by relatives, emerged as the major agents helping migrants with their overall process of emigration out of Bangladesh.
Seventy-five percent of migrants spend between Tk 100,000 and Tk 300,000, while around 10 percent pay out over Tk 300,000.
Of the total costs, 59.5 percent are spent on intermediaries (agents and brokers), 10.3 percent on agencies, 9.3 percent on visas and 17.6 percent on ‘other helpers’.
The findings came out at a seminar on migration, remittances and assets in Bangladesh, organised to mark the launch of ‘Bangladesh Remittance Household Survey 2009′ at the Westin Dhaka hotel.
The International Organisation for Migration (IOM) conducted the first-ever countrywide survey with a sample of 10,673 households based on the facts of 2009.
Atiur Rahman, Bangladesh Bank governor, attended the programme as chief guest, while Zafar Ahmed Khan, secretary of expatriates’ welfare and overseas employment ministry, was the special guest.
Khan said the high cost of migration is a concern for the government.
The official cost for migration to a Middle East country is only Tk 84,000, but the expatriates are paying up to Tk 200,000, Khan added.
“The intermediaries have overwhelming influence. The government needs to develop institutional mechanism to minimise the influence of the intermediaries,” the governor said.
IOM’s regional representative Rabab Fatima said the survey showed the migrants from Bangladesh have to pay higher amounts for migration.
“The survey findings substantiate earlier estimates that Bangladesh has the highest migration cost in the region,” said Fatima.
The survey also focused on the mechanisms the migrants use to send money home.
According to the survey, 90 percent of the respondents said it takes 15 days to send money through formal channels (banks, money transfer companies), whereas informal channels (like hundi) take less than five days.
The findings show that the expatriates have a preference for formal channels for safety, but use informal channels for quick delivery of remittance.
The report found that a person has to pay at least two visits to a bank or a post office to receive a payment, while people receiving remittances through informal channels mostly require only one visit.
Most of the recipients do not pay extra money to get the remittances. But about 10 percent said they have to pay unofficial money to the officers.
According to the survey, around 23 percent migrants face problems in the migration process and over 20 percent after arriving the destination. Nearly 50 percent said they did not get remuneration in line with their contracts. An expatriate sends on an average Tk 81,710 per year.
The families that receive remittances try to own more assets than the non-migrant families do, the survey found.
Of the suggestions the report said liberalisation of the payment markets, financial product design and financial literacy could deliver short-term results.
Last year Bangladesh received $10.72 billion as remittances, according to the expatriates’ welfare and overseas employment ministry. The figure is 12 times the amount of last year’s foreign direct investment and six times the amount of overseas development assistance.
The remittance is 12 percent of Bangladesh’s gross domestic product.

Courtesy of The Daily Star