The indigenisation programmes being considered or implemented in the countries under Gulf Cooperation Council including Saudi Arabia have raised concerns of adverse implications for future remittances to migrant-sending countries including Bangladesh, said a World Bank report released on Thursday.
‘While the indigenisation may not affect remittances in the near-term, they highlight the importance of destination country policy changes for the future sustainability of remittance flows to developing countries [including Bangladesh],’ said the WB’s Outlook for Remittance Flows 2012-2014
The report also mentioned that a deepening and spread of the European debt crisis would also pose risks for oil prices, which could in turn reduce demand for migrant workers and depress remittance flows to Asian countries.
‘Volatile and unpredictable exchange rates present further risks to the outlook for remittances,’ it said.
The report estimated that the total amount of remittance Bangladesh would receive in 2011 would be $12 billion while India could earn $58 billion, followed by China ($57 billion), Mexico ($24 billion), the Philippines ($23 billion) and Pakistan ($12 billion).
It said remittances to South Asia are estimated to have grown by 10.1 per cent in 2011, East Asia and Pacific region 7.6 per cent, and to Eastern Europe and Central Asia by 11 per cent.
The depreciation of the currencies of some large receiving countries including Mexico, India and Bangladesh created incentives to send remittances to take advantage of the ‘sale effect’ on local currency assets.
It said oil driven economic activities and increased spending on infrastructure development are making GCC attractive for migrants from developing countries. Remittance from the GCC countries to Bangladesh and Pakistan (where the GCC countries account for 60 per cent or more of overall remittance inflows) grew by 8 per cent and 31 per cent respectively in the first three quarters of 2011 on year on year basis, it said.
‘As a result of the increased demand for migrant workers, migrant deployment from Bangladesh grew strongly, by 37 per cent, in the first-three quarters of 2011 (after registering a 20 per cent decline in the previous year).’
Officially recorded remittance flows to developing countries are estimated to have reached $351 billion in 2011, an 8 per cent increase over $325 billion in 2010. This rate of increase is higher than the WB earlier forecast of 7.3 per cent growth.
Worldwide recorded remittance flows, including flows to high income countries, are estimated to have reached $406 billion in 2011.
For the first time since the global financial crisis, remittance flows to all developing region rose in 2011.
-With New Age input
