Harnessing Remittances for Economic Development of Bangladesh

This paper highlights the importance of remittances as a major source of foreign currency earning in Bangladesh.

Remittances are important for the country's balance of payment as well as economic development. They have significant macroeconomic impact at household level. Major challenges in Bangladesh for harnessing remittances for economic development are:

• Lack of skilled and professional personnel;
• Government foreign policy;
• Utilization of remittances in non-productive investment;
• Regulatory constraint for MFIs/NGOs to transfer remittances and offer diversified savings and credit products to families of migrants.

The government and donor communities have emphasized the importance of boosting remittances flow. MFIs and NGOs operating in Bangladesh, have, however, still not tapped the remittance sector. The paper makes the following recommendations:

• Establish more technical institutes that can supply skilled and professional personnel;
• Develop new foreign policy to explore the potential of manpower export;
• Utilize remittances in productive investment;
• Create an enabling environment to invest remittances in the capital market.