Remittance, export fall posing threat to economy

We all have to stand under one umbrella to boost inward remittance inflow and export as well for the betterment of the country by ignoring the controversial attitude with each other: economist.

Lenin Rahman

Experts have expressed their deep concern for declining the higher foreign exchange income-oriented resources namely the remittance and export income, imposing a negative impact to revamp the country’s economy from the adversity of the pandemic and the ongoing Russia-Ukraine war.

A recent Daily Tribunal and Adhikaran report disclosed that the country’s inward remittances fell by nearly 25 percent $1.54 billion in September compared to the previous month. On the other hand, export earnings fell by 6.25 percent year-on-year in September.

The economy is facing severe hardship since the beginning of the pandemic when it had largely spread in the country from March 2020.

The government was forced to enforce a shutdown and lockdown situation in the country and all the most impact-oriented sectors especially the service and industrial sectors failed to ensure the nominal contribution to the country’s Gross Domestic Product (GDP).

Only the higher agriculture production saved people from extreme famine, but the government is still putting its utmost effort to revamp the normal contribution of the service and industrial sectors.

Prime Minister Sheikh Hasina declared stimulus loan packages worth almost Tk 2 trillion was an appreciable effort to revamp the economy from the adversity of the pandemic because the lion’s share of the state facility was gained by the large stakeholders of the industrial and service sectors.

In the post-pandemic period, the highest foreign income-oriented sectors specifically the remittance and export income were satisfactory, but unfortunately, the start of the ongoing Russia-Ukraine war imposed a severe impediment on the global supply chain disruption.

The supply chain disruption tremendously affected industrial production, calculating a significant rise in production costs.

Bangladesh is highly dependent on imported raw materials for its industrial production, specifically RMG production. Some 40 of percent raw materials enter the country from China while 20 percent are from neighboring India.

Riding on the higher economic growth, Bangladesh achieved robust economic growth during the regime of the incumbent government led by the visionary Prime Minister Sheikh Hasina, but the ongoing Russia-Ukraine war is severely putting pressure on the export and remittance income of the country which is a concern for the economy of the country and the policymakers as well.

Meanwhile, the country’s foreign currency reserves are gradually squeezing to pay the import bills and to repay the foreign loan repayment.

A recent Daily Tribunal and Adhikaran report disclosed that external debt repayment is putting pressure on the economy.

The rising external debt repayment with interest is gradually increasing, putting pressure on the foreign exchange reserve and the economy as well.

The government is implementing multifarious mega projects across the country, forcing the government to borrow loan money from overseas resources.

As the government received higher loan money, ultimately the repayment money would increase in the upcoming years.

The government repaid the foreign debt of $112 million in the fiscal year 2016-17.

According to the report of ERD, foreign loans of 56.66 billion dollars have to be taken for the development projects of Bangladesh. Since Bangladesh’s biggest development partner is the World Bank, the multinational corporation alone provided 32.33 percent of the total loans for development projects in Bangladesh. ADB provided 23.52 percent of the loans. Further, Japan provided 17.79 percent of foreign debt, China provided 8.41 percent, Russia provided 8.93 percent, and India provided 1.79 percent.

On Sunday, Bangladesh Bank and the Export Promotion Bureau (EPB) published a report on remittance and export revenue. The report revealed that the remittance that came in last month, September, was the lowest in the last seven months. It had fallen by 24 percent from the previous month (August). Compared to the corresponding month of last year, the rate of decrease is around 10 percent.

Export revenue has fallen by 6.25 percent compared to September last year. After an upward curve for 13 consecutive months, export revenue has fallen.

Meanwhile, the expatriates are sending less remittance home to increase their living costs.

Apart from this, the money devaluation against the dollar also puts a negative impact on the economy, said an expert adding that the remittance and export income also fall for money depreciation.

Talking to the Daily Tribunal, Mirza Walid Shipon, President of Jubo Economist Forum told that the economic growth of the country is highly dependent on inward remittance and apparel export income.

The lower remittance inflow and export income are posing threat to the foreign exchange reserve in the country, he said adding that the authorities need to explore new export markets alongside the traditional market because the ongoing Russia-Ukraine war is severely affecting the external trade of the country.

Actually, stakeholders are facing multifarious crises for imposing higher prices of petroleum products, increasing production costs, and hindering the export mechanism as well.

He recommended mitigating the ongoing manpower export crisis to Malaysia because Malaysia is expected to hire at least 5 lac workers from Bangladesh in the next three years. “We all have to stand under one umbrella to boost inward remittance inflow and export as well for the betterment of the country by ignoring the controversial attitude with each other”, added Mirza.