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Remittances in Bangladesh: Determinants and 2010 Outlook

Zahid Hussain's picture

Co-authored with FARRIA NAEEM

Remittances have emerged as a key driver of economic growth and poverty reduction in Bangladesh, increasing at an average annual rate of 19 percent in the last 30 years (1979-2008).

Revenues from remittances now exceed various types of foreign exchange inflows, particularly official development assistance and net earnings from exports. The bulk of the remittances are sent by Bangladeshi migrant workers rather than members of the Bangladeshi Diaspora. Currently, 64 percent of annual remittance inflows originate from Middle Eastern nations.

Robust remittance inflows in recent years (annual average growth of 27 percent in FY06-FY08) have been instrumental in maintaining the current account surplus despite widening a trade deficit. This in turn has enabled Bangladesh to maintain a growing level of foreign exchange reserves.

Financing, Oversight Critical For Afghanistan's Army, Police

William Byrd's picture

Afghanistan needs more well-trained Afghan soldiers and better Afghan police, but the question is who will pay for them? The country cannot afford to pay the additional costs out of its own limited budget resources—any further money coming from this source will be at the expense of much less funding for urgent development priorities like educating children, improving basic health, building public infrastructure, etc. Will the international community commit to provide predictable funding for a number of years for Afghanistan’s security sector? This is a critical backbone of the state, whose development is essential to over time progressively replace international military forces which are far more costly. Creating security forces without the ability to pay for them will lead to obvious problems. And while expanding the Afghan security forces, it is critical to ensure that sound oversight and accountability mechanisms are in place.

Smaller South Asian nations not immune to the effects of global financial crisis

Sadiq Ahmed's picture

The smaller economies of Bangladesh, Nepal, and Sri Lanka continue to show optimism for their economies based on good remittance inflows and export indicators that demonstrate strong growth in 2008. Policymakers have used these statistics as evidence to believe that they have been relatively unaffected by the current global downturn. 

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