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Poverty

The Remittance Multiplier in Action

Zahid Hussain's picture
David Waldorf/World Bank

In introductory macroeconomic class, students learn the theory of the multiplier and many interesting counterintuitive notions such as the paradox of thrift and the balanced budget multiplier based on the multiplier process.  Essentially, the multiplier multiplies because one person’s expenditure is another person’s income of which they spend a fraction, which in turn becomes another person’s income, of which a fraction is spent and the process eventually converges with subsequent increments to income getting smaller and smaller.

How does the multiplier process work in reality?  The Refugee Migration Movement Research Unit (RMMRU) in Bangladesh has recently completed the first phase of a longitudinal research on the impact of external and internal migration on income and poverty in Bangladesh. The research is based on a survey of 5084 external, internal and non-migrant households from 102 villages.  Among others, one of the most interesting is their findings on the impact of external migration on local level development through remittances and expenditure behavior of remittance recipients. Note that since the mid-1970s, Bangladesh has participated mostly in the short-term international labor markets of the Gulf and other Arab countries, as well as South East Asian countries. Over the last ten years, an average 500,000 workers have migrated abroad for work each year. Currently, an estimated 8 million Bangladeshi workers are on short-term migration abroad.

In 2013 the short-term international migrant (STIM) households on average received Tk 251,400 (over $3100) as remittance. The maximum amount received was Tk 4,400,000 and the minimum was Tk 6000.  The study found international migration plays a significant role in reducing poverty. Only 13 percent of the STIM households were below the poverty line, compared with 40 percent of the non-migrant households. The survey particularly covered those groups that were either below poverty line, experienced occasional deficits, or ‘break-even’ situations at the time of their first international migration.

August 1, 2014: This Week in #SouthAsiaDev

Mary Ongwen's picture
We've rounded up 20 tweets, posts, links, and +1's on South Asia-related development news, innovation and social good that caught our eye this week. Countries included:Bangladesh, India, Nepal, Pakistan and, Sri Lanka.

July 25, 2014: This Week in #SouthAsiaDev

Mary Ongwen's picture
We've rounded up 18 tweets, posts, links, and +1's on South Asia-related development news, innovation and social good that caught our eye this week. Countries included: Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan

Boosting South Asian Trade – Carpe Diem!

Sanjay Kathuria's picture
sar-trade-manufacturing
Ismail Ferdous/World Bank

South Asia’s Commerce Ministers meet in Thimphu on July 24. Getting there would not have been easy for many of them, with no direct flights between Thimphu and four of the seven capitals. In June, when some of us convened for a regional meeting in Kathmandu, our Pakistani colleagues had to take a 20 hour flight from Karachi to Dubai in order to get to Kathmandu! This is symptomatic of the overall state of economic engagement within South Asia—in trade in goods and services, foreign direct investment and tourism.

South Asian countries’ trade policies remain inward-looking compared to other regions, and there are even bigger barriers to trade within the region. Today, South Asia today is less economically integrated than it was 50 years ago. Figure 1 below shows that intra-regional trade in South Asia accounts for less than 5 percent of total trade, lower than any other region. 

July 18, 2014: This Week in #SouthAsiaDev

Mary Ongwen's picture
We've rounded up 22 tweets, posts, links, and +1's on South Asia-related development news, innovation and social good that caught our eye this week. Countries included: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal

Urbanization and its Discontents: Educating Dhaka’s Slum Children

Mabruk Kabir's picture



“I wanted to be a doctor,” said Batashi, a 13-year-old girl with an infectious smile, “But I had to leave school after class 3, there was no one else to look after my brothers.”

I met Batashi on a muggy afternoon in Korail, the largest slum in Dhaka city. Nestled in the shadows of the city’s glitzy condo buildings, Korail is home to 16,000 families that cram into just .25 square kilometers. Driven from their rural homes by poverty, about 500,000 people – roughly the population of Washington DC – migrate to the city each year.

This makes Dhaka one of the fastest growing cities in the world – a dubious honor for an already overstretched city. It is estimated that by 2030, close to 100 million people – almost half the population of Bangladesh – will be living in urban areas. Many of these migrants will inevitably end up in slums like Korail.

July 4, 2014: This Week in #SouthAsiaDev

Mary Ongwen's picture
We've rounded up 20 tweets, posts, links, and +1's on South Asia-related development news, innovation and social good that caught our eye this week. Countries included: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal

Maafushi Island Shows the Way for Inclusive Wealth Creation through Tourism

Sandya Salgado's picture



The success story of Maafushi, an island in the Kaafu Atoll in the Maldives, dates back to 2009 when the government liberalized its policy on local tourism. A visionary entrepreneur, Ahmed Naseer, lost no time in starting a four roomed guest house in 2010, to kick start the concept of local tourism in his home island Maafushi. And the rest is history!

Maafushi’s expansion from one guest house in 2010 to thirty guest houses to date is a remarkable success story which I was privileged to witness firsthand last week. 

An island with 2000 locals had welcomed 600 tourists last year. They were coming in search of an affordable, simple holiday, just for the sun and sea experience, living amongst the islanders while experiencing theiruniqueculture and lifestyle. Maafushi’s model of attracting local tourists has provided an alternative to the high end tourism that Maldives is known world over for. 

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