Remittance inflow from the Kingdom of Saudi Arabia has halved in three years despite the country being largest overseas labour market for Bangladeshi workers.
According to a Bangladesh Bank report, remittances from Saudi Arabia dropped by $3.8 billion, or 52 per cent, in FY24 compared with those in FY21.
The inflow fell to $2.74 billion in FY24 from $3.76 billion in FY23, $4.54 billion in FY22 and $5.72 billion in FY21, reflecting a downward trend.
Despite being the top destination for Bangladeshi migrant workers, Saudi Arabia鈥檚 remittance inflow has declined notably in recent quarters, BB report said.
In contrast, the United Arab Emirates, with a much smaller number of Bangladeshi migrant workers, registered a remarkable increase in remittance inflow during the same period, it said.
Remittances from the UAE surged to $4.6 billion in FY24, up from $3.03 billion in FY23 and $2.07 billion in FY22, suggesting that skilled labour participation played a significant role in driving these earnings, it said.
Data from the Bureau of Manpower, Employment, and Training (BMET) showed that 4,97,674 Bangladeshi workers migrated to Saudi Arabia in 2023, compared with 98,422 to the UAE.
In the April-June quarter of FY24 alone, more than 1,18,000 workers went to Saudi Arabia, while only 10,705 went to the UAE.
Despite the higher number of Bangladeshi workers in Saudi Arabia, remittance inflows from the country have failed to keep pace with those from the UAE.
The ongoing decline in remittances from Saudi Arabia, a key pillar of Bangladesh鈥檚 foreign exchange earnings, is concerning.
Economists have attributed this downward trend to several factors, including changes in the composition of the labour force, with a larger portion of low-skilled workers whose earnings are generally lower than those of skilled labourers.
Additionally, increased competition on the labor market, stricter labour regulations, and challenges related to economic adjustments in Saudi Arabia could be contributing to the reduced inflows, they said.
However, they were also suspicious about the sudden surge in remittance from the UAE as the country allegedly became a hub of illicit money flow.
In FY24, Bangladesh received $23.91 billion in remittances, marking a 10.65-per cent increase from $21.61 billion in FY23.
According to the central bank report, this rise in remittances was driven by a surge in the total number of expatriate workers and a significant increase in the dollar rate, which incentivised remitters to send money home through formal banking channels.
The report also highlighted the shifting dynamics of remittance inflows by the country.
During the April-June quarter of FY24, Bangladesh received the highest remittance inflows from the UAE, amounting to $1,329.48 million, which accounted for 19.44 per cent of the total remittances.
The United States followed as the second largest source of remittances, contributing $1,018.21 million, or 14.89 per cent of the total.
In contrast, Saudi Arabia, despite hosting nearly half of all Bangladeshi migrant workers, contributed only 11.32 per cent of the total remittance inflows.
The BMET data indicated that 2,72,141 Bangladeshi workers went abroad during the April-June quarter of FY24, with about 1,18,581 migrating to Saudi Arabia.
Among the overseas workers, 11,970 were women, making up 4.40 per cent of the total migration during this period.
However, the number of female workers migrating abroad has been on the decline since the October-December quarter of 2021.