2020-06-27 10:23:56 BdST
Job creation for returnee workers
The Covid-19 pandemic and ensuing worldwide containment measures have led the global economy on the verge of the deepest recession since the 1930s great depression. As the pandemic unfolds itself across countries, the plight and the vulnerability of hundreds of thousands of expatriate workers are becoming evident. In particular, the semi-skilled and the low-skilled categories of labour force have been bearing the brunt of the shock. Among the low-skilled category, those who lacked valid contractual agreement or residence permits or were unemployed or underemployed before the outbreak of the pandemic, have been particularly affected by the crisis.
The struggles and woes of expatriate workers often remain masked under remarkable achievements of Bangladesh's external sector. Between June 2000 and May 2020, gross foreign exchange reserves of Bangladesh Bank increased more than twentyfold (from US$1.6 billion June 2020 to $33.2 billion in May 2020), which is mainly driven by sevenfold increase in annual export earnings and ninefold increase in inflows of workers remittances, over the same period. These achievements mostly represent the joint contribution of the hard-working expatriates and the workers of the export-oriented manufacturing sector. However, their wellbeing and interests are often overlooked by the stakeholders and the policymakers.
HOW IS THE CRISIS AFFECTING OUR EXPATRIATE WORKERS?: The COVID-19 pandemic has affected some of the major remittance sources in the hardest way possible both in terms of fatalities and of shutdown of economic activities.
LABOUR MARKET SHRINKAGE: Bangladeshi citizens who are living abroad are facing multiple challenges in the face of COVID-19. On the one hand, expatriate workers are facing higher risks of contagious disease and they are encountering greater risks of lower earnings and losing employment, on the other. Recent reports suggest that in most of the host countries a large portion of the workers have already lost their jobs or have remained unemployed or have not received any wages due to business shutdowns. The workers who do not have any proper documents are facing an even harder time due to lack of food and cash. Outflow of migrant workers or overseas employment has also been halted due to travel restrictions and demand shrinkages.
FALLING OIL REVENUE: The Gulf Cooperation Council (GCC) countries that host a large portion of Bangladeshi migrant workers are highly dependent on oil revenue. Though the health crisis in the GCC member countries is not as severe as in many of the advanced economies, still they are facing additional economic hardships caused by a steep fal in oil prices.
LOCAL SOURCING: In addition to this, external pressure on Bangladesh has been increasing for taking back the unemployed Bangladeshi workers from the GCC countries as they are focusing on securing their labour market for their own citizens in the face of the economic crisis. Bangladesh's migration stock in oil-dependent host countries may show a downward trend in the next few years due to a decrease in the outflow of workers and an increase in the inflow of returning migrants. This predicted drop in migration stock has important policy implications as discussed below.
IMPLICATIONS FOR BANGLADESH ECONOMY: In the face of COVID-19 crisis, Bangladesh economy has to manage multifaceted challenges relating to remittances and employment of migrant workers. Firstly, inflows of workers' remittances may fall as a result of a recession in the host countries and a fall in migration stocks particularly in the oil-dependent countries. Secondly, the rise in the inflow of returning migrant workers as a consequence of the crisis means that the returnees may be in need of financial and social support to resume their livelihoods in the home country, as many of them may experience unemployment and hunger for a few months before returning home.
WHAT CAN WE DO TO PROTECT OUR EXPATRIATE WORKERS?: The reserves and the flow of external resources will play a very important role, if managed prudently, in Bangladesh's fight against the health and economic crises engendered by COVID-19 pandemic. These economic resources that generally work as shock absorbers have indeed been the key sources of strength for the Bangladesh economy during the time of crisis. During the global financial crisis that started in summer 2007, remittances remained the most stable source of foreign currency for Bangladesh.
The government has already taken several initiatives to help the migrant workers in the host countries. These include, among others, providing food support for the migrant workers through the Bangladesh missions or local charities, and initiating diplomatic effort to reduce the possibilities of lay-offs and to delay the process of their return. In addition to the above initiatives, the government should involve a set of actions to support the migrant workers and create employment for them.
REGISTER RETURNING MIGRANTS: All the returning, returnee migrant workerss should be registered on arrival with a mobile banking account and their information should be preserved in a digital database. This database will help the government to manage the resettlement arrangement and to provide financial and social support to the returning workers based on their need. There should also be enough COVID-19 testing and institutional isolation facilities for the returnee migrant workers to prevent further spread of the disease.
HARDSHIP FUND: As some of the unemployed returning expatriates have been stranded for months in the lockdown situation, they may need food and cash support upon their arrival in Bangladesh. Some of the returnees may also need support psychosocial. To facilitate these activities a special helpline for the returnees should be operated by the government.
ENSURE FOOD SECURITY: During the time of crisis, ensuring food security for all should be the key policy strategy of the government. Availability of food for the returnee workers should be ensured through the helpline. All the returning workers should be encouraged to take-up agricultural activities including production of crops, vegetables, livestock, poultry and fisheries. The surplus products can be exported or sent as food aid to support expatriate workers in the host countries.
CREATE JOBS: The government should take up special investment programs to create jobs in the rural areas. The recruitment process of such programs should prioritize workers based on their skills and experiences. In the face of the evolving global pandemic and political situation, strengthening the home economy through providing appropriate financial and regulatory support to SMEs across all sectors will boost employment creation both in the short and in the long terms.
INVOLVE NGOs: In order to facilitate the employment creation process, the government should create a fund for providing credit to the returnee migrant woekers. Furthermore, the concerned government agencies and microfinance institutions should arrange specially designed training programs on income generating activities (IGA) for the returnee workers. The microfinance institutions should be provided with special funds for supporting the migrant workers with low interest loans to facilitate IGAs.
UPGRADE SKILL: The global demand for foreign workers is changing in favor of technical and vocational skills. As a long-term development strategy, the education system of the country should be redesigned focusing on the global skill needs, and required investment should be made to increase the competitiveness of the country in the world market.
Finally, success of the above programs critically depends on the complexity and duration of the pandemic situation. The sooner we can contain Covid-19 in Bangladesh, the faster we will be able to recover from the economic downturn.
Dr. Shubhasish Barua is Assistant Professor, Department of Development Studies, University of Dhaka.
The article is based on a policy paper titled "External Sector Uncertainties in the time of COVID-19 Crisis: Tackling Unemployment in Bangladesh" released by Centre on Budget and Policy, University of Dhaka.
Unauthorized use or reproduction of The Finance Today content for commercial purposes is strictly prohibited.