IT IS a mystery. Last year Bangladesh’s army of migrant workers abroad increased by a record 750,000, to reach 8m-odd. They travel to earn money for their families. Yet the statistics suggest they are sending less money home. In the fiscal year that ends this month, recorded remittances will have fallen for the second consecutive year, this time by more than 10%, to $12bn (see chart). To explain the puzzle, look to the places they work, to technology and to the growing popularity of a fiddle used by Bangladeshi importers.
The abrupt cancellation last November by the Indian government of most banknotes by value was one factor: monthly inflows crashed, as the millions of Bangladeshis working in India were strapped for cash. In the Gulf, the source of 60% of Bangladesh’s remittances, the economy has been relatively sluggish.
But even without these shocks, remittances were falling—and fewer were being counted. Bangladesh is not unique in suffering such a downturn: for the first…Continue reading