Bangladeshi diaspora sends money to Bangladesh to support family and relatives. Remittances are funds sent from the country of origin to the land of birth by an individual worker who has received them. Remittances have been sent for generations, but the size and speed of remittances have risen significantly in recent decades. Remittances are of significance to development economic geographers because they represent a massive, increasing, and stable flow of capital into the world’s developing countries.
Remittances are generally thought to be beneficial to the economy. Remittances alleviate foreign exchange deficiencies and balance-of-payments deficits in developing countries without causing interest liabilities or necessitating an increase in foreign goods and services purchases. Furthermore, there seems to be little doubt that money transfers from abroad are a significant source of income with welfare benefits for those households who have access to them.
Why Is Remittance Decreasing In 2020 And 2021?
Money transfers to Bangladesh and other low and middle-income countries (LMICs) are expected to drop by 7% points in 2020, to £508 billion, and then by another 7.5 per cent in 2021, to £470 billion. The economic slowdown and job levels in migrant-hosting states, low oil prices, and depreciation of remittance-source countries’ currencies against the US dollar are the main factors driving the decline in remittances.
The drops in 2020 and 2021 will impact all countries, with Europe and Central Asia experiencing the sharpest declines (16% and 8 per cent, respectively), followed by East Asia and Sub-Saharan Africa (9 per cent and 6 per cent), South Asia (4 per cent and 11 per cent), the Pacific (11 per cent and 4 per cent), the Middle East and North Africa (8 per cent and 8 per cent), Africa and Latin America (4 per cent and 11 per cent). The current economic crisis triggered by coronavirus is wreaking havoc on people’s ability to send money to Bangladesh online, making it even more vital to reduce the time it takes for industrialized economies to recover.
How Much I Have To Pay As a Fee For Sending Money To Home Country?
Remittances are correlated with a variety of possible costs. If the emigrating workers are highly qualified or their departure causes labour shortages, countries that receive remittances from migrants incur costs. Furthermore, if remittances are high, the recipient country’s real exchange rate will appreciate, making its economy less globally competitive. Some have the misconception that online money transfer to Bangladesh and other countries will lead to dependence, reducing recipients’ motivation to work and slowing economic growth as online money transfer is quick, easy, and secure.
Others, however, argue that the negative relationship between remittances and growth found in some empirical studies may reflect the countercyclical existence of remittances, i.e., the effect of growth on remittances rather than the other way around.