Covid–19: Foreign Remittances and Migrants' Well-Being in Bangladesh

Abstract

ABSTRACT: The COVID-19 pandemic has disrupted every sphere of life and livelihoods around the world. Many migrant workers from the Global South, such as Bangladesh, working in the Gulf countries were reported to be impacted by COVID-19, but the direct voices and views of migrant workers themselves and their households are largely unknown. This research adopts a mixed-method approach to assess the impact of the pandemic on foreign remittances to Bangladesh and the well-being of migrant households. The primary data collection involved fieldwork conducted in four migrant-dense villages, situated in Mymensingh and Meherpur districts of Bangladesh. A set of 221 household surveys was administered. In addition to the surveys, 52 semi-structured interviews were carried out, engaging with key individuals at community, district, and national levels such as heads of migrant households, returnee migrants, managers of migration financiers, owners of labor recruiting agencies, officials of the district manpower office etc. Results show that although a significant number of Bangladeshi migrant workers returned home since the COVID-19 pandemic and the outflow of Bangladeshi migrant workers shrank by 69 percent in 2020, remittance inflows at the national level witnessed a growth of 18.5 percent in 2020, which did not resonate with the negative prediction made by the World Bank. However, this research found a macro-micro mismatch, indicating a substantial decline in remittances at the household level. This might be due to the existence of a robust unofficial channel for remittance sending. Approximately 62% of migrant households in the case study sites experienced a 32% reduction in remittances during the COVID-19 pandemic compared to the pre-COVID-19 period. In response to the decline in remittance income, a majority of migrant households (77%) resorted to utilizing their accumulated savings. Additionally, approximately 20% of households sought financial support and borrowing from friends, relatives, and community members. At the community level, the local economy experienced a sharp downturn, leading to a ripple effect that affected everyone within the community. To address the unofficial remittance sending, the Government of Bangladesh should implement effective measures to curb unofficial remittance channels. Upskilling initiatives have the potential to alleviate the vulnerability of Bangladeshi migrant workers, fostering increased income stability. Policymakers should place greater emphasis on crafting savings instruments tailored to the specific needs of migrant households. It is also imperative to prioritize an income diversification policy at the community level to mitigate dependence on remittances.