SEVERAL renowned economists of the nation have said that the use of a staggering 88 per cent of remittances sent by Bangladeshis abroad on unproductive purposes like buying flats and land and other conspicuous consumption was prompting artificial price hikes of property and consumer goods. Their opinion is substantiated by a recent study by Bangladesh Bureau of Statistics. A previous BB study said that the government could mobilize $20-30 billion for the development infrastructure and transportation network if the expatriates were given the guarantee of hassle-free investment with reasonable returns. The findings of BB and the latest BBS survey were almost identical, said economists.
Reports have it that, the local recipients spent 72.05 per cent of the annual inflow of remittances on building homes and 15.89 per cent on buying flats, said the first public survey on the issue done by the Bangladesh Bureau of Statistics. Around eight million Bangladeshis working mainly in Arab countries and Malaysia sent home $14.46 billion in FY 2012-13 almost double of the $7.9 billion they had remitted in FY 2007-08. Unproductive utilization of hard earned remittances led to increased expenditures on import of consumer goods, household appliances, chemicals and gold, say economists. The BBS survey said recipients of remittance in Dhaka, Barisal, Khulna, Rajshahi and Rangpur divisions spent 80 to 90 per cent of remittances on buying land.
The survey blamed a lack of policy for better utilization of the hard-earned foreign currencies for the staggering misuse. The BBS report said that the government should frame policies immediately for diverting the remittance for productive utilization. Economists have been blaming the expenditures on acquisition of real estate for the land price hike and loss of cultivable land. They say that this was also the reason why the country was losing at least one per cent of its cultivable land each year.
We believe unproductive utilization of remittances would contribute to further artificial price hikes of property and increase the number of idle population in the rural areas. Besides, an alarming increase in flight of capital and falling private investments also contribute to growing unemployment, say economists. The national economy would suffer in the long run if the current trend of remittance utilization was allowed to continue. On the other hand if the remittances could be used in productive sectors like industrialization then it could speed up the rate of growth quickly. So it is an asset disguised as a burden. We suggest the government take wise and effective action plans to encourage remittance senders to invest in productive sectors.
