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The Role of Remittances on National Economic Development: A Study on Bangladesh Perspective

Received: 22 July 2023     Accepted: 8 August 2023     Published: 17 August 2023
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Abstract

Bangladesh is a lower middle income country in the world with a large share of income earning from foreign workers' remittance and it helps to improve the country’s GDP, enhances national savings, significant changes in household lifestyle, and boosting money flow. Most of the lower and middle-class people in Bangladesh are financially solvent and lead a standard life for the main reason of foreign remittance, because at least one or two members of that family went abroad for the purpose of earning. The second biggest source of foreign exchange earnings is remittance that can be contributed to improve the nation’s capital, BOP (Balance of Payment), and reserve money of the nation. The aim of the study is to find out the remittances and its contribution to economic growth of Bangladesh. This paper reveals the present scenario of remittance inflows in Bangladesh and how it helps to generate national capital reserves and solve the unemployment problem through exporting skill migration to abroad. The study suggests that there is a positive relationship between remittances and economic development and also makes clear policy recommendations that can assure sustainable remittance inflow, ease easy emigration, and direct a sizeable portion of received remittances into productive industries with the goal of boosting growth, creating jobs, and reducing poverty.

Published in American Journal of Theoretical and Applied Business (Volume 9, Issue 3)
DOI 10.11648/j.ajtab.20230903.11
Page(s) 70-74
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2023. Published by Science Publishing Group

Keywords

Remittances, Economic Development, GDP, Bangladesh

References
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[2] Azam, M. (2015). The role of migrant workers’ remittances in fostering economic growth: The four Asian developing countries’ experiences. International Journal of Social Economics, 42 (8), 690–705.
[3] Barai, M. K. (2012). Development dynamics of remittances in Bangladesh. Sage Open, 2 (1), 2158244012439073.
[4] BMET (2023). Bureau of Manpower Employment and Training, Ministry of Expatriate Welfare and Overseas Employment. Retrieved from https://www.thedailystar.net/supplements/32nd anniversary/towards-smart-bangladesh/news/better-care-migrants-can-ensure-higher-remittance-earnings-3244666
[5] Chowdhury I. A. (2014): “Impacts of remittance on the socio-economic condition of Bangladesh: An analysis”, Innovative Issues and Approaches in Social Science, Vol. 7, No. 3, pp. 23-43.
[6] Chowdhury, M. B. (2011). Remittances flow and financial development in Bangladesh. Economic Modelling, 28 (6), 2600–2608.
[7] Comes, C. A., Bunduchi, E., Vasile, V., & Stefan, D. (2018). The impact of foreign direct investments and remittances on economic growth: A case study in Central and Eastern Europe. Sustainability, 10 (1), 1–16.
[8] Das, A., and Chowdhury, A., (2011). “Remittances and GDP Dynamics in 11 Developing Countries: Evidence from Panel Cointegration and PMG Technique”, Romanian Economic Journal, 14, 3–24.
[9] Ferdaous, J. (2016). Impact of remittances and FDI on economic growth: A panel data analysis. Journal of Business Studies Quarterly, 8 (2), 58–77.
[10] Giuliano, P., & Ruiz-Arranz, M., (2005). “Remittances, Financial Development and growth”, IMF Working Paper, WP/05/234.http://www.imf.org/external/pubs/ft/wp/2005/wp05234.pdf
[11] Jawaid, S. T. and Raza, S. A., (2014). Effects of Workers' Remittances and its Volatility on Economic Growth in South Asia. International Migration. (http://onlinelibrary.wiley.com/doi/10.1111/imig.12151/epdf).
[12] Meyer, D., & Shera, A. (2017). The impact of remittances on economic growth: An econometric model. Economia, 18 (2), 147–155.
[13] Paul, B. P., & Das, A. (2011). The remittance-GDP relationship in the liberalized regime of Bangladesh: Cointegration and innovation accounting. Theoretical and Applied Economics, 9 (9), 41–60.
[14] Pradhan, G., Upadhyay, M., & Upadhyaya, K. (2008). Remittances and economic growth in developing countries. The European journal of development research, 20 (3), 497–506.
[15] Rahman, Md M, & Yeoh, B. S. A. (2008). The social organization of Hundi’. Asian Population Studies, 4 (1), 5–29.
[16] Ramirez, M. D. (2013). Do financial and institutional variables enhance the impact of remittances on economic growth in Latin America and the Caribbean? A panel cointegration analysis. International Advances in Economic Research, 19 (3), 273–288.
[17] Rao, B. B. and Hassan, G. M., (2012). Are the Direct and Indirect Growth Effects of Remittances Significant?. World Economy, 35, 351–372.
[18] Wadood, S. N., & Hossain, Md. A. (2015). Impact of overseas remittances on economic growth: Evidences from Bangladesh. Munich Personal RePEc Archive. Paper No. 81657, https://mpra.ub.uni-muenchen.de/81657/. The Dhaka University Studies [Journal of the Faculty of Arts], 70 (1), 93–111.
[19] World Bank, (2022). The World Bank Migration and Development Brief. 37, Migration and Remittances Team, Development Prospects Group. Retrieved from https://www.gktoday.in/world-bank-migration-and-development-brief/
Cite This Article
  • APA Style

    Sunjida Wadud Upama. (2023). The Role of Remittances on National Economic Development: A Study on Bangladesh Perspective. American Journal of Theoretical and Applied Business, 9(3), 70-74. https://doi.org/10.11648/j.ajtab.20230903.11

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    ACS Style

    Sunjida Wadud Upama. The Role of Remittances on National Economic Development: A Study on Bangladesh Perspective. Am. J. Theor. Appl. Bus. 2023, 9(3), 70-74. doi: 10.11648/j.ajtab.20230903.11

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    AMA Style

    Sunjida Wadud Upama. The Role of Remittances on National Economic Development: A Study on Bangladesh Perspective. Am J Theor Appl Bus. 2023;9(3):70-74. doi: 10.11648/j.ajtab.20230903.11

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  • @article{10.11648/j.ajtab.20230903.11,
      author = {Sunjida Wadud Upama},
      title = {The Role of Remittances on National Economic Development: A Study on Bangladesh Perspective},
      journal = {American Journal of Theoretical and Applied Business},
      volume = {9},
      number = {3},
      pages = {70-74},
      doi = {10.11648/j.ajtab.20230903.11},
      url = {https://doi.org/10.11648/j.ajtab.20230903.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtab.20230903.11},
      abstract = {Bangladesh is a lower middle income country in the world with a large share of income earning from foreign workers' remittance and it helps to improve the country’s GDP, enhances national savings, significant changes in household lifestyle, and boosting money flow. Most of the lower and middle-class people in Bangladesh are financially solvent and lead a standard life for the main reason of foreign remittance, because at least one or two members of that family went abroad for the purpose of earning. The second biggest source of foreign exchange earnings is remittance that can be contributed to improve the nation’s capital, BOP (Balance of Payment), and reserve money of the nation. The aim of the study is to find out the remittances and its contribution to economic growth of Bangladesh. This paper reveals the present scenario of remittance inflows in Bangladesh and how it helps to generate national capital reserves and solve the unemployment problem through exporting skill migration to abroad. The study suggests that there is a positive relationship between remittances and economic development and also makes clear policy recommendations that can assure sustainable remittance inflow, ease easy emigration, and direct a sizeable portion of received remittances into productive industries with the goal of boosting growth, creating jobs, and reducing poverty.},
     year = {2023}
    }
    

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    T2  - American Journal of Theoretical and Applied Business
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    AB  - Bangladesh is a lower middle income country in the world with a large share of income earning from foreign workers' remittance and it helps to improve the country’s GDP, enhances national savings, significant changes in household lifestyle, and boosting money flow. Most of the lower and middle-class people in Bangladesh are financially solvent and lead a standard life for the main reason of foreign remittance, because at least one or two members of that family went abroad for the purpose of earning. The second biggest source of foreign exchange earnings is remittance that can be contributed to improve the nation’s capital, BOP (Balance of Payment), and reserve money of the nation. The aim of the study is to find out the remittances and its contribution to economic growth of Bangladesh. This paper reveals the present scenario of remittance inflows in Bangladesh and how it helps to generate national capital reserves and solve the unemployment problem through exporting skill migration to abroad. The study suggests that there is a positive relationship between remittances and economic development and also makes clear policy recommendations that can assure sustainable remittance inflow, ease easy emigration, and direct a sizeable portion of received remittances into productive industries with the goal of boosting growth, creating jobs, and reducing poverty.
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Author Information
  • Department of Natural Science, Port City International University, Chattogram, Bangladesh

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