Bangladesh Economic Review 2023 Chapter 3 PDF

Bangladesh Economic Review 2023 CHAPTER THREE PRICES, WAGES AND EMPLOYMENT Due to the Russia-Ukraine war, the imposition of various economic sanctions on Russia by the western world and Europe, the world market...

Bangladesh Economic Review 2023 CHAPTER THREE PRICES, WAGES AND EMPLOYMENT Due to the Russia-Ukraine war, the imposition of various economic sanctions on Russia by the western world and Europe, the world market system has been severely disrupted. On the other hand, there is instability in the currency market and there is a jump in commodity prices due to disruption of supply chain. According to the IMF's ‘World Economic Outlook April 2023’, inflation for 2023 is projected at 4.7 percent in the countries of advanced economies and 8.6 percent in the countries of emerging market and developing economies, compared to 7.3 percent and 9.8 percent in 2022 respectively. Inflation rate of Bangladesh stood at 6.15 percent in FY 2021-22, which was 5.56 percent in FY 2020-21. During FY 2022-23 (up to January 2023) inflation increased from 7.48 percent in July 2022 to 8.57 percent in January 2023. During this period, food inflation decreased from 8.19 percent in July 2022 to 7.76 percent in January 2023. At the same time, non-food inflation increased from 6.39 percent in July 2022 to 9.84 percent in January 2023. According to the last Labour Force Survey (LFS) 2022 (provisional report) conducted by BBS, the number of economically active population (above 15 years) in the country is 7.34 crore (male 4.75 crore and female 2.59 crore), out of which a labour force of 7.08 crore is engaged in a number of professions. According to the survey, total labour force employed in agricultural sector, service sector and industry sector are 45.33 percent, 37.65 percent and 17.02 percent respectively. According to the Bangladesh Wage Rate Index (Base Year 2010-11), the Nominal Wage Rate Index has increased to 202.68 points in FY 2022-23 from 118.82 points in FY 2013-14. Overseas employment and remittances from expatriates are contributing immensely to the country's economic development, by increasing employment in the country, as well as reducing unemployment, poverty alleviation and increasing foreign exchange reserves. In the FY 2021-22, a total of 9.89 lakh people and in the FY 2020-21, a total 2.80 lakh people went abroad with employment. In the FY 2021-22, expatriate workers sent a total of US$ 21,031.70 million as remittance, which is 15.12 percent less than the previous fiscal year. In the first eight months of FY 2022-23, expatriate workers remitted a total of US$ 14,013.40 million, which is 4.28 percent more than the previous fiscal year. To curb the substantial depletion in foreign reserves due to heightened global commodity prices and widened balance-of-payment deficit, the government has taken many proactive steps to migrants to enhance remittance inflows. The government is incentivising remittances at the rate of 2.50 percent to reduce the increased cost of sending remittances legally and to encourage remittances through legal channels and also simplifying the process of sending and receiving remittances. Global Inflation Scenario fuel price hike have a huge impact. According to the IMF's ‘World Economic Outlook April 2023’, The global market system was severely disrupted inflation for 2023 is projected at 4.7 percent in by the imposition of various economic sanctions developed countries and 8.6 percent in on Russia by the Western world and Europe due developing countries. Table 3.1 and figure 3.1 to the Russia-Ukraine war. On the other hand, show the inflation trends of developed and there is instability in the currency market and developing countries from 2015 to 2022 and their there is a jump in commodity prices due to projections for 2023 and 2024: disruption of supply chain. In particular, food and Chapter 3-Prices, Wages and Employment | 19  Bangladesh Economic Review 2023 Table 3.1: Global Inflation (%) 2015 2016 2017 2018 2019 2020 2021 2022 2023* 2024* Inflation in Advanced 0.3 0.7 1.7 2.0 1.4 0.7 3.1 7.3 4.7 2.6 Economies Inflation in Emerging Market and Developing 4.8 4.4 4.5 4.9 5.1 5.2 5.9 9.8 8.6 6.5 Economies Source: IMF World Economic Outlook, April 2023 *Projected Figure 3.1: Global Inflation Source: IMF World Economic Outlook, April 2023 *Projected Inflation Scenario in Bangladesh projected in last January. Consumer Price Index The Ukraine-Russia war has led to a sharp rise and inflation during FY 2010-11 to FY 2021-22 in global fuel and food prices. As a result, are shown in Table 3.2 and the monthly inflation inflation is rising. According to the IMF's World rate for FY 2021-22 calculated on a point-to- Economic Outlook report April 2023, global point basis is presented in Table 3.3. inflation for 2023 is projected at 7.0 percent which is 0.4 percentage point higher than Table 3.2: Consumer Price Index and Inflation (Base Year 2005-2006) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 General 156.59 170.19 181.73 195.08 207.58 219.86 231.82 245.22 258.65 273.26 288.44 306.18 index (10.91) (8.69) (6.78) (7.35) (6.41) (5.92) (5.44) (5.78) (5.48) (5.65) (5.56) (6.15) Inflation Food 170.48 183.65 193.24 209.79 223.80 234.77 248.90 266.64 281.33 296.96 313.86 332.86 index (14.11) (7.72) (5.22) (8.56) (6.68) (4.90) (6.02) (7.13) (5.51) (5.56) (5.73) (6.05) Inflation Non- food 138.77 152.94 166.97 176.23 186.79 200.66 209.92 217.76 229.58 243.00 255.85 271.98 index (6.21) (10.21) (9.17) (5.55) (5.99) (7.43) (4.61) (3.74) (5.43) (5.85) (5.29) (6.31) Inflation Source: Bangladesh Bureau of Statistics (BBS). Table 3.2 shows that during the last 10 years, of percent and lowest in FY 2016-17 at 5.44 percent. inflation stood highest in FY 2010-11 at 10.91 Inflation rate stood at 6.15 percent in FY 2021- Chapter 3-Prices, Wages and Employment | 20 Bangladesh Economic Review 2023 22, which was 5.56 percent in FY 2020-21. In the keeping the supply chain intact and seamless, to FY 2021-22, the rate of food inflation was 6.05 alleviate the pressure of inflation ensuring the percent and non-food inflation was 6.31 percent. prices of daily necessities within the purchasing power of the people. Government approved a Table 3.3 shows that during FY 2022-23 (up to total of 2764 Metric ton rice (maximum 22 saling January 2023) national inflation increased from day in a month) for daily distribution through 7.48 percent in July 2022 to 8.57 percent in OMS from 17 October 2022 to 30 November January 2023. During this period, food inflation 2022 so that people can buy daily necessities at a decreased from 8.19 percent in July 2022 to 7.76 fair price. percent in January 2023. At the same time, non- food inflation increased from 6.39 percent in July 2022 to 9.84 percent in January 2023. The government has taken necessary steps, for Table 3.3: Monthly Rate of inflation Point to Point during FY 2022-23 (Base Year 2005-06=100) Type of July August Sept Oct Nov Dec January Level 2021-22 Inflation 2022 2022 2022 2022 2022 2022 2023 General 6.15 7.48 9.52 9.10 8.91 8.85 8.71 8.57 National Food 6.05 8.19 9.94 9.08 8.50 8.14 7.91 7.76 Non-food 6.31 6.39 8.85 9.13 9.58 9.98 9.96 9.84 General 6.42 8.02 9.70 9.13 8.92 8.94 8.86 8.67 Rural Food 6.51 8.79 9.98 8.95 8.38 8.23 8.11 7.92 Non-food 6.25 6.58 9.18 9.48 9.98 10.31 10.29 10.12 General 5.66 6.51 9.18 9.03 8.90 8.70 8.43 8.39 Urban Food 5.02 6.84 9.87 9.36 8.75 7.95 7.45 7.41 Non-food 6.38 6.15 8.42 8.66 9.07 9.54 9.51 9.48 Source: Bangladesh Bureau of Statistics (BBS). Wages Rate Index since 1974. Meanwhile, constructing WRI using base year FY 2010-11 has been initiated. The Previously BBS had been constructing Wage Rate WRI from FY 2013-14 to FY 2022-23, calculated Index (WRI) using FY 1969-70 as the base year with the new base year, is presented in Table 3.4. Table 3.4: Wage Rate Index and Growth Rate (Base Year 2010-11=100) Nominal Wage Rate Index Growth Rate ( Point to Point) Year General Agriculture Industry Service General Agriculture Industry Service 2013-14 118.82 118.44 119.07 120.16 5.50 5.68 4.97 5.75 2014-15 124.69 124.51 124.38 126.15 4.94 5.12 4.47 4.98 2015-16 132.81 132.48 132.02 136.03 6.52 6.41 6.16 7.86 2016-17 141.46 141.22 140.27 145.01 6.50 6.59 6.24 6.60 2017-18 150.59 150.27 149.45 154.44 6.46 6.40 6.55 6.51 2018-19 160.23 159.92 158.74 164.78 6.40 6.42 6.22 6.69 2019-20 170.39 170.28 168.24 175.33 6.35 6.48 5.99 6.41 2020-21 180.83 181.16 177.52 185.99 6.12 6.39 5.51 6.07 2021-22 191.80 192.21 187.83 199.42 6.06 6.10 5.85 6.32 2022-23* 202.68 203.03 198.60 209.40 6.91 6.84 6.98 7.15 Source: Bangladesh Bureau of Statistics (BBS). * Up to February 2023. Chapter 3-Prices, Wages and Employment | 21 Bangladesh Economic Review 2023 It is observed from the above table that Nominal economically active population above 15 years is Wage Rate Index (NWRI) has been increased by 7.34 crore. Out of this, male labour forces are an average of about 6.18 percent from FY2013- 4.75 crore and female 2.59 crore. As many as 14 to FY2022-23. The index for the FY 2022-23 7.08 crore people are engaged in a number of has increased to 202.68 points from 191.80 of the professions. Based on employment in different previous fiscal year. sectors of Bangladesh economy, 45.33 percent of the employed persons are working in agriculture The sector-wise analysis shows that sector-based sector, 37.65 percent of the employed persons in wage rate has increased on an average compared service sector, 17.02 percent of the employed to the previous fiscal year and the growth rate is persons in industry sector. 6.84, 6.98 and 7.15 percent respectively. The share of employed labour force above 15 Labour Force and Employment years by different sectors of the economy BBS conducts the Labour Force Survey (LFS) to according to the Labour Force Surveys 1995-96, assess the overall situation of employment. 1999-00, 2002-03, 2005-06, 2010, 2013, 2015-16 According to the latest survey LFS 2022 and 2016-17 is shown in Table 3.5. published in March 2023, the number of Table 3.5: Share of Employed Labour Force above 15 Years by Sector Sector LFS LFS LFS LFS LFS LFS LFS LFS 1995-96 1999-00 2002-03 2005-06 2010 2013 2015-16 2016-17 Agriculture, forestry and fishery 48.85 50.77 51.69 48.10 47.30 45.10 42.70 40.62 Mining & quarrying - 0.51 0.23 0.21 0.18 0.40 0.20 0.20 Manufacturing 10.06 9.49 9.71 10.97 12.34 16.40 14.40 14.43 Power, gas & water 0.29 0.26 0.23 0.21 0.18 0.20 0.30 0.20 Construction 2.87 2.82 3.39 3.16 4.79 3.70 5.60 5.58 Trade, hotel & restaurant 17.24 15.64 15.34 16.45 15.47 14.50 13.40 14.34 Transport, maintenance & 6.32 6.41 6.77 8.44 7.37 6.40 9.40 10.50 communication Finance, business & services 0.57 1.03 0.68 1.48 1.84 1.30 1.60 1.97 Commodities & personal services 13.80 13.07 5.64 5.49 6.26 6.20 6.20 6.08 Public administration and defense - - 6.32 5.49 4.24 5.80 6.20 6.08 Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Source: BBS, Labour Force Survey, 1995-96, 1999-00, 2002-03, 2005-06 , 2010 , 2013, 2015-16& 2016-17. Overseas Employment and Remittances the post-pandemic situation rebounds. It is expected that migrants will remit more of their Amid the challenges posed by the Covid-19 hard earned money through formal financial pandemic and global price hike induced from channel because of the higher exchange rate and Russia-Ukraine conflict, measures taken by the 2.5 percent cash incentive with various facilities. government and Bangladesh Bank to control To curb the substantial depletion in foreign imports and increase inflows of remittances are reserves due to heightened global commodity helping to ease the country’s foreign exchange prices and widened balance-of-payment deficit, reserve shrinkage. A record number of Bangladesh government and Bangladesh Bank Bangladeshi nationals have been going abroad as have taken many proactive steps to migrants to Chapter 3-Prices, Wages and Employment | 22 Bangladesh Economic Review 2023 soar remittance inflows. These measures include from Bangladesh. In the same time, remittance providing incentives for remittance senders and inflows showed upward trend and expanded by simplifying the process of sending and receiving 4.28 percent compared to the same period of the remittances. During the first eight months of previous fiscal year. Year-wise data of inward FY2022-23, number of emigrant workers from remittances sent by Bangladeshi expatriates is Bangladesh has increased significantly at the shown in Table 3.6 and Figure 3.2. number of about 7.34 lakh workers migrated Table 3.6: Number of Expatriate Employees and Amount of Remittance Amount of remittance No. of Employment FY Percentage Percentage Abroad (in thousand) In Million US$ Tk. In Crore Change % Change % 2012-13 441 14461.15 12.60 115646.16 13.51 2013-14 409 14228.30 -1.61 110582.37 -4.38 2014-15 462 15316.91 7.65 118982.32 7.60 2015-16 685 14931.14 -2.52 116856.72 -1.79 2016-17 905 12769.45 -14.48 101099.62 -13.48 2017-18 880 14981.69 17.32 123156.01 21.82 2018-19 693 16419.63 9.60 138007.00 12.06 2019-20 531 18205.01 10.87 154352.00 11.84 2020-21 280 24777.71 36.10 210130.6 36.14 2021-22 989 21031.68 -15.12 181580.5 -13.59 2021-22* 576 13438.53 -19.47 114890.5 -18.82 2022-23* 734 14013.39 4.28 136174.8 18.53 Source: BMET, Bangladesh Bank.* July-February. Figure 3.2 Manpower Export and Remittance Inflow 1200 30000 Employee number (Thousand) 989 1000 905 880 25000 734 Million USD 800 685 693 20000 576 600 530 15000 441 409 462 400 10000 280 200 5000 0 0 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2021-22* 2022-23* No. of employees abroad (000) Amount of remittance Source: BMET, Bangladesh Bank. *July-February In the FY 2021-22, the ratios of remittances to total exports which was 6.03 percent of GDP and GDP and remittances to export earning has 67.14 percent of total export earnings decreased as compared to the previous financial respectively in FY 2020-21. Remittances as year. In FY 2021-22, remittances accounted for percent of GDP and as percent of total export about 4.56 percent of GDP and 42.71 percent of earnings are shown in Table 3.7 and Figure 3.3. Chapter 3-Prices, Wages and Employment | 23 Bangladesh Economic Review 2023 Table 3.7: Remittance as Percent of GDP and Export Earnings Indicator 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Remittances as 9.64 8.23 7.87 5.63 5.11 4.66 4.67 4.87 6.03 4.56 percent of GDP Remittances as percent of total 54.43 47.13 49.08 43.59 37.54 41.29 41.46 56.68 67.14 42.71 Export Earnings Source: Bangladesh Bank, BBS. Figure 3.3: Remittances as percent of GDP and Export Earnings 80.00 67.14 70.00 54.43 56.68 60.00 49.08 47.13 50.00 43.59 41.29 41.46 42.71 37.54 40.00 30.00 20.00 9.64 8.23 7.85 5.63 5.11 4.66 4.67 4.87 6.03 4.56 10.00 0.00 As percentage of GDP As percentage of Export Earnings Source: Bangladesh Bank, BBS. Expatriates Classified by Country The statistics of expatriates classified by skill compared to the migration of professional groups is shown in Table 3.8. It is seen that the workers in the last few years. rate of skilled worker migration is satisfactory Table 3.8: Number of Expatriates Classified by Country Year Professional Skilled Semi-skilled Less-skilled Total 2012 36084 173331 104721 293662 607798 2013 689 133754 62528 212282 409253 2014 1730 148766 70095 205093 425684 2015 1828 214328 91099 248626 555881 2016 4638 318851 119946 303706 757731 2017 4507 434344 155569 401796 1008525 2018 2673 317528 117734 283002 734181 2019 1914 304921 142536 250788 700159 2020 378 61690 9412 146189 217669 2021 824 129057 19870 467458 617209 2022 3640 252362 42771 837100 1135873 Source: Bureau of Manpower, Employment and Training, Ministry of Expatriates’ Welfare and Overseas Employment Chapter 3-Prices, Wages and Employment | 24  Bangladesh Economic Review 2023 Table 3.8 and Figure 3.4 (a) and 3.4 (b) show that percent respectively of the total manpower in 2010, the share of skilled and professional export, which stood at 22.22 percent and 0.32 expatriates was about 23.19 percent and 0.09 percent in 2022. Figure 3.4 (a) Category wise Migration: 2010 Figure 3.4 (b) Category-wise Migration:2022 professional professional o.32% skilled 0.09% skilled 22.22% 23.19% semi-skilled semi-skilled 5.13% 3.77% less-skilled less-skilled 71.59% 73.69% Source: BMET, MoEWOE. Country wise Manpower Export and many as 6,12,418 Bangladeshi workers migrated Remittances to KSA which was 53.92 percent of total Due to removal of global movement restrictions migration, followed by Oman (15.81 percent), for COVID-19, most of the Bangladeshi UAE (8.96 percent), Singapore (5.67 percent) expatriates migrated to KSA followed by Oman and other countries (6.13 percent). The number and UAE. Total 213572 workers were migrated of Bangladeshi expatriates by country duration in during 2023 (up to February 2023) according to FY 2012-23 (up to February 2023) has shown in the data of Bureau of Manpower, Employment Table 3.9 and figure 3.6(a) and 3.6(b) have and Training, Bangladesh (BMET). Country-wise shown the number of Bangladeshi expatriates by data on migration during 2022 showed that as country since 2012 and 2022. Table 3.9: Number of Expatriate Bangladeshi Workers by Country Saudi Year Kuwait UAE Bahrain Oman Qatar Lebanon Jordan Others Total Arabia Malaysia Singapore 2012 21232 2 215452 21777 170326 804 58657 28801 14864 11726 64157 607798 2013 12654 6 14241 25155 134028 3853 60057 57584 15098 21383 65194 409253 2014 10657 3094 24232 23378 105748 5134 54750 87575 16640 20338 74138 425684 2015 58270 17472 25271 20720 129859 30483 55523 123965 19113 22093 53112 555881 2016 143913 39188 8131 72167 188247 40126 54730 120382 15095 23017 52735 757731 2017 551308 49604 4135 19318 89074 99787 40401 82012 8327 20449 44110 1008525 2018 257317 27637 3235 811 72504 175927 41393 76560 5991 9724 63082 734181 2019 399000 12299 3318 133 72654 545 49829 50292 4863 20347 86879 700159 2020 161726 1744 1082 3 21071 125 10085 3608 488 3769 13968 217669 2021 457227 1848 29202 11 55009 28 27875 11158 235 13816 20800 617209 2022 612418 20422 101775 10 179612 50090 64383 24447 858 12231 69627 1135873 2023* 85319 4851 14575 1 31925 54314 6961 4202 283 647 10494 213572 Source: Bureau of Manpower, Employment and Training.*up to February 2023. Chapter 3-Prices, Wages and Employment | 25 Bangladesh Economic Review 2023 The overseas labour market of Bangladesh is Saudi Arabia in 2012 were only 3.49 percent of continuously changing. In last decades manpower the total manpower exports, but in 2022 it export shows a significant change. Figure 3.5 (a) increased to 53.92 percent. Manpower exported and 3.5 (b) show that in 2012, 35.45 percent of in Oman was 28.02 percent of total manpower total overseas employment was in United Arab export in 2012 which is declined to 15.81 percent Emirates (UAE) which decreased to 8.96 percent in 2022. Manpower exports to Qatar and in 2022. On the other hand, manpower exports to Singapore declined in 2022 compared to 2012. Figure 3.5 (a): Overseas Employment by Figure 3.5 (b): Overseas Employment by Countries in 2012 Countries in 2022 Singapore 5.67% Jordan Malaysia Lebanon 1.93% Others Oman 4.41% 2.45% 10.56% 15.81% Qatar Qatar 2.15% 4.74% Saudi Arabia UAE Singapore 3.49% 8.96% Lebanon 9.65% 0.08% Kuwait Jordan Malaysia 1.08% 1.80% 0.13% UAE Oman 35.45% Others 28.02% 6.13% Saudi Arabia 53.92% Bahrain 3.58% Source: BMET, MoEWOE, Bangladesh Bank. percent, followed by UAE (13.5 percent), UK (8.9 The lion’s share of inward remittance to percent), Kuwait (7.3 percent) and Qatar (6.8 Bangladesh has been received from the Middle percent). The comparative statistics on country- East countries. In FY2022-23 (July-February), the wise share (percent) of inward remittances and highest share of remittance came from the USA country-wise remittances sent by Bangladeshi which was 17.8 percent of total remittances. expatriates from FY 2012-13 to FY 2022-23 (Up to Country-wise data on remittance inflows in February 2023) are shown in Table 3.10 and FY2022-23 shows that KSA is the 2nd highest Figure 3.6. amount of remittance sender country which is 17.7 Chapter 3-Prices, Wages and Employment | 26  Bangladesh Economic Review 2023 Table 3.10: Country-wise Remittances (In million USD) FY KSA UAE Qatar Oman Kuwait Bahrain USA UK Malaysia Singapore Others Total 2012-13 3831.9 2829.4 286.9 610.1 1186.9 361.7 1859.8 991.6 997.4 498.8 1006.7 14461.2 2013-14 3119.6 2684.9 257.5 701.1 1106.9 459.4 2323.3 901.2 1064.7 429.1 1180.6 14228.3 2014-15 3345.2 2823.8 310.2 915.3 1077.8 554.3 2380.2 812.3 1381.5 443.4 1272.9 15316.9 2015-16 2955.6 2711.7 435.6 909.7 1040.0 490.0 2424.3 863.3 1337.1 387.2 1376.6 14931.1 2016-17 2267.2 2093.5 576.0 897.7 1033.3 437.1 1688.9 808.2 1103.6 300.9 1563.1 12769.5 2017-18 2591.6 2430.0 844.1 958.2 1199.7 541.6 1997.5 1106.0 1107.2 330.2 1875.6 14981.7 2018-19 3110.4 2540.4 1023.9 1066.1 1463.4 470.1 1842.9 1175.6 1197.6 368.3 2160.9 16419.6 2019-20 4015.2 2472.6 1019.6 1240.5 1372.2 437.2 2403.4 1364.9 1231.3 457.4 2190.7 18205 2020-21 5721.4 2440.0 1450.2 1535.6 1886.5 577.7 3461.7 2023.6 2002.4 624.9 3053.7 24777.7 2021-22 4542.0 2071.9 1346.5 897.4 1689.6 566.6 3438.4 2039.2 1021.9 385.2 3033.1 21031.7 2021-22* 3108.8 1082.3 894.4 607.6 1092.0 363.0 2207.4 1239.2 675.8 262.5 1905.5 13438.5 2022-23* 2480.1 1896.5 948.7 438.6 1019.3 319.1 2497.2 1248.3 732.3 252.2 2181.1 14013.4 Source: BMET, MoEWOE. Bangladesh Bank. *July-February. Figure 3.6: Comparison for percentage of Country-wise Remittance inflows in FY 2012-13 and FY 2022-23* 50.0 45.0 40.0 26.5 Percentage 35.0 30.0 19.6 17.8 17.7 25.0 15.6 13.5 12.9 20.0 8.9 15.0 8.2 7.0 6.9 6.9 6.8 5.2 4.2 3.4 10.0 3.1 2.5 7.3 2.0 1.8 5.0 0.0 2012-13 2022-23* Source: BMET, MoEWOE, Bngladesh Bank. *up to February 2023 Steps Taken to by the government Boost up may be used for online payments of visa Foreign Employment and Remittances processing fees. In this context Authorized Dealers (ADs) may issue international cards in Government has taken several necessary the name of officials designated by nominated measures to explore new labour market and to agents ensuring the observance of the instructions enhance the flow of remittance. Some of the of GFET. initiatives are: a) Remittances on account of visa processing b) Inward wage remittances by Mobile fees by resident agents through International Financial Service Providers (MFSPs): Card: To bring wider flexibility in the case of getting To facilitate smooth transactions, it has been remittance, licensed MFSPs will be allowed to decided that international cards (debit/prepaid) Chapter 3-Prices, Wages and Employment | 27 Bangladesh Economic Review 2023 repatriate wage earners’ remittance in association female workers sent abroad in 2022 was with internationally recognized online payment 1,05,466. gateway service providers /banks/digital wallets/card schemes and/or aggregators abroad e) Skill Development (hereinafter referred to as approved/licensed The demand of skilled workers is higher than that foreign payment service providers, foreign of less skilled workers. The government is very PSPs). In this context, MFSPs shall have much concerned to enhance the standard of skill standing arrangements with foreign PSPs to and strengthen the facilities of training to receive foreign currency in their account and increase the skilled migration. At the same time, equivalent Taka amount will be credited to the initiative has been taken to coordinate the wage earners’ MFS accounts. Subsequently activities of training and vocational institutions. foreign PSPs shall provide credit to the In 2022, Bureau of Manpower, Employment and designated AD’s nostro account. After receiving Training, imparted skill development training to amount in Taka, wage earners’ can use the MFS 10,69,958 trainers in different trades through 6 account from abroad to do all transactions in Institutes of Marine Technology and 89 Taka. Technical Training Centers. Considering the importance of skill training, government has plan c) Expansion of Labour Market to establish Technical Training Centers at The Middle-east is the main labour market for upazilla levels. A project is being implemented to Bangladesh. In the context of recent political establish 41 training centers at upazilla levels. turmoil in this region, the Government has taken Another project to establish 50 TTC’s is under initiatives to target other destinations in different approval process. To improve training quality regions of the world. MoU has been signed with and getting international recognition, 357 Japan for sending workers in housekeeping instructors have been given foreign training. profession. MoU has also been signed with Training arrangements have been launched in Greece, Maldives and Brunei for sending partnership with Saudi Arabia and Hong Kong so workers. Besides, market analysis has been done that women workers are trained and directly got through a firm for 53 potential countries. foreign employment. f) Modernisation of Emigration Process d) Reduction of Migration cost To reduce the fraudulent activities of the The main challenge in migration process in recruiting agencies and brokers, a database of Bangladesh is high migration cost. Government migrant workers with digitized fingerprints has is trying to keep the migration cost at minimum been established. Emigration clearance is being level. The government has fixed Country provided with a smart card by using database Specific Maximum migration cost for the main network. The hassles and deception of the destination countries. The only state owned outbound workers could have been reduced at the recruitment company, Bangladesh Overseas airports with their information recorded in the Employment and Services Ltd (BOESL) is smart card. engaged in sending workers abroad at zero or g) Policy formulation for Migration minimum migration cost. Female workers are Governance being employed in Saudi Arabia, Qatar, Lebanon, Jordan without any migration cost. Mandatory To bring discipline in migration governance, the two-month training course has been introduced government enacted Overseas Employment and for domestic female workers. Total number of Migrant Act, 2013 and adopted Expatriates’ Welfare and Overseas Employment Policy-2016. Chapter 3-Prices, Wages and Employment | 28 Bangladesh Economic Review 2023 The recruiting agencies play an important role in formal financial channel because of the higher migration sector. To ensure their transparency exchange rate and 2.5 percent cash incentive with and accountability, the government has various facilities. introduced Overseas Employment and Migrant i) Cash assistance against remittances received (Recruiting Agent Licence and Conduct), Rules, by members of the armed forces from UN 2019 and Overseas Employment and Migrant peacekeeping missions (Recruiting Agent Classification) Rules, 2020. For the welfare of the migrant workers, The government announced 2 percent cash mandatory insurance scheme has been adopted incentive for the first time for inward foreign since 2019. The government provides 2.5 remittance through banking channel which percent incentives on remittances sent in legal became effective from 1 July 2019. Cash channel. Policy on Health Examination of incentive for inward remittances has been Aspirant Migrant Workers (Revised), 2022 has increased to 2.5 percent from 2 percent which been formulated. became effective from 1 January, 2022. Moreover, it has been decided that the United h) Increase of the rate of cash incentive Nations peace keeping mission officials of against wage earners' remittance through army/navy/air-force/police who are stayed abroad legal channel in different countries of the world would get the During the COVID-19 pandemic, government cash incentive against wage earners' remittance at and the Bangladesh Bank took several 2.5 percent from existing 2 percent for their accommodative measures for simplification and foreign currency to be remitted through banking encouragement of the remittance inflows through channel into the country which became legal channels. It is expected that migrants will applicable from 1 January, 2022. remit more of their hard earned money through Chapter 3-Prices, Wages and Employment | 29 Bangladesh Economic Review 2023 Annexure: 3.1 Steps Taken to Improve Employment Situation Ministry of Labour and Employment plays an effective role to establish labour rights particularly fixing fair wage, ensuing safe work placed environment occupational safety and health as well as enhancing productivity and economic development through maintaining peace and stability in the industries. Besides this ministry works for enforcement of Labour Laws achieve the sustainable development goals (SDGs) such as elimination of child labour ensuring decent work environment and equal pay for equal work. Under this purview the government has undertaken some pragmatic steps in order to ensure the welfare of workers which are stated below: (a) Regular Activities Inspection: The objective of the Department of Inspection for Factories and Establishments (DIFE) is to create an investment-friendly environment by ensuring a decent, safe and healthy workplace and establishing the workers’ safety and rights. Inspection is one of the fundamental tasks of DIFE. To implement the Bangladesh Labour Law and Bangladesh Labour Rules by inspecting factories and establishments is a vital job of DIFE. In FY 2021-22, a total of 43,644 inspections were completed in the factories and establishments and a total of 32,872 inspections were completed till February of FY 2022- 23. generation of employment and skilled manpower, and fixation of minimum wages. Moreover, the Ministry of Labour and Employment leads to changed situation, formulation and implementation of National Labour Policy, and amendment of labour Laws in line with Complaints Received and Disposal of Complaints: Complaints are disposed within the fastest time after receiving complaints from the workers regarding violations of Bangladesh labour law and Bangladesh labour rules in the workplace. In FY 2021-22, DIFE received a total of 3604 complaints and all the complaints were disposed of in relevant consideration. In addition, until February 2023 of FY 2022-23, DIFE received a total of 3081 complaints and a total of 2951 complaints were disposed of in relevant consideration. Cases Filed at Labour Courts: To create a decent workplace in the factories and establishments, DIFE implements Bangladesh Labour Law and Bangladesh Labour Rules. In FY 2020-21, a total of 1,421 cases were filed and of which 490 cases were disposed. In addition, total 1426 cases were filed and of which 682 cases were disposed as of February in FY 2021-22. Ensuring Maternity Welfare Benefits: According to the labour law, DIFE ensures maternity benefits for female workers in the factories and establishments. In FY 2020-21 maternal welfare benefits have been ensured for a total of 12,664 workers. For this, the amount of financial benefit provided to the workers by the employer is Tk. 47.11 crore. In FY 2022-23 maternal welfare benefits have been ensured for a total of 8075 workers till February 2023 and the amount of financial benefits provided to the workers by the employer is Tk. 49.30 crore. Establishment of Child Care Centres: To empower women and enhance women's participation in the workplace, DIFE has been playing a vital role. The Department has been working for ensuring women- friendly workplaces. Child care centres are being set up in factories and establishments under the direct supervision of DIFE. In FY 2021-22 DIFE set up 515 child care centres and a total of 219 children's rooms till February of FY 2022-23. Chapter 3-Prices, Wages and Employment | 30 Bangladesh Economic Review 2023 Issuance and Renewal of License: In FY 2021-22, DIFE issued licenses to 10,568 factories and renewed 36,786 others. In addition, until February of FY 2022-23, DIFE issued licenses to 4,396 factories and renewed 26,093 others. Increase Compliance Factory: A factory considered as a compliance factory when that factory is included in the 'A' category in performing the provisions of the inspection checklist. Compliance factories comply with the occupational health and safety-related provisions of the Bangladesh labour law and Bangladesh labour rules. DIFE ensured such compliance in 1,336 factories and establishments in FY 2021-22 and in 1,068 factories and establishments until February in FY 2022-23. Compensation for Deaths and other Accidents: Except regular inspections, Inspectors also inspect an area in case of an accident at any workplace. Through inspection proper advice is given to the factory owners and find out probable causes of the accident. In addition, the Special Investigation Committee is constituted to investigate any particular accident. Necessary steps are taken reviewing the investigation report of accident. DIFE arranged to give Tk. 3.17 crore to the 180 injured and 146 dead workers or their families in FY 2021-22. In addition, until February of FY 2022-23 DIFE arranged to give Tk. 68.45 lakh to the 34 injured and 35 dead workers or their families Formation of Safety Committee: Safety committee formation activities are going on to ensure safe working conditions in the factory. DIFE formed 1107 safety committees in different factories and establishments in the FY 2021-22. As of February 2023 in FY 2022-23, a total of 6,497 safety committees were established in different factories and establishments under the supervision of DIFE. (b) Special Activities Digital Inspection System: The introduction of digital inspection is a major initiative to bring more transparency, accountability and dynamism in factory and establishment inspection activities. For this, an app called Labor Inspection Management Application (LIMA) has been created on 6 March 2018. It is simultaneously a mobile and website based application, through which all the important activities of the department are performed. The International Labour Organization (ILO) is providing assistance in this initiative. National Occupational Health and Safety Research and Training Institute: The construction of National Occupational Health and Safety Research and Training Institute (NOHSRTI) under Directorate of Factory and Establishment Inspection at Terkhadia, Rajshahi is at final stage with a view to carrying out training and research on occupational health and safety. Research and imparting training on occupational health and safety will be facilitated through this institute of international standard. Performing seminars, symposiums, discussion programs and various media campaigns have been planned to create awareness among all stakeholders on occupational health and safety across the country. "OSH Unit" has been formed in the institute for implementing this culture. Women Development and Training: The construction work of 2 dormitories having 960 seats in Kalurghat, Chattogram and 620 seats in Bandor Narayanganj has been completed to introduce safe secure housing facilities for female workers in garments and other industries. Innovative and Digital Activities: All the factories/establishments has to get approval for factory layout plan and factory/establishment license from the department as per Bangladesh Labor Act. Chapter 3-Prices, Wages and Employment | 31 Bangladesh Economic Review 2023 Applications for approval of factory layout plan and applications for obtaining license of factory/establishment are fully online based through Labor Inspection Management Application (LIMA) software. To deposit the license fee to any bank is not needed now. Since the launch of LIMA in 2018 till February 2023, a total of 5968 new licenses have been issued through the software, 1554 factory layout plans have been approved and 4016 licenses have been renewed. In line with Government’s Digital Bangladesh campaign, the department of Labour has launched online Trade Union Registration Service and the ‘Publicly Accessible Database’ an online database, to make easy access of major services imparted by the department of labour. In DIFE one click reporting system, all Deputy Inspector Generals at the field levels enter the login page of the reporting system from their respective offices and complete the reporting work in the prescribed template/column based on the demand from the head office. Moreover, to make the services easier and more available to the labourers a mobile application name ‘Sramiker Shastho Kotha’ has been launched. Besides, hot-line service has been launched to provide quick resolution of any complain related to labour and labourers and anti-union discrimination. In addition, cash grants from Bangladesh Labour Welfare Foundation and Central Fund of Ministry of Labour and Employment are being disbursed through mobile banking to the beneficiary labours and their families. Reform Activities for Labour Welfare: In order to expand and strengthen social welfare of the workers and their family members living in 03 hilly districts of the country, improve their professional skills, establish worker's rights in the workplace including overall socio-economic development, a multi- purpose complex construction project during the period from 01 April 2017 to 30 June 2022 has been implemented at Ghaghra in Rangamati. To ensure low-cost safe and healthy accommodation and to increase the productivity for working women through social empowerment, women's labor hostels and labor welfare centers with 05-bed medical center facilities during the period from April 01, 2018 to June 2022 has been implemented at Narayanganj port and Kalur Ghat of Chittagong. 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