Photo: Collected
Remittances, which play an important role in the country’s supply of foreign currency, its balance of external payments and the livelihoods of expatriate families, are one of the main lifelines of Bangladesh’s economy. Amid the long-running geopolitical crisis in the Middle East, the recent attack by Yemen’s Houthi rebels on the Saudi capital Riyadh has created fresh concern over that lifeline. The security risks surrounding the attack and the suspension of flights have already caused direct hardship to about 3.5 million expatriates working in Saudi Arabia and to people travelling to the country. If the crisis is not resolved quickly, manpower exports could be disrupted on the one hand, while on the other the flow of the country’s remittances could face major uncertainty in the long term.
A review of the scale of remittance flows from the top source countries also shows ample justification for this concern and a hint of future uncertainty. According to Bangladesh Bank data, 47.45 per cent of the country’s total remittances come from 13 Middle Eastern countries — Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain, Oman, Yemen, Iraq, Iran, Jordan, Lebanon, Syria and Turkey. Of these, the six Gulf Cooperation Council (GCC) countries alone — Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman — account for 46.27 per cent of total remittances. The risk that a large share of the country’s remittances could be jeopardised if the Middle East crisis drags on therefore cannot be ruled out.
According to central bank data, Saudi Arabia has become the largest source of Bangladesh’s remittances among these countries. From July to September of the current financial year the country received a total of $8.59 billion in remittances, of which $1.65 billion came from Saudi Arabia — that is, 19.2 per cent of total remittances. In the same period of the last financial year about $1.23 billion came from the country, meaning remittances from Saudi Arabia rose by about 34 per cent in a year. While expatriates sent home $7.58 billion in the first quarter of the 2025-26 financial year, Saudi Arabia alone accounted for $5.85 billion. Although that upward trend has continued this year as well, the Middle East crisis could break the run if the Houthi attacks are not halted, the security risks are not removed and the disruption to flights is prolonged.
Against this backdrop, economists have advised placing emphasis on diversifying the labour market and ensuring workers’ safety in the long term, alongside immediate steps to increase remittances. Dr Mustafa K Mujeri, former chief economist of Bangladesh Bank, told Ajker Patrika that remittances sent by expatriates are in the most positive state among the country’s macroeconomic indicators, and that Saudi Arabia is a major source country; any uncertainty there is bound to have an adverse effect on remittances and thus on the country’s economy. He believes the government must take effective steps now on how to handle the situation and must also look for new source countries for remittances.
Policy support from the government and the central bank is playing an important role in increasing remittances. At present the government gives a cash incentive at a rate of 2.5 per cent on money sent through legal banking channels, which is encouraging expatriates to send money through legal routes.
At a programme on Tuesday, State Minister for Expatriates’ Welfare and Overseas Employment Md Nurul Haque said a pilot programme to introduce an expatriate card has begun in several countries, including in the Middle East, to increase the flow of remittances. The card will carry all kinds of facilities and can also be used for financial transactions; the government also plans to give a 3 per cent incentive on remittances sent through legal channels.
According to economists, the growth in remittances cannot be sustained in the long term merely by raising incentives. It is also essential to make sending money through legal channels easier, to maintain stability in the exchange rate, to improve the skills of workers wishing to go abroad and to create new labour markets.
