Is black money being repatriated through remittances? CPD asks

The US has replaced Saudi Arabia as the foremost source of remittance for Bangladesh in the last 10 months. The Centre for Policy Dialogue has drawn attention to this phenomenon, terming it as "unusual," and raising the question of whether black money is being whitewashed as remittances.

CPD Executive Director Dr Fahmida Khatun made the observation at a media briefing titled "State of the Bangladesh Economy in FY2022-23 (Third Reading)" held at the think tank’s office in Dhanmondi of the capital on Saturday.

"The trends in remittance flows do not match the growing number of migrant workers leaving for overseas job markets and consequently the trends in sources of remittance flows raise serious concerns," CPD's presentation reads. 

Mentioning that the number of people going abroad for work during the first 10 months of FY23 was quite high, the presentation adds, "Majority of these people went to the Gulf countries, but the remittance flows from this region did not match this rising number.

"The US has replaced Saudi Arabia as the foremost source of remittance in this period. CPD has drawn attention to this new phenomenon in its previous IRBD."

Despite 12.3 lac people going to Saudi Arabia during January 2021- April 2023 (56.9 per cent of the total of 21.5 lakh during this period), remittance from Saudi Arabia has come down from 3.86 billion in FY22 (July-April) to 3.04 billion in FY23 (July-April) while that from the US increased from 2.87 billion to 3.05 billion over the corresponding period, CPD data shows.

Referring to this data, Dr Fahmida said, "This is quite unusual, it does not happen. We know where most of our remittances come from.

"In the last 10 months, 9.22 lakh migrant workers went to gulf nations. Remittances from there is not matching expectations. There is a mismatch between the number of people going there and the remittances coming to the country."

She also said, "There is a possibility that black money is being repatriated through remittances. People are taking advantage of the 2.5 per cent incentive or subsidy placed on remittances. Authorities should get to the bottom of this."

The CPD presentation also reads, "the likelihood of transfer through hundi/hawala as also repatriation of money to take advantage of incentives provided for remittance flows and the scope of whitening of black money taken out of the country illegally via the remittance route should come under proper scrutiny by concerned authorities, and appropriate steps ought to be taken to deal with the emergent scenario. "