E.g., 12/05/2020
E.g., 12/05/2020

COVID-19 Pandemic Profoundly Affects Bangladeshi Workers Abroad with Consequences for Origin Communities

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COVID-19 Pandemic Profoundly Affects Bangladeshi Workers Abroad with Consequences for Origin Communities

Bangladeshi migrants in Egypt wait to return home

Bangladeshi migrants in Egypt wait to return home. (Photo: Stabilisation Unit/DFID)

With nearly 8 million of its 160 million residents living abroad, Bangladesh has one of the world’s largest emigrant populations, ranking only behind India, Mexico, China, Russia, and Syria, according to estimates from the United Nations’ Population Division. As temporary workers who head overwhelmingly to the Gulf Cooperation Council (GCC) countries, Bangladeshi migrants remit much of their savings back home every month.

Their contributions form a crucial lifeblood for Bangladesh, which in recent years has reduced poverty, fashioned itself into one of South Asia’s economic success stories, and has been on track to exit the United Nations list of least developed countries by 2024. Yet the country, which is situated in a low-lying delta, has seen its advances hamstrung in part by persistent exposure to the adverse effects of climate change and frequent natural calamities, including cyclones and typhoons that have killed thousands over recent decades. At the same time, Bangladesh has responded to one of the largest contemporary humanitarian crises, receiving 1.1 million Rohingya who have fled neighboring Myanmar.

The COVID-19 pandemic is adding to these challenges. As the coronavirus outbreak has spread rapidly around the globe, the Bangladeshi government has struggled to combat it. The public-health crisis has been exacerbated by the economic ripple effects resulting from the pandemic-induced difficulties faced by Bangladeshis working abroad: Large-scale job loss, salary reductions, and increase in deportations from the GCC. The migrant workers’ sudden loss of income and unexpected financial precarity have profound consequences for their families and communities, with remittances that normally equal nearly one-third of Bangladesh’s national budget now predicted to fall significantly.

This article sheds light on the pandemic-generated disruptions for the approximately 4.2 million Bangladeshi migrants working in the GCC states and the implications for their family members and the broader Bangladeshi economy.

The Migration of Bangladeshi Contract Laborers to the GCC States

Historically, the people of Bangladesh were not prone to migrate abroad, and instead the region—which was a part of the British Empire and then the dominion of Pakistan before its independence in 1971—received multiple waves of migrants from different countries, including the Middle East. This is why the Bengali people do not have a single ethnic background, and are instead of a mixed heritage. Migration from what is now Bangladesh to the Persian Gulf region was almost nonexistent before the 1930s, when British colonial rulers recruited laborers to their oil fields, and did not become large-scale in nature until the 1970s. Following the formation of the Organization of Petroleum Exporting Countries (OPEC) and then the 1973 oil crisis, the phenomenal rise in oil prices sparked a wave of regional development projects and industrialization, generating huge demand for temporary migrant laborers. A migration boom followed, although the initial number of arriving Bangladeshis was modest, with just 6,087 such migrants in 1976. Migration to the region ballooned in subsequent years, particularly of laborers from South Asia.

Since Bangladesh gained its independence in 1971, more than 77 percent of Bangladeshi migrants headed to the GCC states—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE)—which are heavily reliant on foreign labor (see Figure 1). The government does not maintain data on these migrants’ return.

Figure 1. Overseas Employment of Bangladeshi Workers by Country, 1976-2019

Source: Bangladesh Bureau of Manpower, Employment, and Training (BMET), “Country Wise Overseas Employment from 1976 to 2019 (Up to Dec.),” accessed July 7, 2020, available online.

As per the estimates of Gulf Labor Markets and Migration (GLMM) program, 4.2 million Bangladeshi migrants lived in the GCC states in recent years, half of whom were in Saudi Arabia (see Figure 2). Bangladeshi migrants are believed to be the second largest group in the GCC region, behind migrants from India. Most of them are unskilled and from the most poverty-ridden regions of Bangladesh. Almost all of them are contract migrants, meaning they return after a fixed tenure typically lasting between three and ten years.

Figure 2. Bangladeshi Nationals in GCC Countries*

* The estimates here vary by country for the years 2015-18.
Note
: The number for Saudi Arabia is the upper estimate.
Sources: The data for Saudi Arabia, for 2017-18, Gulf Labour Markets, Migration, and Population Programme (GLMM), Demography, Migration, and Labour Market in Saudi Arabia, available online; data for Oman, for 2017, GLMM, Demography, Migration, and the Labour Market in Oman, available online; data for the United Arab Emirates, for 2015, GLMM, Demography, Migration, and the Labour Market in the UAE, available online; data for Kuwait, for 2018, GLMM, Demography, Migration, and the Labour Market in Kuwait, available online; data for Qatar, for 2015-16, GLMM, Demography, Migration, and the Labour Market in Qatar, available online; data for Bahrain, for 2018, GLMM, Demography, Migration, and the Labour Market in Bahrain, available online.

The Bangladesh Bureau of Manpower, Employment, and Training (BMET) and other government entities do not maintain data on returnees, a population that could be substantial, given the increase in deportations by Gulf countries as well as a move by stranded migrants to return home amid the pandemic. The International Organization for Migration (IOM) said in May it anticipated a few hundred thousand Bangladeshi migrants would return home from various labor-receiving countries once airlines resume regular flights and countries relax COVID-19-related border restrictions. “For many of these migrants, it isn't a happy homecoming as they have lost their source of income and due to the global recession, it is unlikely that they will be able to return to work abroad until the global labor market recovers from the impacts of the COVID-19 pandemic," said Giorgi Gigauri, chief of the IOM mission in Bangladesh.

The Pressure for Repatriation

Low-paid contract migrants in the Gulf often live in squalid, overcrowded, and unhygienic dormitories with inadequate access to sanitation. These sorts of conditions have long been the target of criticism by human-rights groups and are particularly ripe for spreading the novel coronavirus. In Saudi Arabia, where migrants account for 38 percent of the population, the Ministry of Health reported on May 5 that 76 percent of new confirmed cases were among foreigners. Saudis have lower rates of infection in part because they have better living conditions and a stronger safety net.

As a consequence of the pandemic, migrants have lost their jobs across a range of sectors, including aviation, tourism, transportation, retail, hospitality, amusement, and street vending. Many migrants have been laid off by their companies. Unauthorized migrants have found their position even more vulnerable than before. Regardless of their legal status, migrants have been trapped by circumstance, and many are in the pipeline to be returned to their countries of origin. According to public reports, around 200,000 Bangladeshi migrants returned from around the world between the beginning of January and March 21, when Bangladesh’s government suspended flights. International flights between Bangladesh and the Gulf states restarted on June 16, and government officials expected that thousands more laborers would be repatriated as regular flights resume. The Gulf states are mounting the pressure for deportation day by day.

The migrants face segregation and confinement at both ends. In their host countries, they are treated as an unwanted underclass, and when they return to Bangladesh they are isolated socially and ostracized by neighbors who fear they are COVID-19 carriers. Due to superstitious norms, villagers often stigmatize returning migrants even after they undergo a quarantine period. Bangladesh has very limited institutional quarantine facilities which are already overwhelmed, so almost all returning migrants must instead isolate themselves amid those communities.

Beyond COVID-19

In addition to the pandemic, two other factors reinforce the migrants’ peril: the plunge of oil prices and the nationalization policies of the Gulf states. The U.S. Energy Information Administration has predicted that the average price of Brent crude oil, the international benchmark, will fall from U.S. $64 per barrel in 2019 to U.S. $41 in 2020. The 13 countries of OPEC also reached an agreement with Russia to continue sweeping production cuts, suggesting oil producers are anxious about the market. And the halt to mobility created by COVID-19 lockdowns has led to changes in consumer habits and a reduction in pollution that could accelerate lasting efforts to halt reliance on fossil fuels.

If the past is precedent, this could have a dramatic impact on migrant workers in the Gulf. The drop in oil prices in 2014 affected the Gulf economies as well as foreign nationals living there. It spurred a series of policy changes affecting foreign workers, the most consequential of which was the revitalization of the “nationalization” of jobs in certain sectors. For example, Oman blocked foreigners from 80 job categories and Saudi Arabia, under its “Saudization” campaign, obligated the employment of nationals in the retail and hospitality sectors. The effect extended as far as construction workers. As many as 700,000 foreign workers, many of them low-wage contract laborers, left Saudi Arabia alone during 2017 and 2018. Bangladesh’s mission in Saudi Arabia predicted in May that as many as 1 million Bangladeshi migrants could be deported over the next three to five years.

Impact on Bangladesh’s Economy and Migrants' Families

The number of migrants repatriated to Bangladesh will vary depending on the duration of the pandemic, the severity of its economic impacts, and resulting policies enacted by migrant-destination countries. What is certain is that remittances will be severely affected. According to BMET, Bangladesh received U.S. $18.3 billion via remittances sent via formal channels in 2019, 73 percent of which came from the GCC countries. Remittances are the second largest source of foreign earnings in Bangladesh. To emphasize how crucial this financial flow is, remittances in 2019 were the equivalent of 30 percent of the national budget of U.S. $62 billion, or 6 percent of the country’s U.S. $302.6 billion gross domestic product.

These remittances have suffered during lockdowns intended to halt the COVID-19 pandemic. Year-on-year remittances tumbled by 25 percent in April 2020, and that month the World Bank predicted that South Asian countries might face a 22 percent decline in remittances during 2020, as part of a global drop that it called “the sharpest decline in recent history.” Those estimates could be further refined as the pandemic persists. Under a worst-case scenario, remittances to nearby Pakistan could fall by as much as 50 percent, predicted Kashif Majeed Salik at the Sustainable Development Policy Institute; considering migrants’ changing legal conditions and working environment, Bangladesh may face a similar fate. This trend is already being seen in remittance receipts maintained by the central bank of Bangladesh.

At the micro level, households dependent on remittances have suddenly been confronted with harsh difficulties meeting their food, health, education, and housing expenses. These families would normally invest the remittances they receive in housing and other sectors, thereby generating economic activity within Bangladesh. But those activities have stalled, creating a ripple effect within the country. According to the Refugee and Migratory Movements Research Unit (RMMRU), remittances account for 85 percent of daily expenditures for the families of overseas migrants. Sixty percent of these families are totally dependent on remittances for their daily expenses. Often, each migrant covers the livelihood of multiple family members back home, almost all of whom are situated at the periphery of the economy. Therefore, each individual migrant’s situation affects the livelihood of many times as many people.

The impact of this economic freeze is felt both by migrants halted in the middle of their labor as well as by would-be migrant workers who were expecting to earn money abroad but now cannot. According to an estimate by BRAC, a premier nongovernmental organization, as many as 150,000 would-be labor migrants found their plans derailed as of June 2020. The usual process of recruitment has been postponed. 

Actions Taken by Governments

According to local media reports, migrant workers who have lost jobs but remain in the Gulf have so far been surviving by taking loans from their fellow workers and even from relatives in Bangladesh, but prospects for the future are dimming fast. The irregular migrants who lived on small daily wages have been in increasing distress. Unless host governments offer assistance, the situation is poised to turn into a humanitarian crisis.

The Gulf states have vast reserves of wealth. They have adopted various packages to combat the novel coronavirus, support their citizens, and revive economic sectors. Combined, the six GCC nations as of early July had pledged more than U.S. $185 billion in pandemic-related economic stimulus. The UAE had committed U.S. $70 billion and Saudi Arabia nearly U.S. $61 billion, with smaller amounts for the other GCC countries, according to publicly available figures. Yet, foreign workers stand to get little benefit from these stimulus packages. All have similar objectives: to support local businesses and citizens, not foreign workers. Irregular foreign workers are excluded, while many legally present workers are getting a fraction of their pay at best. Still, there has been some movement in migrants’ favor. Bahrain, the least wealthy of the GCC countries, declared a general amnesty period until December 31, 2020 for irregular workers in the country to get regularized without paying any fees or fines.

The GCC states’ policies entitle all workers, irrespective of their status, to get free medical treatment if they develop COVID-19. Nonetheless, hospitals may be showing reluctance to treat migrant workers amid fear they may not be compensated by insurance companies or that the payment may be delayed.

Bangladesh’s government has created a U.S. $85 million fund to help returned migrants, offering them a soft loan without need for collateral. The fund is intended to train migrants so that they can find better jobs abroad once the situation returns to normal and to provide them with seed money to jump start employment-generating activities. If the plan can be appropriately implemented, it will help address some of the difficulties returnees face.

Starting a new enterprise at the moment is no easy task, but there may also be glimmers of hope. During the initial stages of the pandemic, returning migrants were socially stigmatized and isolated. Now that the pandemic has hit the country deeply, the government and people are becoming impatient. All sectors of the economy and commercial offices were beginning to reopen as of early July. Doctors in Bangladesh have begun clinical trials of a treatment protocol that has shown early promise. The official death rate from COVID-19 is relatively low, although this could be explained by the relatively young population and limited health-care facilities, especially in rural areas, which may allow cases to go unreported.

However, it is a difficult time to launch new commercial projects. For example, cattle farming is a popular sector for young people, yet the industry is facing difficulties due to an excessive supply of cattle. Many Bangladeshis did not have money to buy meat during the pandemic, creating a slumped demand and expected drop in prices. Thus, although the government is trying to incentivize the returnees, arranging activities for them will be very difficult. Overseas employment has long served as an attractive option for Bangladesh’s young workers.

The Need for International Coordination

The cost of migration for low-skilled contract migrants is often exorbitant, with significant shares of the recruitment fees handed off to middlemen, with the remainder covering agency fees at both ends, official costs, and plane tickets. Migrants typically cover the full cost, which ranges between U.S. $3,000-$8,000. Most become indebted to raise the funds, pawning their land, selling property, taking high-interest loans, or borrowing from relatives. Some migrants do not earn enough to recover their migration costs during their entire tenure in the Gulf.

These migrants have contributed to building up the vast highways, eye-catching skyscrapers, thriving industries, and world-class cities that have become the hallmark of their destinations in the Gulf and beyond. If migrants are not supported during the precarious time of the COVID-19 pandemic, their living conditions will grow increasingly dire, threatening collapse of the broader communities that rely on their labor.

Similar dynamics are playing out around the world. Globally, countries with large immigrant populations have realized that, despite initially adverse sentiments towards migrants amid the pandemic, essential sectors such as agriculture, health care, construction, and public works would be halted without them. Migrants are an essential part of their host communities; even more so in the case of the contract migrant workers in the Gulf States, which are so reliant on foreign labor in particular sectors.

The pandemic will end at some point. The Gulf states will again need foreign workers. Until they do, some may be prematurely deported before they can recoup the cost of their migration—amounting to a huge debt burden for individuals with very little financial resources.

Some workers who lose jobs during this pandemic can be accommodated by other companies that require more labor. Laborers could be temporarily shifted to other needed areas such as agriculture or animal husbandry until the economy returns to normal, rather than being paid not to work. Thus, all the parties can reach a win-win outcome.

The government of Bangladesh, within its capacity, has allocated funds for the reintegration of returning migrants through training and engagement in economic activities. However, these initiatives often falter at the implementation stage. In addition to government policies, NGOs and multilateral institutions such as the IOM have begun coordinating on plans to prevent migrant workers from floundering, and these efforts could continue. Financial institutions such as the World Bank, International Monetary Fund, Asian Development Bank, and Islamic Development Bank could also supplement the efforts financially. The fate of Bangladesh’s migrant workers has profound implications not only for their host countries, but also their communities of origin, so responsibility for their wellbeing should be shared widely. 

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