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The Financial Express

Oil and turmoil: Learning new lessons?

| Updated: October 22, 2017 06:29:39


Oil and turmoil: Learning new lessons?

Lower petroleum prices have perennially been an importing country's dream-come-true, the deeper the cuts made, the bolder the imaginations. For Bangladesh, however, the tumbling prices of the past several months carry a grain of salt: without contingency plans, they may begin to bite the average citizen, whose income is not rising.
Take, for example, oil revenues for exporting countries. Just looking at those countries where we purchase our petroleum from, or where our citizens go to work, to remit vitally needed foreign-exchange, we should be building some contingency plans from now: the first wake-up call has come in the form of dipping remittances. Overall, in the 2015-16 fiscal year, we received 2.4 per cent less than in 2014-15: about $14.93 billion, as against $15.29 (as a contemporary  reported on July 22, 2016). Interestingly, the decline touched every major Middle East country we send migrants to: from Saudi Arabia (from $3.3 billion to $2.9b) and the Emirates ($2.8b to $2.7b), Kuwait ($1.07b to $1.03b), Oman ($915 million to $911m), Bahrain ($554m to $486m), and Libya ($46m to $12m). Qatar, however, is an exception registering an increase (from $310m to $432m). Are there any lessons from these destinations of low-wage migrants?
By contrast, destinations with mixed low-wage and high-wage actually ended up remitting more during those two years: from $2.3b to $2.4b (United States), $812 to $862m (United Kingdom), $260m to $350m (Italy), $62m to $69m (Australia), $60m to $65m (South Korea), $21m to $26m (Germany), $20m to $27m (Hong Kong), and $16m to $23m (Japan), with declines only in Malaysia (from $1.38b to $1.32b) and Singapore ($443m to $389m). Can a corresponding lesson be learned from this group too?
Whereas the plunging oil-price lesson is the foremost for any remittance analysis for us, there are others worth heeding. First, our low-wage migrant industry may have peaked, or is about to: it is unlikely a climbing middle-income aspirant can supply low-wage workers for long; but many of the Middle East countries they go to are not only chopping their immigrant migrant quotas given the reduced oil income, but also, largely, have no other sector to shift them to, since construction, the obvious low-wage sector, is also currently depressed. 
More will be said about this, especially given the Saudi immigration deal we completed recently, but a second lesson is the need for us to infuse a higher threshold of skills to our workers, not only if we want to keep the migration industry flowing, but certainly to fit into jobs here should they have to return unexpectedly. A flood of unemployed returnees is the last hurdle our struggling economy presently needs; and this inevitability cannot be whitewashed by sudden sporadic or short-term demands. We have to put our middle-income caps on to navigate this sea more propitiously.
A third lesson relates to the secondary effects of the oil-price dive: it will inflict major reallocation of resources throughout the industrialised world, some beneficial, others harmful, thus, even the countries where remittances increased, may suddenly join the Middle East oil-exporters as sources of remittance-decline for us. Especially if it is the United States and the European Union, where significant restructural dynamics have been at play - all jobs, from the blue-collar to the white-collar will be on the line. The United States has its electoral apprehensions uppermost amid the sizable lay-offs, mergers, and bankruptcies underway, while the European Union struggled to rescue its own industries in addition to fighting terrorism (an increasingly costly and scary undertaking clipping resources and expectations) and control immigration, even before the Brexit bite.
A fourth lesson emanates from South-East Asia. Singapore has identified Bangladesh as a new source of extremist incursion; and if that does not spill over into neighbouring Malaysia, then our own bilateral policies on migration, which have struggled to find a commonly accepted formula, may also catch the proverbial flu from the Singaporean cough. That threat imposes upon us a filtering imperative for our own migrants, especially low-wage, not just to South-East Asian countries, but perhaps even more so to the Middle East countries where disenchanted Muslims, wherever they are, continue to swallow such stories of 72 wives awaiting them in Paradise, or a Nirvana awaiting them in the Caliphate, whether in Syria, Iraq, or any world-wide location. Amid the depression of the oil-triggered job industries in the Middle East, the vulnerability of these hapless workers being converted from true Islam to a perverted extreme only rises. Within that context, our own July 2016 cases expose to potential migrant recruiters abroad a major disincentive to come shopping here. We need to redouble our efforts to not only stringently enhance our evaluation of those who are selected or wish to go, but ramp up efforts to boost the confidence of all recruiters, investors, and traders interested in our products or market.
Lessons apart, the need for training and bilateral cooperation only grows. Maids going abroad, for example, need to be trained, especially against any exigency of which we occasionally read in newspapers, but most of all to find an embassy-based recourse or resort where they can keep unhindered contact and find immediate support. Each embassy should have a woman official who can elicit more trust in these maids, and cooperation, through protocols, with local authorities, in case of any irregularities. Not just women, but migrants across the board should have both training (even of the local language) and cooperative arrangements of last resort with the embassy that can over-ride any recruiter privilege, especially as it comes to safeguarding passport inviolability. Our government-level agreements should not boast how many new emigrants were mobilised but the efforts taken to protect them throughout their stay abroad. Towards that end, a fine place to begin is to eliminate all private recruiters across Bangladesh, process permits only through official channels (even preserve passports in lieu of a permit at every destination to prevent blackmail or punishment), and boost government-supporter transportation carriers.
Unfortunately, the global political and economic atmosphere is so turbulent that migrants increasingly become red-herrings of any other goal by any other group. This article has used a safe issue, like oil-price decline, to alert both officials and citizens that more coarse cases await in the wings. Vigilance and preparation remain our last line of defence, especially since, presently, we are ahead of the migration curve: verbal safeguards have been aired, and a vast majority of our emigrants, especially low-waged ones, dispatch more positive vibes than negative. Nonetheless, we have read or heard about too many irregular cases, and can deduce from the nature of international developments, like oil prices slumping, of what might follow. "Better safe than sorry" as a cliché has never had a riper moment to be heeded than right now.
Dr. Imtiaz A. Hussain is Professor & Head of the newly-built Department of Global Studies & Governance at Independent University, Bangladesh.
[email protected]
 

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