Workers remittance

Money earned by workers a part of which subsequently is sent back home is an important factor of economies in most countries. Remittance works as both in and outflows to the country. Here in Maldives, the government is simply content in having the economy generate just two inputs to cover for all the expenses of the government, namely through fisheries and tourism. With the recent tax laws, the government will be creating a third input to generate income for the government through the restructuring process of the economy.

outflows
2005 2006 2007 Remittances as a share of GDP, 2007 (%)
Maldives 70 84 103
Sri Lanka 257 283 314 1.0%
India 1,341 1,580 1,580 0.1%
Bangladesh 5 3 3 0.0%
Nepal 66 79 4 0.0%
Philippines 15 20 35 0.0%
Thailand .. .. ..

The major outflow of cash from Maldives by the locals are to medical tourism in India and Sri Lanka together with the educational expenses for students staying abroad. The major outflow remittance from expatriate workers are of course to their parent countries.

inflows
2005 2006 2007 2008e Remittances as a share of GDP, 2007 (%)
Maldives 2 3 3 3
Sri Lanka 1,991 2,185 2,527 2,720 8.1%
India 21,293 25,426 35,262 45,000 3.1%
Bangladesh 4,314 5,428 6,562 8,979 9.5%
Nepal 1,212 1,453 1,734 2,254 15.5%
Philippines 13,566 15,251 16,291 18,268 11.6%
Thailand 1,187 1,333 1,635 1,800 0.7%

Because of the importance of workers remittance to the economy, most economies of the world seek to maximize the benefit from workers and their input to the economy. A typical worker who works in a resort is no less beneficial to the economy of his island than an established business at his home island or atoll. The only difference is the form of the business, ie; the worker is not a building but a human being…

Migration improves business profitability and reduces the costs of production, but an unregulated unchecked labour force (such as the one which is existing in the country at the present) is already causing harm to the local economy.

Workers’ remittances, compensation of employees, and migrant transfers, credit (US$ million)

The above tables are constructed with data from the http://blogs.worldbank.org site

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s