The government has outlined a plan to introduce a saving scheme in the form of provident fund for expatriate workers to expand the social safety net.
The Ministry of Expatriates’ Welfare and Overseas Employment has sent a proposal to the Ministry of Finance, requesting it to take a move in this regard, officials said.The proposal mentions that if the expats deposit 10 percent of their money sent to the country in the scheme, the government will provide 5 percent incentives, which is 3 percent more than the current 2 percent incentives.
If the expats do not deposit money under this scheme, they will continue to get 2 percent incentive, according to the proposal.
Ministry sources say if the government forms provident fund for expats and provides 5 percent incentives, the government would require Tk 9,000 crore.
Currently, the government spends around Tk 3,500 crore as incentives for the migrant workers.
Expatriates’ Welfare and Overseas Employment Minister Imran Ahmed sent the proposal titled ‘Contributory Provident Fund (CPF) for Migrant Workers’ to Finance Minister AHM Mustafa Kamal on April 28.
Expatriates’ Welfare and Overseas Employment Secretary Dr Ahmed Munirus Saleheen, who prepared the proposal, has confirmed the matter to the Daily Sun.“Required money can be allocated considering it an initiative for expanding social safety net. Contributory Provident Fund (CPF) will reduce future risk for expatriate workers,” said Saleheen.
The ministry has come up with the proposal amid the coronavirus pandemic when the struggle and crises of expatriate workers are more evident.
Around 700,000 Bangladeshis go abroad every year to work in different sectors. A good number of workers return home each year after the end of their contract or losing their jobs due to various reasons.
Sources in the ministry said it has been observed that the major portion of expatriates’ income is spent in running their families and building houses.
They hardly can save big amount of money and invest that in the productive sectors. Consequently often they are seen struggling for money after returning to the country.
According to the Expatriates’ Welfare and Overseas Employment Ministry concept paper, expat workers would be able to deposit 5-20 percent of the money they would send to the country in a scheme for 3-5 years.
If they want, they would be able to withdraw money after one year with interests. And they must receive money within 15 days of submitting application for withdrawal.
The government provides 13 percent interests in the provident funds of the government employees. The Ministry of Expatriates’ Welfare and Overseas Employment has recommended that the Finance Ministry provide similar amount of interests to the expat workers.
The ministry also thinks the government can provide 10-11 percent interests to the expats as the expats would receive 5 percent incentives.
In the concept paper, the ministry opined that a portion of the money sent by the migrant workers would be diverted to provident fund automatically but initially the government can keep a voluntary option for them.
Ovibashi Karmi Unnayan Program (OKUP) Chairman Shakirul Islam said, “This is a very good initiative. Creating a provident fund will assist expatriate workers to save money for securing their future but it should be voluntary so that if necessary any worker can skip the scheme.”
According to the Expatriates’ Welfare and Overseas Employment Ministry’s concept paper, if a worker sends Tk 100 to the country and keeps Tk 10 in his provident fund, the government will provide him Tk 5 more to his account.
Former lead economist of the World Bank’s Dhaka office Dr Zahid Hussain thinks that it would be difficult for the government to provide 5 percent incentives for migrant workers.
Dr Zahid Hussain said, “Formation of separate provident fund for expatriate workers would create problems as the government has been working to introduce a national pension scheme for all.”
However, former Governor of Bangladesh Bank Dr Mohammed Farashuddin believes that such scheme would facilitate the migrant workers.
“Migrant workers’ contributions to our economy are tremendous. Their remitted money has kept the country’s economy in a good state amid the pandemic. The government should take more such initiatives for them,” he said.