Bangladesh Faces Remittance Slowdown from the Middle East: Causes, Risks & Policy Recommendations

Introduction

Remittances are the lifeblood of Bangladesh’s economy. Every month, millions of Bangladeshi migrant workers in the Middle East send money home to support their families, fund education, pay for healthcare, and even invest in small businesses. These flows also play a crucial macroeconomic role by stabilizing the balance of payments and supporting foreign exchange reserves.

However, new trends show that Bangladesh is facing a slowdown in remittance inflows from the Middle East. Once a region of seemingly unlimited opportunities, countries like Saudi Arabia, the United Arab Emirates (UAE), Kuwait, Qatar, Oman, and Bahrain are tightening policies, reducing work opportunities, or outright restricting migration.

This blog unpacks the causes of the slowdown, highlights its economic implications, and offers policy recommendations to safeguard Bangladesh’s remittance future.

Why Remittances Matter for Bangladesh

• GDP Contribution: Remittances make up around 6–7% of Bangladesh’s GDP, supporting millions of households.
• Foreign Exchange Stability: They remain a key source of hard currency for imports and debt servicing.
• Social Impact: Remittances reduce poverty and provide resilience during economic downturns.

Unlike exports or foreign investment, remittances are relatively stable. This makes the current slowdown even more concerning, as it strikes at a dependable pillar of economic strength.

What Documents are Accepted?

The type of document that serves as proof of remittance can vary depending on the financial institution and the nature of the transaction. However, here are some commonly accepted documents:

• Official Bank Statements: A bank statement showing the transaction is often considered a reliable form of proof.
• Transfer Receipts: Whether from a bank, an online money transfer service (like Wise or OFX), or a remittance business (like Western Union), a detailed transaction receipt is excellent proof.
• SWIFT MT103: This is a specific type of message used in international banking for wire transfers. It contains a lot of detail about the transaction and is considered a definitive proof of payment.
• Other Supporting Documents: Depending on the purpose of the remittance, you might also need to provide additional evidence, such as an invoice, a loan disbursement letter, or a university letter with a fee structure (for student remittances).

Recent Trends: Declining Inflows

Monthly Decline in Remittances (2024–2025)

According to Bangladesh Bank’s data, the country received $2.42 billion in remittances in August 2025, down from $2.82 billion in June.

Breaking it down by country, the sharpest declines are observed from Saudi Arabia and the UAE, which together host more than 4 million Bangladeshi migrants.

Note: Figures are drawn from official reports and adjusted for readability. This data highlights a consistent downward trajectory that cannot be ignored.

Causes Behind the Slowdown

• Labor Market Saturation: Saudi Arabia and the UAE already host millions of Bangladeshi workers. Many migrants face temporary contracts, shrinking demand in low-skilled sectors, and challenges in securing long-term work.
• Policy Shifts in the Gulf:
  • Visa Restrictions: The UAE announced a visa ban starting January 2026 for Bangladeshis and several other nationalities.
  • Oman’s Worker Ban: Oman has already restricted Bangladeshi workers since 2023.
  • Saudization & Emiratization: Middle Eastern governments are prioritizing jobs for citizens, limiting foreign labor intake.
• High Migration Costs: Bangladeshi workers often pay exorbitant fees to recruitment agencies. Once abroad, many fail to secure stable jobs, resulting in forced returns. Over 50,000 workers returned from Saudi Arabia in 2024 alone.
• Economic Pressures in Host Countries: Fluctuating oil prices, global economic uncertainty, and fiscal reforms in the Gulf states affect demand for migrant labor.
• Compliance and Legal Issues: Increasing scrutiny of undocumented workers, stricter residency laws, and poor access to legal protections have all made life harder for Bangladeshi migrants.

Economic Risks for Bangladesh

• Pressure on Foreign Reserves: With remittances dropping, the central bank may struggle to maintain currency stability.
• Rising Poverty Risk: Families dependent on remittances face reduced household income.
• Trade Deficit Widening: Bangladesh imports large amounts of fuel and machinery. Reduced foreign exchange inflows could widen deficits.
• Job Market Stress at Home: Returning migrants add pressure to the domestic labor market, which is already under strain.

Insights: Beyond the Numbers

While the figures point to a slowdown, the deeper issue lies in Bangladesh’s overreliance on Middle Eastern markets. For decades, the migration strategy has prioritized quantity (sending more workers abroad) over quality (ensuring skills, rights, and diversification). This approach is now hitting structural limits.

Policy Recommendations: Securing the Future

• Diversify Migration Destinations: Expand labor agreements with East Asia (Japan, South Korea), Europe, and North America. Invest in training workers to meet global skill standards.
• Strengthen Bilateral Negotiations: Proactively negotiate with Middle Eastern governments to secure labor rights. Address visa bans diplomatically while improving regulatory compliance at home.
• Lower Migration Costs: Crack down on exploitative recruitment agencies. Promote ethical recruitment through official channels and digital platforms.
• Upskill Migrants: Establish specialized training centers for healthcare, IT, and construction workers. Promote English and Arabic language training for better integration abroad.
• Support Returning Migrants: Launch reintegration programs, offering financial literacy, entrepreneurship support, and microfinance opportunities. Leverage returnees’ skills for domestic industries.
• Digital Remittance Channels: Encourage migrants to use formal banking and mobile channels for remittances to reduce leakage into informal hundi systems.

Strategic Advisory Perspective

From a policy standpoint, Bangladesh must shift from being a labor-exporting economy to a skills-exporting economy. Relying solely on low-skilled work in the Gulf is no longer sustainable. Moreover, remittance policies must be integrated with foreign policy, education, and economic planning. A national strategy on migration and remittances is overdue.

Conclusion

Bangladesh stands at a critical juncture. The remittance slowdown from the Middle East is a wake-up call, signaling the urgent need for diversification, better worker protection, and strategic policymaking.

For decades, remittances have been a reliable pillar of stability for Bangladesh. But to safeguard the future, the country must evolve beyond dependence on a handful of Middle Eastern markets. By focusing on skills, ethics, and global partnerships, Bangladesh can not only sustain but also grow its remittance inflows — ensuring economic resilience for years to come.