Social Safety Nets for Bangladesh Migrant Workers – Wake Up Call for Government
Backdrop
In an extraordinary move, lifting a six-year ban, the Kingdom
of Saudi Arabia (KSA) on February 1st, 2015, decided to resume
recruitment of Bangladeshi workers opening flood gates for the migrant job
seekers. As a result of it, within the first two days, thousands of jobseekers defying
the blockade and hartals (National Closure called by alliance of political
parties) flocked to the capital from different parts of the country risking
their lives. More than 5,000 jobseekers have already got their names registered
with the Bureau of Manpower, Employment and Training (BMET) believing that the
continued political violence would shrink the local job market.
Bangladesh received $3.1 billion in remittance from Saudi Arabia
in fiscal 2013-14, the highest from a single country. Home to over 1.5 million Bangladeshis,
the Kingdom will hire 10,000 workers from next month under 12 categories of
domestic workers such as maids, drivers, housekeepers, security guards,
gardeners etc.
These millions travelling for their livelihoods to more than
a dozen countries are temporary migrant workers who will return to Bangladesh
when their work permits expire and will need to begin life afresh as members of
Bangladesh’s huge informal sector or selfemployed workforce. A billion dollar
remittances are being sent by these workers back to their homeland. However, a
majority of their individual remittances rarely have a sustained impact on the
lives of overseas Bangladeshi workers or of their families and at best result
in a temporary improvement only in the consumption expenditure of the families
of these overseas workers
With an equal potential to contribute towards the economic
development of the country, women folk constitutes almost half of the
population of the country. Women migration from Bangladesh constituted only 1%
up to 2004, after which the trend reached about 5% in the subsequent years. It
is interesting to note that the number of women migration is ever increasing
from 1998 till date even when the overall migration declined due to global
economic recession. Up to 2008, more than 80,000 women migrated to overseas
employment in 17 countries. On average, nearly one in every ten Bangladeshi
workers in migrating countries are women.
Need and Necessity of Social Protection
Overseas Bangladeshi Workers have traditionally been
excluded from access to formal social security and retirement savings schemes
available to residents of these countries. They are also similarly excluded
from formal pension, provident fund and gratuity schemes available to
Bangladeshi workers, if any. Hence no
mechanisms presently exist to enable and encourage these workers to save for
their return and rehabilitation, health and old age nor does it provide any
coverage of risk against death including accidental death and risk of
longevity. As a result, and a majority of these overseas Bangladeshi workers may
face the grave risk of stay back as illegal migrant workers while those who
chose to come back would find no incentive to do so and are likely to be
trapped in poverty if and when they return to Bangladesh and become too old to
work. Women workers are even more vulnerable to old age poverty since they
enjoy a higher life expectancy than men but are disadvantaged visavis men due
to relatively lower incomes, a shorter working age and interruptions in
employment due to childbirth and other family responsibilities. Most of the women
migrant workers are illiterate or less educated which lead them to more
vulnerability of exploitation.
Return and
Rehabilitation: While the workers toil their wages abroad it is not
uncommon that they remit more than 90% of earning back home. Women who work as
house maids are provided with free food, shelter and clothing and thus remit
almost everything that they earn. Back home, their folks find a temporary flip in
their incomes and consume almost everything as if the remittances were meant
for consumption expenditure. They not only fail to make any savings out of
these incomes, but also fail to create an asset that could provide them an
income generating sustainable livelihoods for future. The migrant worker is then
seen more as a ‘cash cow’ that constantly milks the folks at home country as long
as she remains earning abroad. Under circumstances of being non-savers, the migrant
worker has no incentive to come back to the family as she has no savings, while
the family back home has no inducement to welcome her permanently as it would disturb
their incomes and consumption. Even if for any reason she comes back home, she
would find herself even worse off than those who had not migrated out. Though her
contract is for limited period she is socially and economically indebted and
compelled to remain migrant, even if it requires her status to change as ‘illegal
migrant’ which becomes more vulnerable to atrocities and tortures. During her long
tenure abroad and being devoid of healthy and hygienic living conditions there
are stronger chances of contracting various diseases. While there is no
incentive for return there is also no policy or strategy to rehabilitate and
internalize these workers back in Bangladesh. Thus the policy warrants a ‘Return
and Rehabilitation’ strategy.
Life and Accident
Insurance: The Wage Earners Welfare Board under the Ministry of Expatriates’
Welfare and Overseas Employment provides for a limited coverage on the risk of death
of a migrant workers. It provides Taka three lac to the family of the deceased
and covers the burial cost in Bangladesh. As many as 23,170 such compensations
were paid in past ten years which is negligible when compared to the mortality
factor of migrant workers. It goes
without saying that there is a strong need for broad basing and rationalizing
the insurance scheme and provide a cover at the time of departure itself rather
than compensating at a later stage. Both, life and accident risk need to be covered
and the welfare board may also consider providing a health coverage for the
migrant workers.
Pension: Most of
the migrant workers who have been earning and remitting money to their homeland
in their hey days are bound to land up in poverty in their old age and more
specifically so when they do not have any savings, neither for return and
rehabilitation, nor for fighting old age poverty. This cohort will fall back on
the government for the old age pension and the safety net, if they fail to save
nay, fail to be motivated to save for their old age. The cost of Inaction would be much higher in future as the population is ageing rapidly and the number of senior citizens would double within next two decades that would be full of inflation and higher life expectancy at 60. Any failure to create a funded pension liability at this stage only would lead to a socioeconomic and demographic disaster by the mid of the current century. Feedback from such target
beneficiaries and interactions with a variety of stakeholders in India and their
migrant countries suggested a significant latent demand and interest in such
Scheme. The same may not be untrue for migrant workers from Bangladesh.
Returns & Rehabilitation and Pension & Insurance Fund
The Government of Bangladesh may consider a bundled social
protection scheme for the migrant workers by encouraging them to open an
account and save for the bundled product. In order to achieve mass coverage and
provide the safety nets, the GoB will have to design a scheme in such a manner
that it would be pro poor and attract the workers serve their objectives as a 'Demand Driven' scheme. it should be simple, voluntary, low cost, secured and affordable with substantial publicity to sensitize masses about the issues that they might face. It should also attach a sweetener and provide co contributions as top ups for the retirement savings
plan that would motivate them to save and supplement their small savings.
Examples of such schemes are available in India where ‘MAHATMA GANDHI
PRAVASI SURAKSHA YOJANA [1] (MGPSY)’
offers exactly similar benefits to similar target group. It encourages and enable the overseas Indian workers by
giving government contribution to:
·
Save for their Return and Resettlement (R&R),
(Short term Savings)
·
Save for their old age (Long term savings for
Pension) and
·
Obtain a Life Insurance cover against natural
death during the period of coverage.
The government contribution available under the MGPSY is for
a period of five years or till the return of subscribed worker back to India,
whichever is earlier.
The main attractions of MGPSY are:
Government top up contribution of Rs.1,000 per annum in line
with Swavalamban platform for all MGPSY subscriber who save between Rs.1,000
and Rs.12,000 per year in NPS-Lite.
An additional government contribution of Rs.1,000 per annum for
the overseas Indian women workers who save between Rs.1,000 to Rs.12,000 per
year in NPS-Lite.
A special government contribution of Rs.900 by MOIA towards
Return and Resettlement (R&R) of the overseas Indian workers who save
Rs.4,000 or more per annum.
A life insurance cover under the Janshree Bima Yojana for risk
against natural death and death due to accident.
MGPSY is a specially designed social security scheme for the
Ministry Of Overseas Indian Affairs for the millions of blue-collar overseas
Indian workers recognized under the ECR category spread across the 17 countries.
MGPSY is a unique and integrated package of three carefully chosen, well-regulated,
and independently managed financial products/platforms existing in the market
Government Commitment:
Over last few decades, the Government of Bangladesh has demonstrated a
sustained and deep commitment to achieving high inclusive economic growth and
has taken a number of important steps to improve livelihoods opportunities, incomes, employment
opportunities and social safety nets for Bangladesh’s vast informal sector
workforce. Even the ‘Vision 2021’ is committed to poverty reduction and further
deepening the past progress by not only addressing the root causes of poverty,
but also by lowering the impact of vulnerabilities faced by the poor and
near-poor population . Government’s strong commitment to social protection is
also depicted in its budgetary allocations that increased from 1.3 percent of
GDP in 1998 to 2.5 percent in FY 2011. Even the Sixth Five Year plan (2011 –
15) depicted strong commitment on accelerating growth and reducing poverty and
provided strategic directions and policy framework. However, there is a strong
need and commitment for the Government of Bangladesh to provide a safety net to this cohort and other informal sector workers and extend the inclusive policy to benefit the million of
overseas Bangladeshi workers.
[1]
The author, Kavim V Bhatnagar along with others from Invest India Micro Pension
Services has conceptualized, designed and been the architect of the MGPSY. The scheme was rolled out by the Government of India in 2012 and has started providing social safety net to blue collared Indian Diaspora.
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