Economist Ahsan H Mansur has recommended discontinuing the government's 2.5 percent cash incentives on inward remittances in Bangladesh, citing exploitation by Dubai-based companies. Mansur proposes redirecting the Tk 62.5 billion in annual subsidies for remittance incentives to the development of the health and education sectors [03b6cd93].
According to Mansur, prominent companies in Dubai aggregate remittances from other Middle Eastern countries and send them as remittances to Bangladesh, taking advantage of the incentives. He also advocates for a slight increase in the policy interest rate and maintaining elevated bank interest rates to stabilize the dollar. Implementing these policies could potentially reduce high inflation to 6.5 percent by the end of the year [03b6cd93].
Former Bangladesh Bank Governor Dr. Atiur Rahman's emphasis on continuing incentives for export and remittance earnings aligns with the government's focus on the role of remittances in driving Bangladesh's economy. However, Mansur's recommendation highlights concerns about the exploitation of remittance incentives by certain companies in Dubai. This raises questions about the effectiveness and fairness of the current incentive system [03b6cd93].
To address these issues, it is crucial for the government to carefully evaluate the impact of remittance incentives and consider alternative strategies for promoting economic growth and development. Redirecting subsidies to the health and education sectors could have significant positive impacts on the overall well-being of the population. Additionally, measures to stabilize the dollar and reduce inflation would contribute to a more stable and sustainable economic environment [03b6cd93].