The World Bank has approved $100 million financing to help Bangladesh diversify exports in labour and skill-intensive industries beyond the garment sector and create more and better jobs.

The Export Competitiveness for Jobs Project will improve competitiveness of existing and potential export-oriented industries such as leather, footwear, plastics and light engineering, where Bangladesh has demonstrated a competitive edge.

The project will help create more than 90,000 jobs in non-garment export sectors, said the Washington-based lender in a statement yesterday.

“Bangladesh is the world's second largest garments exporter after China and it can boost growth by diversifying its exports, and repeat the garment sector success story in other sectors,” said Qimiao Fan, country director of the World Bank for Bangladesh, Bhutan and Nepal.

“The project will help the economy integrate further into the world trading system, and provide better jobs to Bangladeshi youth entering the labour market in the next decade, with a particular focus on improving female labour participation.”

The WB said the project would help firms access international markets and enhance their ability to comply with international standards through awareness building and matching grants.

The project will address the shortage of skills development, especially in industrial training for women, as well as in infrastructure and technology, according to the statement.

“The project will enhance growth and competitiveness of selected sectors that have a demonstrated comparative advantage or that provide essential inputs in export-oriented manufacturing value chains,” said Michael Olavi Engman, team leader for the project.

The scheme will encourage training to improve skills and labour productivity, and thus help generate better-paid jobs. The average wage growth for firms benefitting from the project could rise by an estimated 34 percent by the end of the project.

Although the garment sector constitutes 82 percent of exports, employment growth in the sector has stalled. However, the non-garment manufacturing sectors have been generating about 300,000 new jobs annually since 2010, the WB said.

Light manufacturing sub-sectors, which are labour-intensive and employ women, have expanded employment by 4.3 percent annually since 2010, according to the statement.

“The project will build on this momentum, and help increase the number of firms directly exporting in targeted sectors by about 29 percent.”

The credit from the WB's International Development Association, which provides grants or zero-interest loans, has a 38-year term, including a six-year grace period, and a service charge of 0.75 percent.

The WB has committed nearly $26 billion in grants and interest-free credits to Bangladesh since the country's independence. In recent years, Bangladesh has been the largest recipient of the bank's interest-free credits.

The month of May saw the highest remittance inflow -- of $1.26 billion -- in 11 months, a spike that can be attributed to Eid-ul-Fitr, the biggest festival in the country.

Non-resident Bangladeshis tend to send more money home ahead of the Muslim holy month of Ramadan, which culminates in Eid-ul-Fitr. Ramadan began from May 28 in Bangladesh.

Last month's receipts bucked the negative trend since the beginning of the fiscal 2016-17: they were 4.37 percent higher than a year earlier.

May's receipts took the total remittance in the first 11 months of the fiscal year to $11.5 billion, down 14.18 percent year-on-year, according to data from the Bangladesh Bank. 

Besides the seasonal factor, the BB took a host of initiatives to arrest the slow growth of remittance, which might have prompted the remitters to send money through the formal channel, said a central bank official.

The rising exchange rate might have also contributed to the jump in remittance, he added.

The inter-bank dollar rate crept up to Tk 80.50 in May from less than Tk 80 in April, according to data from the central bank.

The use of non-banking channel for sending remittance, slower manpower export and slowdown in global economy were mostly blamed for the downward trajectory of remittance for the past two fiscal years.

Remittance is the largest source of foreign exchange for Bangladesh after export receipts.

Overseas employment growth averaged 5.2 percent between 2010 and 2016, down from 5.8 percent in 2006-10, according to the Centre for Policy Dialogue.

In the proposed budget for upcoming fiscal year, the government has announced the establishment of a dedicated portal for migrant workers as part of the efforts to boost the remittance inflow.

From the portal, migrant workers will have easy access to work permit-related information of their host countries, while prospective ones can get visa-related particulars as well.

The government will also encourage the private sector to explore new labour markets and send workers abroad at low cost under state initiative.

The other measures include developing training infrastructure and imparting training to migrant workers to better meet the job requirements of their host countries.

Finance Minister AMA Muhith in his budget speech said remittance inflow may rise in the upcoming fiscal year thanks to the various government initiatives and continued recovery of the global economy.

As of now, the government has brought down the cost of remittance transfer and improved the efficiency of overseas banking units and exchange houses to bump up the inflows to Bangladesh, he said.

A step was also taken to strengthen drawing arrangement between Bangladeshi banks and the local banks of the countries where expatriates are working and to motivate the workers to remit through Probashi Kallyan Bank (Expatriates Welfare Bank).

“I firmly believe that all these initiatives together with the increasing trend of global growth will have a positive impact on our remittance inflows,” Muhith said in his budget speech.