Remitting from Saudi Arabia too costly

Remitting money from Saudi Arabia remains disproportionately expensive for Bangladeshi migrants, pointed out Bangladesh Bank Governor Ahsan H Mansur yesterday, urging coordinated bilateral efforts among financial sectors to streamline and reduce the cost.

Speaking at the opening of the Saudi Arabia-Bangladesh Business Summit, Mansur emphasised the need for deeper financial and economic integration between the two countries.

The conference was organised by the Saudi Arabia-Bangladesh Chamber of Commerce and Industry (SABCCI) at the Sheraton Dhaka.

"Saudi Arabia remains the largest source of remittance for Bangladesh, but the cost of sending money is still 6 percent to 10 percent — an excessive burden for migrants," said the BB governor.

"A joint initiative between financial institutions and central banks could significantly reduce this cost, offering relief to our workers abroad," he said.

Mansur said the economies of Bangladesh and Saudi Arabia were complementary to each other. While Saudi Arabia requires both skilled and unskilled labour, Bangladesh is a key source of such manpower, he said.

Bangladesh, meanwhile, seeks energy and investment — both of which Saudi Arabia can readily offer, he pointed out.

Highlighting the potential of bilateral trade, he said, "Bangladesh can export textiles and other products that are widely used in Saudi Arabia. In turn, Saudi investors could explore sectors beyond oil and fertiliser, including infrastructure and technology."

Mansur also pointed out that while the Public Investment Fund, the sovereign wealth fund of Saudi Arabia, has made significant investments in India, its presence in Bangladesh remains negligible.

"This is an opportune time for Saudi sovereign and private investors to engage with Bangladesh's dynamic economy," he said.

Referring to the broader Islamic economic landscape, the governor said over 20 percent of the global population resides in Islamic nations, yet intra-Organisation of Islamic Cooperation investment remains underwhelming.

"Turkey and Indonesia have reached trillion-dollar economies. Bangladesh, currently at the half-trillion mark, is firmly on that trajectory," said Mansur.

He added, "Despite global shocks — pandemics, recessions, or political instability — Bangladesh has maintained steady growth. In the past 30 years, the GDP growth of Bangladesh has never fallen below 3.5 percent. This resilience underscores the country's economic potential."

Urging Saudi investors to pursue greenfield foreign direct investment (FDI) rather than short-term portfolio flows, Mansur said Bangladesh welcomes long-term commitments.

"The investment focus should shift beyond traditional sectors to emerging opportunities in manufacturing, services, and digital infrastructure," he said.

He also called for deeper engagement in areas such as trade facilitation, labour market reforms, and capacity building.

"Our political, cultural, and religious ties are strong. Now we must match that with equally robust economic relations," he said.

Speaking as a special guest, Amir Khasru Mahmud Chowdhury, a BNP standing committee member, highlighted the historic roots of Bangladesh's labour diplomacy with the Middle East.

He credited BNP founder and former president Ziaur Rahman for initiating formal agreements to send workers abroad.

He lauded the current remittance inflow from Saudi Arabia but stressed the need for skill development to multiply earnings.

"Only 22 percent of our 2.1 million workers in Saudi Arabia are skilled. Enhancing this ratio could exponentially boost remittance volumes," said Chowdhury.

On capital markets, he said Bangladesh requires large funds to transition from a "frontier economy" to an "emerging market."

"Saudi institutional investors can play a pivotal role in this transformation," he added, noting that the collaboration need not be limited to energy and textiles but could extend to a range of sectors.

In his welcome remarks, SABCCI President Ashraful Haque Chowdhury said it was unfortunate that it took 53 years to establish a joint chamber between the two nations.

"Now that it's finally here, we aim to enhance exports of textiles, agro-products, IT services, and skilled professionals while attracting Saudi investment in infrastructure, logistics, and technology," he said.

Policy Exchange Bangladesh Chairman Masrur Reaz, presenting a keynote paper, said the bilateral trade potential remains vastly underexplored. "Neither country features in the other's top five trading partners," he noted.

He identified key Bangladeshi exports with high potential in the Saudi market — including garments, processed food, leather goods, plastic, and pharmaceuticals.

Meanwhile, Saudi Arabia could export LNG, petrochemicals, fertilisers, and renewable energy solutions.

Reaz emphasised human capital development as a priority.

"Joint training ventures with Saudi institutions could unlock massive opportunities," he said, urging reduced red tape and improved efficiency at ports and airports.

"If someone cannot exit the airport within 30 minutes, it signals a systemic problem. Accountability is essential," he remarked.

He assured potential investors that "the real time for investing in Bangladesh will begin after the upcoming elections," characterising the country as entering a "new take-off phase."