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Migration & Refugees

Remittances Buoy Up Myanmar’s Economy

A port of entry into Myanmar (Burma) from Thailand. Credit: Preethi Nallu/IPS

BANGKOK, May 23 2013 (IPS) - Nangnyi Foung reaches into the dryer, pulls out another pair of pants and places it on the ironing board. “I still have several more loads to go,” she says as the clock strikes nine p.m., marking the start of her 14th hour on the shift.

She has been on her feet in this laundromat in the northern Thai city of Chiang Mai since seven in the morning and had been hoping to call it a day when two more customers walked in.

She is not in a position to turn anyone away: “I need the money. My family needs me to work,” she tells IPS, her voice tinged with desperation as she begins yet another load.

Six do-it-yourself washing machines stand like sentries at the entrance of this storefront-turned-laundromat. A flight of stairs leads to Nangnyi Foung’s living quarters, where she retires late at night only to collapse in exhaustion before waking up and beginning all over again.

Originally from the Shan State in neighbouring Myanmar (formerly Burma), Nangnyi Foung came here saddled with debt.

Fleeing persistent violence in her home country, she took out loans and paid middlemen hefty sums in order to win safe passage to Thailand, where, she had heard, employment opportunities awaited.

Ten years later Nangnyi Foung is still working to pay off her debt, awaking daily to a rigorous fourteen-hour shift of washing and ironing. Her earnings after seven days’ work without a single day off amount to little over six dollars, much of which is remitted back home.

Reaching for the steaming iron Nangnyi Foung tells IPS she saves on living expenses by sleeping in the basement of this facility. If she also had to pay for lodging she would not be able to send money home to her family of four.

Accounting for over 80 percent of Thailand’s 2.5-million-strong migrant labour force, Burmese migrants like Nangnyi Foung provide a lifeline to cash-strapped families back in Myanmar, one of Southeast Asia’s poorest countries that is struggling to recover from decades of economic stagnation.

Today, the minimum wage in Myanmar – about 180 dollars a month – buys eight to 10 times fewer daily consumption commodities like rice, salt, sugar and cooking oil than it did twenty years ago. The average Burmese lives on less than a dollar per day.

Though Myanmar is the world’s largest exporter of teak, jade, pearls, rubies and sapphires, and boasts lucrative extractive industries such as mining, timber and power generation, very little of the country’s natural wealth trickles down to the masses: approximately 32 percent of the population lives below the poverty line, while unemployment is at 5.4 percent.

According to a 2006 survey of migrant workers from Myanmar, conducted by the Asian Research Centre for Migration, more than two-thirds of the 600 respondents admitted to being unemployed before migrating to Thailand.

Remittances jump hurdles

While migrant workers fill crucial gaps in Thailand’s labour market, and their remittances account for five percent of Myanmar’s gross domestic product (GDP), neither government has attempted to make the flow of money between workers and their families any easier.

Despite the existence of commercial banks or official ‘Xpress Money’ outlets, most migrants prefer to use the informal remittance channel known as the “hundi” system.

These unauthorised transactions involve dealers in Thailand relaying messages to members of their network in Myanmar, who then deliver the necessary amount to the family.

Some migrants rely on friends and loved ones who travel between the neighbouring countries to act as conduits, thereby circumventing costly bank transfers.

“The banks can’t be trusted and they require a work permit, a letter of recommendation from our employer and a passport,” Nangnyi Foung says, documents very few migrants have access to.

Migrants with families in rural areas go through brokers, who deliver cash to the recipient’s doorstep, eliminating the hassle of them having to locate cash points.

According to a new report released Monday by the International Fund for Agricultural Development (IFAD), Asian countries dispatched over 60 million migrants into the world, “who sent almost 260 billion dollars to their families in 2012. This represented 63 percent of global flows to developing countries.”

Yet the continent seems ill equipped to deal with the influx of remittances, which benefit one in 10 Asian households.

“Although the clear majority of the region’s population lives in rural areas, 65 percent of payment locations are in urban areas,” the report found. In most Asian countries, only banks are authorised to deal with foreign currency transactions, making it difficult for poor rural communities to access funds coming in from abroad.

The report stressed the urgent need to provide remittance-receiving families with “more options” to secure and spend this money, especially since nine Asian countries currently receive remittances “exceeding 10 percent of GDP.”

The report has particularly vital policy implications for Southeast Asia, where 13 million migrants are currently living and working abroad. Thailand has become a “net importer” of migrant labour – attracting more than double the number of migrants to work in its expanding economy than it is sending abroad.

Women forfeit rights for employment

Constituting nearly 49 percent of the global population of 214 million migrant workers, women are responsible for the lion’s share of remittances flowing around the world.

Acutely aware of their families’ needs, like food, housing costs, education for children or younger siblings, and healthcare – women often endure extreme conditions in order to remit money back home.

The town of Mae Sot, located along the Thai-Myanmar border, hosts the largest number of women migrant workers in Thailand, who toil over fifteen hours a day in garment factories. In 2012, this sector netted estimated profits of 6.3 billion, while labourers who keep the industry running earned between 66 and 100 dollars per month.

Kyoko Kusakabe, associate professor of gender and development at the Asian Institute of Technology and co-author of ‘Thailand’s Hidden Workforce’, told IPS that most female migrants in Mae Sot “avoid labour strikes and forfeit their rights in favour of (continued employment).”

She says this is part of a culture that forces women to be “responsible” from a very young age, while their male counterparts have few obligations.

According to Kusakabe, this culture is reflected in remittance patterns: when the economy is booming, remittances from men increase, falling again when the economy enters a slump. Remittances from women, on the other hand, remain steady regardless of the overall economic climate, suggesting that women save more, or forego their own needs during times of economic austerity in order to preserve their family’s lifeline.

Her research found that even if women are not paid their salaries, or lose their jobs, they borrow money in order to send home, fearful that their children or parents will starve without financial support.

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