Migrant workers – South Asia’s financial bonanza combined with social catastrophe?

On 8 August, the citizens of Colombo witnessed what the newspapers described as a ‘stampede’ on Havelock Road. The cause was the mass of young people who gathered to collect application forms from the Bureau of Foreign Employment for an examination which qualifies them for jobs in the Republic of Korea.

While one newspaper put the number of people at over 5,000, another reported the number as 10,000! They reported that there were only 3,500 job applications available.

Commentators say that with youth unemployment running at 18.1%, these young people were desperate to secure an application. Some of them said they had spent money on Korean language training.

The panacea of foreign employment is not limited to Sri Lanka; it is a worldwide and specifically South Asian phenomenon.

South Asians working abroad send home huge amounts of money. India receives more remittances than any other country in South Asia estimated at US$ 50 billion a year. In the most recent fiscal year Pakistanis abroad remitted over US$ 11 billion. Bangladeshis working abroad remitted over US$10 billion.

In 2010, Sri Lankans employed abroad and refugees in developed countries remitted US$ 4 billion, a 25% increase over 2009. The Central Bank of Sri Lanka recently announced that the remittances in 2011 in May, showed an increase of 36.8% over May 2010. The cumulative inflow for the first five months of 2011 has risen to US$ 2,103 million.

Impact of migration on development

Sage Publications in India recently brought out a volume entitled ‘Migration, Remittances and Development in South Asia,’ edited by Dr. Saman Kelegama, which comprehensively explores the impact of migration for work on development on South Asian economies and has some suggestions on increasing the benefits and reducing the negative factors.

The book recommends that migration should be brought into the mainstream of development planning in South Asia and makes the point that hitherto it has been considered as an adjunct to the development process and not given the priority it deserves.

The book says that in Sri Lanka’s case, the significance of migration remittances to the balance of payments is so great that Sri Lanka can be described as a remittance dependent economy. In fact around 80% of Sri Lanka’s humongous international trade deficit of US$ 5.2 billion in 2010 was set off against remittances from migrant workers and the other source, which has been described as ‘refugee remittances,’ the funds sent back home by Sri Lankans in Western countries claiming asylum as refugees and those who have received that status.

With the refugee numbers declining due to the end of the war and countries tightening up on asylum claims, migrants will be the only source of any increase in remittances in the future. In 2008 remittances were estimated to be 8% of GDP.

Unique record

In Sri Lanka, the principal agency handling the subject is named –Ministry of Foreign Employment Promotion and Welfare. There certainly seems to be aggressive promotion. Economic hardship at home combined with this aggressive promotion has increased the number of Sri Lankans seeking employment abroad, while paradoxically, at the very same time all labour-intensive industries within the country are facing shortages of workers.

Readers must have read stories in the news papers of Department of Immigration officials arresting foreigners who had arrived in Sri Lanka from countries which have the ‘visa on arrival’ facility, who had stayed on illegally after the visa had lapsed and were found working in labour intensive sectors like agriculture.

If this is actually the case, Sri Lanka must have a unique record of a country which is an importer and an exporter of unskilled labour simultaneously. While the balance of payments situation of South Asian countries is positively impacted by migrant workers, what their hard-earned money is used for is an issue worth examining. Is it put into sustainable investments or spent to meet recurrent day-to-day expenses of the country, to bridge the gap between revenue and expenditure?

Role of the Diaspora

There has been some speculation that the South Asian Diaspora can play a role similar to China’s in promoting investment in the home country. China has 60 million persons working overseas. Overseas Chinese have poured in investment into China to fuel its rapid growth.

But as Gopinath Pillai, of the Institute of South Asia Studies in Singapore, points out, the South Asian Diaspora is dominated by professional and labourers, unlike China’s – the majority of which are entrepreneurs.

While the South Asian professional class which migrates tends to settle down in the country of migration and make their long-term investments in their adopted country, except for remittances made for the welfare of aged parents, etc., the Chinese entrepreneurs moved their manufacturing industries to the mainland from Hong Kong, Taiwan and Macau once the People’s Republic opened up for investment mainly due to lower costs.

The unskilled labourers on the other hand, whose earning power is much less, make comparatively small transfers for the subsistence of family they have left behind and these funds are mainly used for settlement of debts, life support and house construction.

While there are examples of Indian and other South Asian expatriate entrepreneurs investing funds in their countries of origin, they are few and far between and cannot in any way compare with their Chinese counterparts investments in the home country.

Huge social costs

Researchers say that the migration of women and mothers leaving behind young children causes huge social costs for the family. The majority of Sri Lankan women migrants migrate to work as housemaids in West Asia.

While there are many success stories of women who have earned sufficient amounts of money to build a house, educate their children and return home safely, unfortunately the media highlight the stories of abuse and ill treatment, which make good copy and headlines, which help circulation. There is of course the obligation to keep the public informed.

A study published by the Law & Society Trust underlines the ironic albeit common reality that in many instances, although it is the search for economic security and a higher standard of living and insurance against economic crises that encouraged migration for work abroad, the women migrants continue to be blamed for their absence, which has had a negative effect on family life and has shattered the unity of the family unit.

The research shows that overseas remittances have had a considerable impact on raising the standard of wellbeing of families of migrants and their ability to face up to economic shocks, but this outcome does not stand alone and is compacted by other probably equally important issues, other than financial, such as the psychosocial impact on the family due to the absence of the mother, the neglect of the educational and especially nutritional needs of young children, the burdens on the father and most often on aged grandparents of childcare, etc., all which have debilitating long-term effects, with scary repercussions for society at large.  

Reintegration of migrants

Reintegration of migrants after they return is also an area which has to be paid a great deal of attention. After being relatively free of constraints as a decision maker, to have to get used to operating in a family unit with consultation, compromise and consensus needed with other family members will require some preparation.

Issues arise on the utilisation of remittances by the family members during the migrant’s absence. Funds are often wasted on unsustainable investments, goods including services. The migrant is the target of each and every welfare and religious institution in the community as a soft touch for donations. The pressure to hold out that migration was a success, even though it was in fact not or otherwise, is heavy. The pressure to appear as a generous benefactor is quite a burden.

Sadly research has shown that due to these difficulties caused by family problems, the inability to manage the funds earned by the first migration and related psychosocial pressures this inability to cope causes remigration to be seen as a serious option, as a viable solution to the difficulties the returned migrant is facing. This results in a repetition of these problems in a few years time. This is never a solution.

Countries have enacted legislation on this subject. Sri Lanka has the Sri Lanka Bureau of Foreign Employment Act (SLBFE). An analyst has stated: “The most conspicuous factor about the SLBFE Act is that it is singularly devoid of provisions for sound, equitable, humane and lawful conditions for migrant workers and their families. The essence of the act is almost wholly bureaucratic.”

Pre-migration training

In Sri Lanka there is some pre-migration training required for a migrant. The Bureau provides 14 to 25 days of training. This is provided after the migrant to be has entered the process of migration for work and after the decision to migrate has been taken.

Analysts’ research has shown that guidance and mentoring should be provided preferably before this decision is actually taken, so that the choice of deciding to migrate for employment is an informed one.

After the agent has been contacted, money paid and the migrant to be goes for training, there can be no turning back. Lots of male migrants, who are unskilled workers, end up in what are called 3D jobs – dirty, dangerous and difficult. This causes a tendency to switch jobs once they arrive at the host country, which is illegal.

Migration for jobs, while bringing in valuable funding for South Asian countries to alleviate balance of payment problems, has provided an enormous safety valve in the aspect of domestic job creation. Countries would have found it very difficult to provide so many employment opportunities, especially at the lower end of the job market, at a remuneration level which the migrants enjoy.

The negative factor is the social costs of contract violations, trauma caused by ill treatment, financial issues over remittances and money management and family problems caused by absence. Some of these can be alleviated to a certain extent. The migrant to be can be counselled on whether the decision to migrate abroad for employment is the really the solution in that person’s or family’s unique situation.

Capacity, awareness and guidance

Capacity can be provided on how to face up to ill-treatment, especially avoidance and on what redress is available. The services provided by officials from the migrant’s country stationed in the host country have come in for much criticism.

Resources and officers’ own preparation and capacity, it is alleged, have much to be desired. Capacity can be built on how to best remit funds, through the banking system rather than Havala systems. Money management by the migrant and by the family which receives the money is often substandard. Much more awareness can be created.

Banks and financial institutions should get far more involved, at the pre-migration stage. If there is competition between the banks and the financial institutions at the pre-migration stage the migrant would have more choice to select a suitable service fit for their purpose.

The migrants’ family, left behind, especially in the case of women migrants who leave young children behind, should be provided with a high level of monitoring and care, including home visits by social workers. This is a task which could be undertaken by community-based and religious organisations in any given geographical area.

There is a high degree of compassion necessary in this sort of work. A bureaucratic approach will not work. The same principle will apply to bureaucrats assigned to look after migrants’ rights in destination countries. Of course resources should be provided for community based organisations to undertake such tasks. But a percentage of remittances could be justifiably provided for such an activity, as a preventive measure to avoid social disruption, discord, negative effect of growing children and family harmony.

Such community-based and religious organisations could also make sure that the family has regular news of the migrant worker and vice versa. After the migrant returns, smooth reintegration is a vital factor. Capacity for managing the resources the migrant has earned is critical. Ensuring the sufficient funds are set aside to cope economic shocks is important. Also the funds must be invested in some productive enterprise or economic activity to ensure a sufficient return to provide economic security.

A great deal of guidance is required on this aspect. A second migration becomes an issue when the earnings of the first migration are frittered away in an irresponsible and frivolous manner.

National policy

The reality is that South Asian nations need the funds earned by the migrant workers. Also jobs of the type and with the earning capacity which the migrants do overseas cannot be provided in the home country in the short-term. Job opportunities in the home countries are limited. Migration for work is inevitable, is such situations, especially in a globalised environment. But much more should be done to alleviate the problems which are caused by migrating abroad for work.

The social consequences of large numbers of women domestic workers who work in vulnerable environments in destination countries, leaving behind families, which result in child abuse, school dropouts, malnutrition and family break-ups, will affect a nation’s social harmony and human development in the short, medium and long term. This is not only the responsibility of the State but also of civil society.

The State must provide the space for civil society actors to operate. Otherwise the social consequences in the medium- and long-term will be horrendous, notwithstanding the seemingly short-term economic benefit, as the cost of remedying the social costs in the future will be more expensive.

Sage Publications ‘Migration, Remittances and Development in South Asia’ recommends the setting up of a ‘South Asian Migration Commission’ which could provide best practice guidance for nation states to bring about effective corporation on protecting migrant rights, promotion of development and migration policy linkages and alleviating the social consequences on human development of large numbers, especially of married females with children migrating for long periods abroad for work.

National policy may unfortunately be driven by an immediate greed for more and more remittances, for urgent economic reasons, to the detriment of social harmony and human development within the nation. The consequences of this will affect the nation long after the present politicians, bureaucrats and economists, who are decision makers today, have moved on, so accountability is not a constraint.

A regional commission could alleviate this by providing policy guidelines to alleviate the negative social consequences and draw attention to them; at the time the short-term policy to promote migration for work is being determined. It is indeed a commendable proposal that South Asian nations should take very seriously.

(The writer is a lawyer, who has over 30 years experience as a CEO in both government and private sectors. He retired from the office of Secretary, Ministry of Finance and currently is the Managing Director of the Sri Lanka Business Development Centre.)