Migration and Development in the East Asia and Pacific Region: Potential to gain from boosting regular migration

Remittances to EAP remain buoyant and continue to support macroeconomic stability - projected to increase by 7.0 percent to US$122 billion and to US$127 billion in 2015, as the World Bank’s Migration and Development Brief 24 (Oct 2014) reports.

While steadily declining, the cost of remittances to EAP remains close to 8 percent in 3Q2014, according to the report. Money transfer operators (MTOs) contribute to lowering the cost; and cash-to-cash transfers are likely to cost higher than cash-to-account transfers for receiving countries in the region, highlighting the importance of deepening financial inclusion of migrant families in remittance-receiving countries.

The EAP region has potential for further gains from facilitating regular migration, including reducing recruitment costs. The wide disparities in incomes across countries in the EAP region provide the strong impetus for migration within the region; yet barriers to mobility are increasing the level of irregular migration and thus lowering the potential contribution of migrant workers to both countries of origin and destination. Recent event and findings reflect this:

• The recent exodus of Cambodian migrant workers from Thailand. Fearing a crackdown on irregular migrants by the new Thai government, hundreds of thousands of Cambodians have fled Thailand in recent months. This is likely to have significant ramifications for both countries- e.g., a dip in remittances in Cambodia; and labor shortages in Thailand.

• Forced labor in Malaysia and Thailand. A recent report of the US Department of State highlights that a complex system of recruitment and contracting fees in Malaysia has placed heavy financial burdens on migrant workers from neighboring countries; many low-skilled labor migrants employed in agricultural plantations, construction sites, textile factories, and domestic workplaces are subjected to fraud in wages. The report claims that corrupt officials on both sides of the border facilitate crossings of irregular migrants between Thailand and neighboring countries—Lao P.D.R., Myanmar, and Cambodia—and that some of these irregular migrants are then channeled to work in Thai fishing boats for years for very low wages. 

To boost regular migration, countries have acted upon lowering barriers to regular migration. Cambodian authorities reduced passport costs for migrant workers, to $4 from $124, and opened “one-stop-shops” for easier and faster passport issuance at border towns. Furthermore, the Cambodian Ministry of Labor and Vocational Training announced that recruitment agencies would work together with relevant institutions to help Cambodian migrant workers to work legally in Thailand at fixed fees of $49. The success of this initiative will depend upon improved governance. Thailand has been operating temporary centers to expedite work permit issuance. A new study reports that social networks also play a key role in facilitating safer migration between Myanmar and Thailand (Nwe Kay Khine, forthcoming).