1. Labor Migration in the GMS The World Bank Program
March 14, 2007

2. Structure
Labor Migration in the GMS
The World Bank Program

3. I. Labor Migration in the GMS: Migration Patterns
International migration within East Asia, and within the GMS has also increased sharply in recent years. Although much of the cross border migration is irregular, and therefore it is difficult to have reliable info on the real sizes, most estimates suggest that at least 2 million migrants have moved due to economic reasons within the GMS in the last years. Only Thailand estimates to have around 2 million irregular and legal migrants living in the country.
As an indicator of migration flows within the GMS we can use the figures from the registration process in Thailand. In the latest and most extensive effort in 2004, over one million migrants from the GMS were registered, and more than 8 hundred thousand got work permits, as we can see in the graph. The majority of the registered migrants were from Myanmar.
There are several distinct and established migration patterns in the GMS. These include the movements of mainly unskilled Cambodian, Lao and Myanmar workers into Thailand, higher skilled from Vietnam into Lao and Cambodia, and also high skilled Chinese from Yunnan and Guagxi into Lao and Myanmar. Thailand, Cambodia and China are the main receiving countries, being Thailand by far the larges of the three.
These migration flows reflect the emergence of an incipient regional labor market.
Migration within the GMS is expected to increase in following years driven by factors such as uneven development patterns, slowing population growth in Thailand and economic integration. Most of these flows however are likely to remain irregular unless greater efforts are made to regulate and manage them.
Source: International Migration in Thailand, ILO and Ministry of Labor, Thailand

4. I. Labor Migration in the GMS: Features specific to the GMS
Undocumented migration
Informal channelling of remittances
Internal displacement and refugees
Close link between domestic and cross-border migration
There are several features specific to migration in the GMS, compared to migration to high income countries, that are therefore not typically studied. These features have policy implications that we have to keep in mind.
Most of the migration flows within the GMS are illegal or irregular. This irregular nature of migration in the GMS has a direct impact on the social costs of migration: on the way migrants migrate, the channels they use and the risks they face, and also determines the living and working conditions of migrants in the receiving countries, where they do not have effective access to social services and are frequently subjected to abuse from their employers.
The lack of formal reliable mechanisms to channel remittances plus the high fees being charged to migrants for this kind of formal service when it exists, explains that most migrants in the sub- region choose to send remittances back home through informal mechanisms.
In some cases migration is associated with displacement within and between countries due to conflict and other reasons.
There is a close link between domestic and international cross-border migration, due to the proximity of countries of origin and destination, the ease to cross borders and the cultural homogeneity of people living near borders.

5. II. The World Bank Program: Objectives
Improve knowledge on labor migration issues in the GMS with a focus on socio-economic impact on sending and receiving countries as part of GMS Working Group on Human Resource Development
Raise awareness of decision makers
Strengthen the capacity of governments and development partners
I would now like to discuss briefly the World Bank program on labor migration in the Greater Mekong Sub-region.
The program was launched in June 2005.
Our goals were 3 fold:
To largely take stock of current information, identify knowledge gaps and seek to improve knowledge on the issue, particularly in relation to the socio-economic impact of migration.
To highlight the importance of these issues and their significance for poverty reduction; and
To improve capacity of governments and development partners in implementing a sound regional regulation policy for labor migration.
It is a very ambitious program to be rolled out in several phases. Currently we are completing the first phase of stocktaking and research.

6. II. The World Bank Program: Outputs
Literature review
New analysis:
2000 Thailand Population Census
2003 Thailand Agricultural Census
Kanchanaburi Demographic Surveillance System (IPSR)
New survey, Prey Veng, Cambodia 2006
The first phase of the program focused on Thailand as major receiving country and Cambodia, Lao and Myanmar as sending countries. We worked in collaboration with various research centres in Thailand in Cambodia, specialized international institutions such as ILO and IOM, and other UN agencies, and representatives of the Thai and Cambodian governments. We have produced five background papers and a summary report. They conducted a literature review, and also incorporated findings from several new analysis of datasets that include …
IPSR: Institute of Population and Social Research

7. II. The World Bank Program: Issues
Demographics of migrants
Migration process
Living and working conditions of migrants
Evolution of policies and shaping factors
Impact of migration on migrants and families
Impacts of migration on sending and receiving countries
The research phase has covered issues ranging from the demographics of migrants, and the migration process, to the the living and working conditions of migrants. We also covered the evolution of the Thai policies regarding migration and the factors influencing this evolution, and the impacts of migration on sending and receiving countries and communities and on the migrants and their families.
The World Bank thinks about migration as an economic choice. We assume that humans are rational and will choose what is best for their own welfare. The Bank also considers that migrant are economically important both to receiving and sending countries. From this economic perspective, Id like to summarize some of our work’s findings around the benefits and costs that migration in the GMS has not only for migrants and their families, but also for both sending and receiving countries. As a caveat let me say that the following lists of benefits and costs of migration are not exhaustive.

8. II. The World Bank Program: Benefits of Migration
Employment:
Migrants: Employment opportunity and higher income than in country of origin
Country of origin: Reduced unemployment
Receiving country (Thailand): Helps cover labor market gaps
The main motivation for migrants to move across borders is economic. Migrants seek better labor opportunities and higher incomes. For instance, in a study conducted by the Asian Research Centre for Migration in 2003 out of a sample of 100 Burmese migrants 80% reported that their main reason to migrate was unemployment at home.
On the other hand, through labor migration the sending countries find labor outlets for the exceeding labor supply. Therefore, migration helps reduce unemployment in the countries of origin. In Vietnam, government promotes export of labor to combat unemployment and has 400,000 workers abroad. Thailand since the early 1980s has promoted the out migration of workers. In fact, most GMS countries have agreements to legally send their nationals to work in developed countries, mainly in the Middle East, Malaysia, and East Asia.
From the perspective of the receiving country, labor migrants help cover a labor demand that is not internally met. Unskilled migrants are usually found in Thailand working in low skilled and non attractive jobs in sectors such as agriculture, tourism, domestic work, construction and fisheries.

9. II. The World Bank Program: Benefits Continued
Economic growth in receiving country:
Migrant workers contribute to economic growth in Thailand
Migration maintains/increases productivity in certain sectors in Thailand
Poverty reduction in sending country:
Migration helps reduce poverty in household of origin through remittances
(Lao, Cambodia, Vietnam)
The study conducted in 1996 by the Thailand Development Research Institute found that the removal of foreign workers from Thailand would reduce the total GDP by around 0.5% per year.
There is also evidence that labor migration has contributed to the growth of regional economies and certain sectors in Thailand. Some labor intensive firms in industries such as the garments one would not have survived without the influx of labor migrants. Migration has also prolonged the life of agricultural industries under threat of extinction because of high labor costs and labor shortages. The analysis of the 2003 Agricultural Census data found that migrant workers are present in more regions and sectors than its commonly acknowledged.
Cross-country analysis shows significant poverty reduction effects of remittances: a 10% increase in per capita official remittances may lead to a 3.5% decline in the share of poor people. On the micro level, remittances are also associated with increased household investments in education, entrepreneurship, and health—all of which have a high social return in most circumstances.
Different studies show that remittances in the GMS play a determinant role in reducing poverty. As an example, the survey conducted in Prey Veng found that for 91% of the sample households remittances had a very relevant weight in the household economy. The first areas of investment are health and education, followed by debt repayment. This is also true of the rest of the countries in the GMS: there is anecdotal evidence of the relevant role of remittances in households in Lao and Vietnam.

10. II. The World Bank Program: Costs of Migration
Risks faced by migrants in pre departure, during migration, at destination and upon return
Social impact on receiving communities
Effect on local wages in receiving communities
As for the costs of migration, they are mostly socio-political.
Due to the fact that migration in the GMS is mostly irregular, migrants are exposed to different risks during the entire migration process.
The lack of access to information on the nature of employment, on living conditions, on their rights and duties (including registration process and benefits) forces migrants to use services of illegal intermediaries, with high risk of deception.
During migration they face the risk of arrest, being abandoned by smugglers, harassed by the police, and at times trafficked into jobs they did not intend to undertake (from Burmese sent on fishing boats to commercial sex work).
Migrants also face multiple risks at destination, including discrimination in work place, irregular work and income, limited access to social services, etc. The analysis of the Kanchanaburi set of data showed that non Thai households are much poorer than Thai households all else equal. Also the access to social services such as education was found to be worse for non Thai households. The analysis also found that living in a non Thai village has a negative effect on the economic status and the school enrolment in general.
Migrants face other risks upon return to their communities, such as family breakdown, difficult social reintegration or unemployment.
Some negative social impacts of migration on receiving communities are related to illiteracy and difficulty in communication between migrants and locals, and fear of health issues from unsanitary living conditions and lack of access to health services.

11. II. The World Bank Program: Knowledge Gaps
Flows and impacts of remittances
Economic contribution of migrants
Impact on local wages and employment
Impact of migration on migrants’ earnings
Impact of migration on poverty and living standards of families back home
In this first phase of research several information gaps to be covered in next phases have been identified.
1- We need to improve the knowledge on the size of remittances
2- Improve the understanding of the economic contribution of migrants to receiving countries,
3- Improve the understanding of the impacts of migration on local wages and employment.
4- Additional analysis of the impacts of migration on the earnings of migrants
5- Additional analysis on the impacts of migration on poverty and the living standards of families back home is required

12. II. The World Bank Program: Next steps
Fill the knowledge gaps highlighted – irregular migration in Thailand and impacts on local employment and wages
Improve data collection efforts to capture migrants in household surveys
Broaden analytical approach to more countries
Help integrate results in the development of policies
In the next phase, the World Bank will aim to try fill some of the knowledge gaps found during the first phase of stocktaking and research. In collaboration with IPSR, Mahidol University, we are conducting a new study to estimate the irregular migration flows in Thailand and their impact on local wages and employment. We are planning to do that using a model previously employed for the same purpose in OECD countries. Using data from the registration system and from labor surveys at the district level, we aim to analyze the differences in wages and employment levels between the districts with high concentration of migrants and those where there are not as many.
Also in next phase of the program we will be working with NSO, in partnership with IOM, in its efforts to incorporate migrants and their dependents into the sampling framework of household surveys, by beginning with the 2010 Population and Housing Census and other household surveys. We will also strive to disseminate and broaden this approach to the rest of the GMS countries.
The medium term goal of the program is to become part of the active dialogue with governments and integrate the results from the analytical work into development policies and ensure that the availability of more information is of practical use to policymakers.