Home » Labour market reform » “Circular migration a possible Thai-Myanmar compact?” by Dr Zaw Oo, Nikkei Asian Review

“Circular migration a possible Thai-Myanmar compact?” by Dr Zaw Oo, Nikkei Asian Review

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CESD’s demographic research surveys in Mon State in 2015 revealed some startling figures on migration – nearly half of all households surveyed had sent at least one person to live and work in Thailand. Dr Zaw Oo, CESD Executive Director, discusses the research results, and the impact of these, in an article in the Nikkei Asian Review on 23 June 2016. To manage this trend, Dr Zaw Oo proposes a long-term compact between Thailand and Myanmar, based on the concept of “circular migration.” Such a compact could help Myanmar migrants in Thailand integrate better, providing better and higher-skilled manpower, while also assisting migrants when they return to Myanmar.

Nikkei

Thai Foreign Minister Don Pramudwinai, left, shakes hands with his Myanmar counterpart and de facto leader Aung San Suu Kyi, following their meeting in Naypyitaw on May 9. (Source: Nikkei Asian Review)

The article in the Nikkei Asian Review, 23 June 2016, is copied below. It is also accessible on the Nikkei Asian Review website.

From the Nikkei Asian Review

Commentary: Zaw Oo – Circular migration, a possible Thai-Myanmar compact?

When Myanmar in 2014 conducted its first comprehensive census in 30 years, the country was shocked to discover that some millions were missing from the count, which came in at around 51.5 million people. Last year, when I was conducting demographic research surveys in Mon state in southern Myanmar, near the Thai border, I saw another alarming trend: Almost every other household had sent at least one person to live and work in Thailand. This labor migration has significantly affected the Mon region. Agriculture, the mainstay of the economy, is shrinking; manufacturing and food processing factories are struggling for survival; and the social fabric is collapsing with many families torn apart as they seek work elsewhere.

Yet, every youth I came across dreamed of working in Thailand. Most migrant-dependent households are happier with increased income from remittances. The parents are so proud of their young sons and daughters for taking the most challenging journey of their lives, crossing war zones, avoiding traffickers, hiding from immigration and border police, and dodging sex traders before eventually landing jobs that pay three times more than in Myanmar. With their hard-earned remittances, Mon state is now glittering with golden pagodas — a definitive sign that the region is indeed richer than other ethnic states in Myanmar. But does the glitter hide the fact that this state, with its vibrant history and culture, is stuck in a vicious cycle of migration in which generations have had to find work overseas to survive?

The crisis in Myanmar was an opportunity for Thailand to solve its own “middle-income trap.” For many decades, cheap labor from Myanmar sustained Thai industries — for example in the service sector, keeping Thai beaches pristine for increasingly demanding tourists, or in construction or other manual labor. These workers also helped Thai politicians to adopt populist policies such as a minimum wage for their own workers. With many Myanmar migrants who are ineligible for visas working at below minimum wage, the policies have had minimal impact on Thai industries while boosting the political capital of populist leaders.

In 2009, however, Thailand made the first move to improve conditions for our migrant workers, undertaking to regularize and streamline procedures. Myanmar reciprocated later in 2011 with moves to properly document and protect the rights of these migrants. International organizations applauded this partnership. But will this constant supply of cheap labor from neighboring Myanmar help Thailand resolve the problem of living with second-class citizens who have not integrated into its society?

Myanmar State Counselor Aung San Suu Kyi’s visit to Thailand from June 23 to 25 could be a chance to reflect on the existing bilateral agreement on migration beyond short-term adjustments. The authorities on both sides can learn the lessons from the global crisis in migration and seize the occasion to develop a long-term solution to problems facing migrant labor before the current challenge turns into a crisis. Thai leaders must offer a practical solution to a Myanmar leader who is committed to bringing home millions of migrants and refugees. However, bringing them home, though desirable, is neither feasible nor practical at this stage of development of the Myanmar economy without help from Thailand.

New concept for an old problem

A potential solution for a long-term compact should be based on the concept of “circular migration.” Under an integrated, jointly approved bilateral policy and agency or authority on migration, Thailand should do more to help Myanmar migrants integrate and provide better and higher-skilled manpower. Labor recruitment agencies, for example, could regulate against abuses and exploitation, and could also be incentivized to train, retrain and upgrade the skills of newly arrived workers. Thousands of political refugees should also be eligible for such training.

Myanmar should step up verification procedures and set up special services for returning migrants with job placements and small-business loans. Circular migration, wildly touted as a solution for the European migrant crisis, is possible here because Thailand has been ahead of Myanmar for decades. Both labor markets should be able to absorb new arrivals and old returnees with minimal costs but with superior benefits for industries at different stages of growth. Of course, both countries must adopt the following policy measures to create an enabling environment for this compact to work.

First, both authorities should recognize the importance and cooperate to develop parallel capital flows that enhance circular migration. Remittances from migrant workers do help reduce poverty in Myanmar but they do not help its macroeconomics. Remittance flows through black-market, informal “hyundi” or “hawala” fund transfer systems do little to help monetary policies. While central bankers have little idea what is going on through these informal remittance channels, the underworld thrives on them. Not only does Myanmar lose huge national income, but these illicit flows could easily destabilize the nascent exchange-rate system in Myanmar. All the additional initiatives such as financial literacy, microfinance for migration and mobile money that fall under the financial inclusion agenda adopted by the Association of Southeast Asian Nations in 2014 can be accelerated to benefit the workers before and after they migrate.

Second, enhanced trade, not humanitarian aid, should be the focus of bilateral discussions. Both countries should not lose another chance to discuss enhanced trade cooperation. For the first time, Myanmar now enjoys benefits under a generalized scheme of preferences with the European market and soon with the U.S. Thailand can take care of the value-added component of trade such as quality assurance and destination compliance to help Myanmar’s nascent industries in garment, footwear, processed foods and green goods headed for high-end markets.

The margins of such trade privileges should help both countries to share the benefits amicably. Nonetheless, it was Thailand who set up all these industries such as the ones in Samut Sakhon, an important stopover destination for Suu Kyi on her current trip. Now is the time for these industries to use the same workers but relocate them to Myanmar to take advantage of the trade privileges. In this regard, the restoration of the generalized system of preference with the U.S. can be about humanitarian help too.

Third, both leaders should think of developing the Dawei special economic zone with due consideration to the human aspects before they think of roads, trains and ports. This SEZ and a few other border economic zones can adapt and prioritize employment of returning migrants. While Thailand can continue to sharpen its commercial strategies to turn the Dawei SEZ into reality, Myanmar must design it to maximize its developmental potential. When two countries synergize their commercial and development needs, it is a win-win for all. A third winner can be the Japanese government, which is shaping up to be a key partner under a “Thailand plus one” formula to expand its investments. Dawei SEZ can offer a bonus because its developmental goals should attract more responsible investors and international financiers.

I have promised many Mon friends that the good times are drawing nearer. In fact, such dreams are on their way already to becoming reality, as the two countries embark on talks about a possible compact on migration.

Zaw Oo, CESD Executive DirectorZaw Oo is Executive Director of the Center for Economic and Social Development in Myanmar; he was a presidential economic adviser in 2013-16.