JoumaIoflntemationalEconomicStudies(1998),No.12,47-55 o1998ThelnstituIco「ComparativcEconomicStudies,HoseiUniversity InternationalLabourMigrationandWorkers, RemittanceinAsia YoshieShimane Em"omicsDepq"me"LTAeJnpα〃Reseα"hIjzsZitzJZe,LmTired 1.Introduction Inadditiontointer-regionaltradeandinvestment,labourmigrationisalsoa commonfbatureinAsiaandinsomecountriestheworkers,remittanceplaysan importantroletosupportbalanceofpaymentsdencitfbralongdecade.Unliketrade andinvestmenthowever,workersmigrationhasnotcontributedmuchtoeconomic growthinthosecountrieslnordertoutilizereturnedmigrantsandremittanceto affecteconomicgrowthbetter,somepreconditionsareneeded 2.TheActualSituationofMigrationandRemittance ItakefburNewlylndustrializingEconomies(NIES:SouthKorea,Taiwan, HongKongandSingapore),fburAssociationofSouthEastAsia、Nations(ASEAN: Malaysia,Thailand,Philippineandlndonesia)andfburSouthAsianCountries (India,Pakistan,BangladeshandSriLanka)toanalyzetheactualsituationofmigra‐ tioninAsiaMigrantcanbeofvarioustypessuchascontractedworkers,emigratio、, refngeesandsoon,buthereanalysisisfbcusedoncontractedworkerswhointendto earnmoneyandtoreturntheirhomecountriesaftersomeperiod・Workers,remit‐ tanceisdefinedasapartofthelabourincomeeamedabroadbythecontractedwork‐ erswhichissentbacktotheirhomecountriesi). (1)TheActualSituationofMigrationandRemittance a・TheGeneralSituationofLabourMigration Trendsofthelabourmigrationwerecausedbytwooilshocksduringtheseven- tiesAtthattime,someAsiancountriesencouragedlabourmigrationtotheGulf countriestoearnfbreigncurrencywhichwasbadIyneededtosupporttheiroilim‐ portsandrepaymentoffbreigndebt・ Thenumberofthemigrantworke応fiPomthePhilippines,Thailand,Indonesia andfburSouthAsiaasatotalreachedL7millioninl992、Inthosecountries,labour migrationisalsoregardedaSatooltoeasedomesticunemploymentproblems・Howevertheproportionofthelabourfbrcewhomigrateisatmost2%inSriLanka,and 47 lntcmationaILabouTMigrationandWo「kc庵,RcmittanccinAsia muchlowerinothercountries,soitcannotbesaidtohaveeasedtheunemployment problemmuch Eventoday,majorrecipientsofmigrantworkersaretheGulfcountries,buttheir importancehasbeendecreasingsincel983andTaiwan,SouthKorea,andMalaysia havehostedincreasingnumbers(Tablel〕Alargepartofthelabourmigrationto theGulfareawasofconstructionWorkers,andengineersandotherspecialistsand theirmcreasednumbershavelaterreHectingtheincreaseddemand・Mostofthe labourmigrationtotheAsiancountrieshasbeenofunskilled-workersengagingin serviceindustriesandalargepartofitisfemaleworkers, Inthehostingcountries,thenegativeefTbctsoflabourmigrationsuchasdelayin thechangesintheindustrialstructureandanincreasedburdenonsocialsecuritiesare oftendiscussed、Butinthelabourexportingcountries,meritssuchastheeasingof unemploymentproblems,theincreaseoffbreignreserves,thedevelopmentofwork‐ ersjobskillsandsoon,areoftenclaimedbyproponentsHowever,theactualexis‐ tenceofsuchmeritshaveyettobeproven・Sometimesreturningmigrantsoriginally fromruralareasworsentheunemploymentprobleminurbanareasbyelectingtostay thereevenwhentherearenojobsavailable・Also,retummigrantsfindfbwopportu‐ nitiestoutilizeskillsacquiredabroadbecauseofthedifTbrencesintechnicalleveland industrialstructurebetweentheirhomecountriesandthehostcountrieswherethey onceworked. TablelASianLabourMi印ationbyDestinationsl993 (Number5Migating) lIlliAlBangIade ]’70401118600 40 、’IC RenoDKc r Ij mnUd ]996 mlIO( 4971416-784,Z44SOIH Sourcc:Wickramasekara,P.,Re“"1,℃"“m71empomびMjgmlio〃i〃化in,1995,Tablc6. (Rc化rencedocumcmatlhcSymposium“MigrationaIudthcLabourMarkctinAsiaimLhcYcnr2000” whichwasheIdundcrthcjointauspicesoftheGovernmcnIo「Japan,thcOECDandthcJapanlnstitute ofLabour) b・GeneralSituationofLabourRemittance TheHowoftheremittanceinthel970,swasregardedasapartoftheflowof Oil-DollarsfiPomtheGulfareatotherestoftheworld lnthel980s,aftertheexternaldebtcrises,thecapitalflowsfromthedeveloped countriestothedevelopingcountriesdecreasedanddevelopingAsiancountriestried toincreaselabourexportinordertoobtainfbreigncurrency. 48 YoshieShimane Chartl DependenceontheRemittance 45 ChiIla 40 ◆ 50505050 332211 (家):呵匹』Qo、四口目]。ご二目三 シ…:T… 、◆RepofKorca SingaPore ◆,ndonesia◆ India Philippines Pakistan ◆◆◆ SriLanka Banglade部 5101520253035 Rcmittancc/FolUgnCurrcncyEarnilugsRatio(%) Sourcc:IMF,Balancco「PaymentsStatistics Chart2BalanceofPaymentsStructureoftheTmditionalLabOurExporlingCountries 15,000 10,000 5,000 0 迩獺鵯iiW:lMMl1MiLlilLliMillll 0 0 0m 0 0 5 m 卯伽 505 22 1 0 00 ▲“▲▲▲ Note:Tmditionallabourexportiuugcountricsaに;thePhiIippines,India,Pakistan,BanglndeshandSriLanka、 Source:IMF,BalanccofPaymcntsStatistics Thedegreeofdependenceontheremittancetoearnfbreigncurrencyisthehighestin theSouthAsiancountries(Chartl).Theamountofremittanceisequaltothe amountoftradedeficitinBangladeshInIndia,PakistanandSriLanka,itisequal to80to90%oftradedefIcitandinPhilippineitisalmostequalto50%ofthetrade deficit、IncontrasttothePhilippines,Indonesia,whichhasaboutthesamelevelof industrializationasthePhilippmes,labourmigrationhasnotbeensignificantin number・ThisdiffbrencecanbeattributabletothedifYbrencesinthepolicyofthetwo governmentsandthenumberofthepeoplewhospeakEnglish・ThefburNIEs 49 InternationalLabourMigrationandWorkers,RemittanceinAsia receivemorefbreignlabourthantheyexporL HereldefineSouthAsiancountriesandthePhilippinesastraditionallabour exportingcountries,asalargepartoftheirtradedeficitisfmancedbylabourremit‐ tanceChart2showsthatinthosetraditionallabourexportingcountries,fbreign capitalflowsinthefbrmofremittanceisalargerandmorestablesourceoffbreign currencythanfbreigndirectinvestment. (2)BackgroundoftheLabourMigration Manycountriesbothreceiveandexportlabouratthesametime,andthewage levelsoflabourexportingcountriesarenotthelowest、Fromthis,wecantellthe backgroundofthelabourmigrationisnotsimplyattributabletothewagelevels,but ismorecomplex・Thebackgroundofthelabourmigrationscanbeidentifiedas fbllows; a・PolicyandlnstitutionalFramework Thepolicyandinstitutionalframeworkplaysaveryimportantroleinlabour migration, Asfbrthepolicy,somegovernmentdeHnelabourmigrationasamajortoolto earnfbreignCurrency,andencourageworkerstomigratethroughvariouspolicy tools、Forexample,inthePhilippines,governmenttrainsworkerstomeetthe demandofthelabourreceivingcountries・ Tosupportgovernmenteffbrts,privatesectorcompaniesalsoplayasuplimental role、ForexampleinMalaysia,therearemorethanl70privatecompaniestohelp migrationprocedure. blnternationalizationoftheLabourQualification EspeciaUyfbrtheskilled-workers,internationalizationofthelabourqualiHcationisoneofthefactorswhichpromoteslabourmigrationThisiswhysomecouL triessuchaslndiaareabletoexportmanyskilled-workers・Indiaeducational institutionsoffertraininginhigh-techskillstomatchinternationalstandardsand historicallyhavebeensendingmanygraduateabroad c、IncreasedForeignDirectlnvestment lntroductionoffbreigndirectinvestlnentalsopromotelabourmigration.Work‐ ersfromruralareaswhoonceworkedporafbreigncompanyinanurbanareadonot nonnallyretumtotheirhometownsbutstayintheurbanareaorfindanewjobin fbreigncountries・I、part,thisisoftenbecausetheyhavefbunditratherdifficultto beacceptedinthecommunityoncetheyhaveexperiencedthecultureofurbanlife, especiallyinthecaseoffemales. d・Internationalizationoflnfbrmation lncreasedavailabilityofinfbrmationthroughmass-mediaorlabourmigration itselfencouragesmigrationAsmorelabourersworkabroad,moremigrationis encouragedbecausemoreinfbrmationaboutopportunitiesispassedamongtheir relativesoraquaintances・Thismovemtntiscalledthe``MigrationChain,,. 50 YoshieShimanc 3.ImpactontheEconomicDevelopmentandlmplications fbrtheFuture (1)ImpactontheEconomicDevelopment WehaveseenthatthereisactivelabourmigrationinAsiaandfbrthosetradi‐ tionallabourexportingcountries,remittancehasbeenanimportantwayoffinancing extemalimbalances・Intraditionallabourexportingcountries,exportationofgoods willnotbeexpectedtoexpandrapidlybecauseofthelackoftechnologyandpolicies ofputtingmoreemphasisonimportsubstitutioninsomecountries・Atthesametime labourshortagesinMalaysiaandSingaporeisbecomingsevereandthedemandfbr labourimportisincreasing・Consideringthoseconditions,itismoreprobablethatin thetraditionallabourexportingcountries,relianceonthelabourmigrationandtheir remittancetofinanceexternalbalancewillbecontinuetobequitehighfbrsometime・ Nextwemightconsiderifitis,possibletoutilizethelabourmigrationandtheir remittancenotonlytofinanceextemaldefYcitbutalsotoenhanceeconomicdevelop‐ ment・Ifitispossible,weshouldthenaskwhatkindofconditionsareneeded、 Toanswerabovequestions,Ihavecomparedtheimpactoflabourmigrationon theeconomicdevelopmentinSouthKoreaandtraditionallabourexportingcountries・ SouthKoreaisatypicalcaseofafbrmerlabourexportingcountrywhicktookaset ofpoliciestoencouragelabourmigrationandutilizedremittancefbritseconomic developmentandhassincegraduatedfiFomthestatusofthelabourexportingcountry toonewhichimportslabour・ Therearetwomainpointsfbrthiscomparativestudy・Oneiswhetherremit‐ tancetothehomecountryisdonethroughfbrmalchannelsorinfbrmalchannels・If thelabourincomeisconsumedabroadorremittedthroughinfbrmalchannels,remit‐ tancecountedinthebalanceofpaymentsbecomesverysmallanddoesnotcontribute toeasingtheexternalpaymentproblem、Theotheriswhetherremittedlabour incomeisutilizedtofInanceinvestmentinthestrategicallyimportantareaofindus‐ triesinthehomecountry・Evenwhenremittancehasbeendonethroughthefbnnal channels,ifitisutilizedfbrtheincreaseofimportsorinvestedinthoseareaswhich donotcontributetolongtermgrowth,impactontheeconomicdevelopmentbecomes limited. aChanneloftheRemittance Asfbrthechanneloftheremittance,Iwillexaminwhetheri)Migrantworkers labourincomeisspentabroadorremittedtotheirhomecountries,andii)remittance isdonethroughfbrmalchannelsorinfbrmalchannels・ Therearenotmanystatisticsavailablewhichshowhowmigrantworkerslabour incomeisspent,ButitisknownthatinthecaseofmigrantlabourfromAsiancoun‐ tries,workersaimtosaveandremitlabourincometotheirhomeii).Soitcanbesaid thatmigrantsfi・omthetraditionallabourexportingcountrieshavethesame charactor、Asfbrthewayofremittance,therearesomeestimateswhichshowthat migrantsofthetraditionallabourexportingcountriestendtoremitthroughtheinfbr‐ malroutes(Table2).Incontrast,migrantsfromSouthKorearemittedabout90% oftheirlabourincomethroughthcbankingsystemiii). 51 lntcmatiomalLabourMigrationandWorkers,RcmittanceinAsia Table2InfDrmalRemittancesasaPersentageofTotalRemittances Bangladesh lmdin Korea Pakistan Philippines SriLnruka Thailand ijll幽市I Source Mahmud(1989) EscAoO987) HyunO989) ILO/ARTEPO987) TanandCanlasO989) RodrigoandJayatissa Tingrabadth(1989) Sourcc:AthukoraIa,P.,EnhancmgDevelopmentlmpacto「MigrantRcmittances:A RevicwofAsianExpcrienccs1InterIMltionalLabourOrganization,1993,p,8. AccordingtoAthukorala,migrantsけomthePhilippines,Pakistan,andlndia,remit throughinfbrmalchannelsfbrthefbllowingfburreasons,i)over-valuationofthe localculTencies,ii)restrictionsoftradeandcapitalaccounttransactions,iii)low interestratesofthefbrmalfinancialsectorandiv)asaresultofabovethree,the fbrmalfinancialnetworkisunder-developediw). However,alsoinSouthKorea,conditionsi)andii)changedgraduallyduring l980s,sothatabovefburpointsdonotsuffIcientllyexplainthereasonwhythelabour incomeisremittedthroughinfbrmalchannelsincaseofthetraditionalIabourexport- ingcountriesotherthanSouthKorea、Iwouldpaymoreattentiontothefactthati) SouthKoreanmigrantswereobligedtoremitmorethan80%oftheirlabourincome totheirhomecountryandii)thebankingnetworkofSouthKoreanbanksaredevel‐ opedbytheSouthKoreangovernmentandflnancialauthority・Also,iii)thefact thatSouthKoreancurrencyWonlackedtheconvertibilitybutlabourincomewere paidintheWonv). ThosefactorsidentifiedintheSouthKoreancasedonotalwayssucceedinencouragingmoreremittancetobedonethroughfbrmalchannels、TheThaiandPhilippinegovernmentshavetriedtointroduceoractuallyintroducedpoliciessimilarto SouthKorea,s,buttheyfailedtogetsigniHcantresultfromthem・Inaddition,to fbrcecompanieswhichemployfbrwhichmigrantworkerstopaywagesintheir employees,homecountriescurrencyorthroughtheirhomecountry,sbankingsystem arenotrealisticpolicyoptions、ThepolicyinterventionoftheSouthKoreangovem‐ mentweremadeefYbctivepartlybythepoliticalcircumstancesofbemgunderpres‐ surefromNorthKorea Torelyonthepolicyoptionsofcorrectingover-valuationoftheirculTencyorto deregulatingrestrictionsregardingtradeandcapitalaccounttransactionstoenhance theremittancethroughfbrmalchannelsisratherdangerous・Becausederegulating capitalaccounttransactionscancausecapitalnight・Atthemoment,thegovernment policygoaloftraditionallabourexportingcountriesarethecombinationofi)tokeep over-valuationoftheircurrenciesandreguratingcapitalaccounttransactionsandii) tointroducesomeincentivemeasurestoremittancesuchasadmittingfbreigncur‐ rencyholdingofremittedmcomeandputsomepremiumonfbreigncurrencydepositsinthebankingsystem、Thiskindofincentiveschemehashadastrongeffbctto encouragefbreigncurrencyremittance、Inlndiainlatel980,s,thefbreigncurrency depositsoftheNon-Residentlndians(NRIs)becameequivalenttoabout30%ofthe 52 YoShieShimane currentaccountdeficit・However,inearly1990,s,inthefaceoftheGulfCrisis,those fbreignculTencydepositsweredrawnoutfiPomthecountryandworsenedthefbreign exchangecrisisinlndia・Fromthisexperience,relyingonincentiveschemecanbe saidtobeariskyoption. b・ImpactonlndustrialDevelopment Thesecondpointofcomparisoniswhetherremittedlabourincomeisinvestedin thestrategicallyimportantareasofindustryornot・Ingeneral,remittedlabour incomewouldi)beinvestedinthoseareasdirectlyviathefinancialmarketorii) stimulateinvestmentasdemandincreasesduetoincreaseddisposableincome・In mostofthetraditionallabourexportingcountries,however,financialmarketplaysa limitedroleineithermobilisingsavingbecauseoflackoftrustamongsaversor providingfimdstoindustrialistsbecauseofthelackofabilityofbankstoinvestigate investmentprOjectproposals、Atthesametime,returningmigrantstendtoprefer fbreign-madedurablegoodslikehomeappliancesafterhavingbecomeawareoftheir valuewhilestayingabroadThistrendisencouragedbythepolicytopermitreduced importdutiesongoodsbroughtbackbyreturningmigrantsasincentivestowork abroadLikewise,increaseddemandwouldnotmeanincreaseddemandfbrdomesticallyproducedgoodsbutincreaseimports・ Incontrasttoabovetypicalsituationinthedevelopingcountries,inKorea,i) investmentwasfimdedbyinternalgenerationofcompanieswhichraisedprofitinthe Gulfareaandnotfimdedthroughfinancialmarket,ii)thegovemmentadopteda policytodiscountpricesofdomesticaUymadehomeappliancesfbrretummigrants inordertoincreasedemandfbrthoseindustries・Theflrstpointwasmadepossible becauseKoreanconglomerateshadthrivedbyeamingproHtsfi「omconstruction prQjectsintheGulfarea、Koreanconstructioncompanieshadadvantagesindoing businesstherebecausegovernmentprovidedbudgetaryandfinanciallypreferencial treatmenttothem,aswellastoexportingcompanies、Thesecondpointwasmade possiblebecausetherewerebaseofimportsubstitutionofdurablegoodsunderthe FirstDevelopmentPlan(1962-66)andothergovemment,spolicies・TheWorldBank mentionedintheEastAsianMiraclethatintroductionoffbreignfimdsandtechnologiesandexportpromotionmeasurescontributedtoeconomicdevelopmentmtheEast Asiavj).Butinl960,sand1970,s,theattempttointroducefbreigndirectinvestment wasnotsuccessfUlbecauseSouthKorealackedinternationaltrust・Inaddition,ex- portationwasstagnantbecauseofoldequipmentandtechnology・Undersuchconditions,labourexportandKoreanbusinessventuresintheGulfareacontributedtoease fbreigncurrencyshortageandallowneededimportsofcapitalgoodsand intermediallygoodsD Insometraditionallabourexportingcountries,likePakistan,governmenttriesto promoteinvestmentbyreturnmigrantinthemselvesbyin“SelfLEmployment Schemes,,whichutilisestheirincomeearnedabroadandincludeslowerrateoflend‐ ingButmanyreturnmigrantfmdsitmoreattractiveandsafbrtoinvestinrealestate toguaranteestableincomelikeasubstitutefbrpensionorretailbusinessorother shortterminvestmentthantoinvestinmanuftlcturing. (2)ImpactoftlneStructuralAdjustmentPolicies BecauseoftheGulfCrisis,remittanceshomtheGulfareahavedecreascdand 53 lmtemationalLabourMigrationandWorkers,RemittanceinAsia mosttraditionallabourexportingcountrieshaddifTicultyinrepayingextemaldebtor import・ThiswasthereasonwhytheyintroducedtheStructuralAdjustmentPolicies aftertheGulfCrises、 ThebeliefbehindtheStructuralAdjustmentPoliciesis,,,fundamentalproblem ofdevelopingcountriesarecausedbygovemmentintemvention,,、Thisbeliefseems ataglancetoexplainthereasonwhylabourmigrationandtheirremittancescould nothavecontributedeconomicgrowthForexample,governmenttriedtoincrease efficiencyofuseoffbreignculTencyandtosubstituteimportsbyover-valuationof thecurrencyandrestrictionoftradeandcapitalaccounttransactions,such internventionpolicieshadnegativeeffbctslikediscouragingremittancethrough fbrmalchannels・Anotherexampleisthatofincentiveschemestoencourageremittancethroughfbrmalchannelsbyofferinghigherinterestratemcreasedvolatilityof capitalmovement・ Itistruethatover-valuationofCurrency,regulationoftradeandcapitalaccount transactionsandcontrolofinterestrateshaddiscouragedremittanceandfinancial intermediation.Andbycorrectingallthoseinterventions,incentivestomigrateand remittohomewouldbestimulated、However,wemustnotbetoooptimisticbecause toomuchmigrationcouldbeabottlenecktoindustrialization,andtoomuchremit‐ tancecouldreducecompetitivenessofexportsbystrengtheningCurrency・Thereare aheadysomesignsoftroublesuchasinIndia,wheremostgraduatesofhighertech‐ nologicalinstituteschoosetoworkabroad,andinPakistan,wherereturmlnigrantare notwillmgtoworkathomebecauseofthewagegapandwaitfbrnextchancetowork abroadInSriLanka,teachersofvocationalschoolthemselvesareeagertofindjobs abroadandthiscausedasenousproblemi、qualityofthevocationaleducatio、 system,Somearguethatthiskindofbraindraincannotbeabottleneckofdevelopmentbecausethereisn,tademandlbrityetatthepre-industrializationstage・Non theless,inasensethatevenatthepre-industrializationstage,thewagelevelofengi‐ neers,hasbecomeclosertotheinternationalaverage,thisissurelyoneofthedisad‐ vantagesofstartingtheindustrializationprocess・Underthecurrentsituationwhere notonlycapitalbutalsolabourmovesbeyondnationalborders,wecannotassume thatbyde-regulatingtrade,somecomparativelyadvantageousindustrieswhichare determmedaccordingtocapitalandlabourallocationofeachcountrywouldgrow・ Labourmigrationfromdevelopingcountriestodevelopedcountriescancreatethe situationwheredevelopingcountriespayfbreducationandtrainingoflabourand developedcountriesutilizethosehumanresources,whichisasimilarproblemtothat betweenubanandruralareawithinnationalboundaries. (3)TasksoftheTraditiOnalLabourExportingCountriesfOrtheEconomic Development ThesituationwherelabourmovesbeyondnationalbordersmakesitdifHcultfbr developingcountriestorealizecomparativeadvantageofhavingcheapandabundant labour,Thetaskfbrdevelopingcountriesistoutilizetheirlabourdomesticallyand thisrequiresmoreactiveenterprises・Thecorefimctionofenterprise,sactivitiesisto combinelabour,capital,technologyandotherresourceslbrproduction、 Toestablishandenhancetheactivityofdomesticenterprises,vocationaltraining tomeetdemandfbrdomesticmarketshavetobegivenmoreemphasis・Alsointro‐ ducingfbreigndirectinvestmentcanbeausefUlwayofpromotinganenterprise,s 54 YoshieShimanc activities・ TherewasanargumentinJapanthatweshouldallowmorefbreignworkersto workinJapanasoneofwaysofpromotingeconomiccooperationwithdeveloping countries・Behindthisargument,therewasabeliefthatworkerscanaquireskillsin Japanandutilizethemathome・Butitismorelikelythattheirchancetoutilizethose skillsisverylimited・Therefbritisbettertocreateaproductionbaseindeveloping countriesandtrainworkerstomeetdemandofthoseenterpnses. Notes i)IntheBalanceofPaymentManualoflnternationalMonetaryFund,remittanceis devidedintothreecategories(Labourlncome,WorkersRemittances,MigrantTrans‐ hers).Althoughthosethreetermsareverypreciselydefined,itisdiffilculttodistinguishactualflowofmoney ii)Athukorala,P.,EnhancingDevelopmentlmpactofMigrantRemittances:AReview ofAsianExperiences,IntemationalLabourOrganization,1993,p、9. iii)Athukorala,P.,op・Cit.,plL W)Athukorala,P.,opcit.,p、6. iv)Athukorala,P.,opcit.,p、6. V)Kim,S,ContractMigrationintheRepublicofKorea:Intema V)Kim,S,ContractMigrationintheRepublicofKorea:IntemationalMigrationfbr Employment,IntemationalLabourOrganization,1982,p26. Vi)WorldBank,TheEastAsianMiracle,OxfbrdUniversityPress, 1993 55
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