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Migrant workers projected to send less money home

Sorn Sarath / Khmer Times Share:
Migrant workers arrive in Poipet after being deported from Thailand. Khmer Times

Money sent back by Cambodian migrant workers in 2020 is projected to decline to $1.4 billion because of COVID-19, according to a World Bank report.

The report, called “Migration and Development Brief Phase II”, released on Thursday, shows  formal remittances to East Asia and the Pacific region are projected to fall by 10.5 percent in 2020 to $131 billion.

Money sent to China is estimated to be $59.5 billion followed by the Philippines and Vietnam at $33.3 billion and $15.7 billion respectively. Indonesia is estimated to be $9.8 billion, Thailand ($6.1 billion), Myanmar ($2.2 billion) and Cambodia ($1.4 billion), according to the report.

The projected declines in remittances would be the steepest in recent history – steeper than the 5 percent reduction recorded during the 2009 global recession.

“The foremost factors driving the declines are weak economic growth and uncertainties around jobs in migrant‐hosting countries, a weak oil price and, in many remittance‐source countries, an unfavourable exchange rate against the US dollar,” the report said.

The lockdowns and travel bans left many migrant workers stranded in their host countries, unable to travel back. More recently, however, return migration has been reported in all parts of the world.

According to the report, about 120,000 Cambodian migrant workers are said to have returned from Thailand. This is more than 10 percent of all Cambodian workers
in that country. It said there are more than a million Cambodian workers in Thailand who are mostly in low‐skilled occupations. Many of them are undocumented.

Several countries with Cambodian migrant workers in the region are anxious to resume overseas placements of their workers, the report noted.

Last year, 1.2 million Cambodian workers employed in Thailand, South Korea, Japan, Singapore, Hong Kong, Malaysia and Saudi Arabia sent home some $2.8 billion in remittances, according to figures from the Ministry of Labour and Vocational Training.

Ngeth Chou, a senior consultant for Emerging Markets Consulting, said earlier this year that, according to research before COVID-19 emerged, Cambodian migrant workers in Thailand sent on average about $300 a month home. With more than 120,000 returnees, the country could have lost out on $36 million a month.

Mar Amara, ACLEDA’s Bank’s executive vice-president and chief financial officer, said COVID-19 has basically affected transactions in both remittance and investment capital flows.

“Money transactions have been affected in general because tourism and investment capital have been stalled,” she said.

The World Bank said the gap between remittance and foreign direct investment (FDI) flows are expected to widen further in 2020 because FDI flows have declined more sharply than those of remittances.

According to six months of data this year, money sent back home by workers from South Korea alone through ACLEDA was $12.54 million, a decline of 12.34 percent from $14.31 million in 2019.

Hong Vannak, a business researcher at the Royal Academy of Cambodia, said the government has put many measures in place to support small and medium enterprises to maintain  employment while encouraging returned migrant workers to join the agriculture sector.

“The country’s construction sector also helps to absorb the workforce during the pandemic,” he said, adding COVID-19 “has reduced the money sent back home while some [who stayed] receive less pay so they are not be able to send back as much as before”.

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