Chapter 1: The Greater Mekong Sub-region (GMS) Labor Migration program.

The Greater Mekong Sub-region (GMS), with a population of 260 million, comprises Cambodia, Lao PDR, Myanmar Thailand, Vietnam, and Yunnan province in China. Geographically, it is located among the fast-growing economies of both South and East Asia. Despite marked disparities in economic development between its members, the sub-region is extremely dynamic with annual growth rates averaging above 6 percent in recent years. In the past, economic integration of the GMS countries was hindered by political factors, civil unrest and sometimes open conflict. However recently there has been growing momentum to seek new ways to cooperate and enhance economic growth. There are multiple regional initiatives underway to speed up the development of the sub-region, such as the East-West development corridor project to link Myanmar Thailand, Cambodia and Vietnam, as well as efforts to strengthen the framework for trans-border management of economic, environmental and social issues. (3)

The World Bank has developed a GMS regional assistance strategy ("Strategy Note on Economic Cooperation across the Mekong Sub-Region") which seeks to help the countries of the sub-region understand and internalize the benefits of cross-border cooperation. One of the four stated objectives of that strategy is to help countries develop a better framework for the flow and development of human resources. In support of this objective, in June 2005 the World Bank launched its multi-year GMS Labor Migration Program, which aims to: (i) improve knowledge about labor migration in the GMS focusing on the socioeconomic impact of migration on sending and receiving countries; (ii) raise awareness about these issues and their significance for poverty reduction at the highest levels of policy making; and (iii) strengthen the capacity of governments and development partners to refine and implement a regional system to facilitate and regulate labor migration. This report is one of multiple outputs of the first phase of that program.

1.1 Migration in the GMS: Opportunities for Regional Growth

Migration has been occurring in the sub-region for centuries, mainly with the Chinese moving southward and integrating into most of the Mekong countries. In recent years, however a range of economic, social and political factors have added sharply to the migratory pressures. The combination of demographic transition and upgrading of the skills of its workforce has left Thailand facing a shortage of unskilled labor As a sign of this growing shortage, unskilled agricultural real wages in Thailand more than tripled between 1985 and 2003. (4) Thailand's much higher incomes, fast growth, and more favorable social and political climate act as a magnet for people in surrounding countries trying to escape poverty. Lao PDR, Cambodia and Myanmar remain among the poorest countries in Asia, with some of the worst social and human development indicators in the region (Table 1.1). Employment opportunities outside of agriculture in these countries are scarce, and poverty widespread. For many poor households, migration offers an avenue, sometimes the only one, towards jobs and higher incomes, albeit often at a high risk to the migrants themselves. (5) Political instability, conflict and, in some cases, the existence of large numbers of internally displaced persons have also acted as push factors. For Thailand, migrants represent an important reservoir of cheap and flexible labor and a boost to its competitiveness in certain sectors (especially fishing and labor intensive agriculture, but also construction and tourism). (6)

Since much of the cross border movement in the GMS is irregular it is difficult to obtain reliable information on the true size of migration flows. Still, most research indicates that more than 2 million migrants have moved between GMS countries in the last few years due to economic reasons. (7) Thailand alone estimates to have 1.5 to 2 million regular and irregular migrants from the GMS currently living in the country and is also home to about I 50,000 refugees. (1)

Beyond the movement of mainly unskilled Cambodia, Lao PDR and Myanmar migrants into Thailand, other distinct and established patterns of migration flows exist within the Mekong Sub-region. These include the movement of higher skilled Vietnamese migrants into Cambodia and Lao PDR; and of skilled Chinese workers from Yunnan and Guangxi into Lao PDR and Myanmar Thailand, Cambodia and China are the main receiving countries in the sub-region, with Thailand by far the largest of the three in both absolute and relative terms. (8)

No reliable data series exist that can rigorously document an increase in cross-border migration flows from the GMS into Thailand. However different strands of evidence suggest that this has indeed been the case. There have been sharp increases in the number of migrant workers registering for work permits since 200I, as well as increased case levels of migrants treated at hospitals near the border and an increase in illegal border crossings as reported by the security forces. Taken together and in combination with the documented changes in both push and pull factors, these suggest that migration flows into Thailand

are increasing rapidly.

Uneven patterns of development and diverging demographic trends will ensure that these migration flows continue to grow in coming decades. The Thai population structure progressively resembles that of developed countries. While Thailand will increasingly face the challenges created by an aging population, the poorer countries in the sub-region, particularly Lao PDR and Cambodia, have population growth rates between two and three times higher than that of Thailand, and a rising share of people of working age (see Table 1.1). Figure 1.1 below illustrates these reverse population patterns in the sub-region, and how the gap is expected to widen in the following fifty years. While in Thailand the working age population growth is stagnating and is expected to become negative at the beginning of the next decade, in Lao PDR and Cambodia the same age group will keep on growing at a high rate for the next three decades. These demographic differences are likely to fuel continued migration for the next twenty years.

[FIGURE 1 OMITTED]

Much of this increased migration is likely to remain irregular with negative consequences for both sending and receiving countries, unless greater efforts are made to regulate and manage migration flows. The sending countries generally lack the capacity to properly manage the mass export of labor and to protect the rights of their migrant-nationals abroad. Receiving countries have fairly weak migration policy frameworks, which often have been implemented hastily as an 'after-the-fact' response to the arrival of large numbers of migrants. The lack of a legal framework to regulate migration puts migrant workers at a higher risk of abuse, and strengthens the prevalence of smuggling rings, who are also the main actors in human trafficking, be it for sexual exploitation or slave-labor Absence of an adequate legal and policy framework contributes to increasing the costs and risks of migration, and reducing its benefits.

1.2 Towards an Integrated GMS Labor Market 

The established pattern of migration flows within the GMS reflects the gradual emergence of an incipient 'regional' labor market. While this regional labor market is not yet truly 'integrated,' and despite lacking an established regulatory and legal framework, clearly a large and growing demand for labor in some countries of the region is met by migrants. Evidence demonstrates that workers have at least partial information on jobs and wage opportunities in neighboring countries, and make choices on where to work based on this information. (9)

As trade and transport flows continue to strengthen between GMS countries, we would expect this regional labor market to consolidate and expand. Indeed, the further development of a well-functioning sub-regional labor market is in many ways a precondition to long-term equitable growth in the region. While cross-border labor mobility alone will not ensure the prosperity of the sub-region's poorer members, it can make a significant contribution towards reducing regional disparities between GMS countries, hence enhancing economic and social stability. With access to regional labor markets, workers with few or low-paid employment prospects in the sending countries (Cambodia, Lao PDR and Myanmar) may find productive employment outside their national boundaries. Some of these workers may return home years later with money and skills to set up new businesses and help transform their economies and societies. Migrants, whether they return or not, may send remittances to families back home, contributing to increasing consumption and reducing poverty in their communities of origin. For the labor scarce countries of the region, access to an integrated regional labor market that can guarantee a steady and reliable supply of workers is critical to sustaining competitiveness in many labor-intensive sectors. Labor migration is thus a key element of a broader regional integration agenda.

Employers and private businesses in the receiving countries are aware of the importance of migration to their profitability and long-term competitiveness, and are actively lobbying the Thai Government to allow for greater migrant inflows. Private employers are the best placed to identify labor shortages and gaps where a steady flow of migrants may indeed be beneficial. But the private sector may not necessarily internalize the costs of illegal migration, or the social consequences of a system that provides few rights to migrant workers. The responsibility for creating a legal and regulatory environment that can facilitate efficient, equitable and humane migration lies squarely with the Governments of the region. An important aspect of this role is attention to safeguards for all parties involved.

Earlier examples of migration management in East and Southeast Asia show that legalizing migration, protecting migrants' rights and facilitating the remittance and productive investment of their savings can promote positive social and economic impacts of migration both in labor-sending and labor-receiving countries:

* In terms of human development, ensuring that all workers, local or foreign, and their families have access to education, health and social protection services lowers the negative externalities associated with an otherwise poorly integrated immigrant workforce. This enhances the productivity of workers, promotes the social integration of immigrants and limits the spread of diseases (including HIV/AIDS), illegal activities and social unrest. Ensuring that all workers are subject to the same labor standards also limits the unfair competition between immigrant and local labor and can help promote the status of women.

* From an economic perspective, a regulated system of migration allows governments from originating and receiving countries to collect taxes from workers and employers. Earnings from migrants also provide investment potential to labor-originating countries, and it is in their best interest that remittances be repatriated at the lowest cost, and kept securely as a coping mechanism in case of shock, and as a reserve for productive investment. Meanwhile, in labor-receiving nations, a proper savings system for migrant workers can support the local financial system.

* Strategically for governments, an appropriate and enforced legal framework helps reduce illegal migration and trafficking, and helps channel migrant remittances through the official banking system so that less is lost to smugglers and intermediaries. Proactively planning migration can then diversify the destinations of labor and diminish the risk that economic fluctuations in a single country of destination have too drastic an economic impact at home.

I.3 The First Research Phase of the GMS Labor Migration Program

Building an adequate, effective and humane legal and policy framework for migration in the GMS requires a solid foundation of knowledge and information on migrants, their characteristics, needs and impact in both receiving and sending countries. Such a foundation of knowledge, however does not exist in the GMS. What is known about migration in the sub-region is partial, in many cases anecdotal, and only very rarely analyzed from a joint economic and social perspective.

The first phase of the GMS Labor Migration program, launched in June 2005, sought to address some of these key knowledge gaps by: (i) reviewing and summarizing the existing regional literature on migration (much of it in Thai language); and (ii) analyzing existing and accessible datasets, some of which had not previously been analyzed, with a migration perspective in mind. This first phase of research was intentionally not ambitious: it meant to serve primarily as a stocktaking exercise, with a view to identifying the areas in which deeper more extensive work and especially quantitative data collection may be needed.

During this first phase, the work focused primarily on the socio-economic impact of migration on both sending and receiving countries, and on understanding the evolving migration policy framework and policy-making process in the sub-region. Due to data, time and resource constraints, the analysis was limited during this phase to Thailand, Cambodia, Lao PDR and Myanmar with a heavy focus on Thailand as the receiving country. The work has taken stock of available information, analyzed accessible datasets, merged quantitative and qualitative evidence, and actively engaged in dialogue with regional researchers, international partners, donors and government policy-makers from core line ministries.

Migration in the GMS has certain specific characteristics that condition the analysis. These include:

* The largely undocumented, or illegal, character of migration (which translates into lack of official data, a disincentive for migrants to reveal themselves and difficulties in capturing information about this population);

* The overwhelming informality of mechanisms to send back remittances, which does not allow for easy measurement of the size and use of the funds sent back home by migrants; and

* The lack of a clear distinction in many cases between domestic and international migration given the proximity of countries of origin and destination, the ease to cross borders, and the cultural homogeneity of people living near borders.

These characteristics, along with the limited regional capacities to collect socio-economic information on a large scale, heavily influence the type and quality of information that can be collected and analyzed. Hence, an important caveat to this report is that the analysis is based on weak quantitative data. First, coverage is far from complete: migrants are largely left out of existing quantitative surveys and qualitative information can only go so far in filling that gap. Second, to address the data gap, the report must make use of multiple data sources, not always comparable, and must mix qualitative, case study and quantitative data. This results in an analysis that is often less structured, more partial, and less quantitative than would be our ideal. However the triangulation of evidence and use of multiple sources does allow us to describe certain patterns and facts of migration in the GMS with some degree of confidence. This exercise also serves to document what are the most important data and analysis gaps, which would need to be addressed in further and more comprehensive work on migration.

This first phase of the research has produced the following outputs:

* Two sub-regional workshops on GMS labor migration, with participation of regional academics/researchers, international partners and donors active in the migration field (IOM, ILO, UNESCAP UNIAP Rockefeller Foundation, among others), and government counterparts from Thailand and Cambodia. (June 2005 and March 2006)

* Five background papers, commissioned from Thai and Cambodian research centers, including:

1. Chantavanich, Supang; Vangsiriphisal, Premjai; and Laodumrongchai, Samarn. Asian Center for Research on Migration, (ACRM); Chulalongkorn University. "Thailand Policies toward Migrant Workers in Myanmar". This paper reviewed existing qualitative data and case studies, as well as the significant stock of literature in Thai language on migration from Myanmar to Thailand. The paper presents a snapshot of: (I) the current patterns of migration between the two countries; (2) the problems and risks faced during migration; (3) the impact of illegality on working and living conditions; (4) the evolution of Thai policies towards migrant workers; and (5) the forces that influence the formulation and implementation of policies.

2. Chamratrithirong, Aphichat. Institute for Population and Social Research (IPSR), Mahidol University. "Profile of Labor Migrants from Myanmar Cambodia and Lao PDR: Analysis of the Population and Housing Census of Thailand, 2000". This paper utilizes (for the first time) the 20 percent sample from the 2000 Population Census of Thailand to analyze the demographic, social and economic differences between migrants and the Thai population at a national level.

3. Jampaklay, Aree. Institute for Population and Social Research, (IPSR) Mahidol University. "Migrants and Non-Migrants in Kanchanaburi: An Analysis at Household and Individual Levels". This paper uses a unique panel survey dataset from Kanchanaburi Province in Thailand to examine the demographic, social and economic characteristics of migrant-headed households and migrant communities in a province with a high percentage of migrants. The paper also analyzes differences between migrant and Thai-headed households in living standards and access to key social services such as education.

4. Bryant, John. Institute for Population and Social Research, (IPSR) Mahidol University. "Migrant Labor in Thai Agriculture: Evidence from the 2003 Agricultural Census". This paper uses the 2003 Agricultural Census of Thailand to document the importance, role and impact of migrant labor in Thai agriculture.

5. Maltoni, Bruno. Royal University of Cambodia. "Impact of Remittances on Local Communities in Cambodia: The Case of Prey Veng Province." This paper: (1) overviews the main trends and patterns of migration in Cambodia; (2) documents the findings of original qualitative work undertaken to understand the characteristics of villages sending migrants to Thailand; and (3) analyzes the social and economic impacts of this migration on the communities of origin.

* In addition, this phase supported the active engagement of the World Bank team in the diverse regional migration fora (such as the Regional Policy Meeting on Trans-Border Migration in the GMS, the 3rd Senior Officials Meeting of the UN COMMIT Group, and the 7th Meeting of the GMS Working Group on Human Resource Development), as well as the World Bank's active participation in the UN Migration Thematic Working Group.

This report aims to synthesize the main findings and discussions that have emerged from this set of workshops, background papers and regional fora.

1.4 Organization of the Report

The report is organized as follows. Chapter 2 takes a more aggregate view of migration, presenting the main patterns and characteristics of migration in the GMS, including the main channels of migration, geographic distribution, sectors of employment and average characteristics of migrants. To the extent the data and evidence allow, the chapter also discusses the economic role played by migrants in both receiving (Thailand) and sending (Lao PDR, Cambodia and Myanmar) countries. Chapter 3 then looks at migration from the perspective of the individuals and families involved. It discusses the choice to migrate, the process of migration including the risks faced by migrants, working conditions and remuneration of migrants in Thailand, and their living conditions. It also takes a more microeconomic look at the impact of remittances on the families and communities back home. Chapter 4 examines the evolution of migration policies in the GMS, with a heavy focus on how Thailand's policies towards migrants from its GMS neighbors have changed over time and on the factors that have influenced and constrained those changes. The chapter assesses the strengths and limitations of current policies and identifies the areas where there is substantial room for improvement. Finally, Chapter 5 turns towards the future by identifying what are the priority knowledge and data gaps that still need to be addressed, and then outlining a program for moving from research to supporting policy formulation in collaboration with other regional organizations and partners.

Table 1.1 Main determinants of migration in the GMS

                                              Sending countries

                                       Laos       Myanmar     Vietnam

Population Indicators
Mid-2004 population (thousands)         5,787       50,101     82,481
Annual population growth rate            2.2%        1.20%      1.30%
Total fertility rate (per woman)          4.6          2.8        1.9
Percentage aged, 0-14                     41%          32%        31%
Percentage aged, 15-64                    55%          63%        64%
Percentage aged, 65+                       4%           5%         5%
Projected increase in population        97.6%        36.8%      50.1%
  2004-2050

Human development indicators
Life expectancy at birth (years),          54           55         67
  Males
Life expectancy at birth (years),          56           60         72
  Females
Mortality under age 5 (per 1,000)         136          124         43
Ratio of girls to boys, secondary         62%          97%        87%
  school
Gross domestic product per capita        $326         $162       $411
  (US$)
Human Development Rank 2004               135          132        112

                                        Sending & receiving countries

                                     Cambodia      China      Thailand

Population Indicators
Mid-2004 population (thousands)        14,482    1,313,309     63,763
Annual population growth rate            2.4%         0.7%       0.8%
Total fertility rate (per woman)          4.6          1.8        1.7
Percentage aged, 0-14                     41%          23%        23%
Percentage aged, 15-64                    56%          70%        70%
Percentage aged, 65+                       3%           7%         7%
Projected increase in population       106.3%        11.3%      29.4%
  2004-2050

Human development indicators
Life expectancy at birth (years),          55           69         68
  Males
Life expectancy at birth (years),          60           74         75
  Females
Mortality under age 5 (per 1,000)         103           41         26
Ratio of girls to boys, secondary         58%          71%        93%
  school
Gross domestic product per capita        $278         $911     $1,874
  (US$)
Human Development Rank 2004               130           94         76

Source: World Bank, World Development Indicators database;
UNDP, Human Development Report 2004