Sunday, June 07, 2009

Reverse migration as jobs dry up

Just read this Wall Street Journal article "The Great U-Turn", which describes a new and unprecedented phenomenon of "reverse migration", where workers from poorer countries migrate home as they lose their jobs, and even deciding not to migrate in the first place.

Indonesia expects 60,000 workers to be sent home from wealthier Asian countries and as many as 200,000 foreigners may leave Singapore this year and next, Credit Suisse said recently. Japan has offered cash incentives for immigrants to go home while Australia intends to cut its intake of skilled migrants this year by 14%. Malaysia has frozen work permits for foreigners and has asked employers to lay off foreigners before they lay off locals.

The WSJ article notes: "Such migratory shifts could have profound consequences for developed nations, especially in places where domestic populations aren't growing fast enough to fill jobs or pay for social needs. High-skill immigrants are an important source of tax revenue in some cities, and their kids fill the classrooms of universities and private schools. In the developing world, remittances sent home by migrant workers are also slowing, meaning less income -- and potentially, less growth."

This is the global version of what is happening already in Cambodia as people in cities lose their jobs and return to their homes in the provinces. According to an April report by the UNDP, 1. 5 million rural people in Cambodia depend upon migrant remittances (mostly from women) as their major source of income.

The report says the number of jobs lost in the garment industry is 60,000 and in construction, 25,000. Just yesterday I read 40,000 textile workers have lost their jobs, according to Mr. Chuon Mom Thol, president of the Federation of Cambodian Unions. Another 25,403 have been suspended until the textile businesses pick up again.

Meanwhile hotels in Siem Reap employ 15,000 people who each support an average of six family members, so 90,000 people, according to the Minutes of the Tourism Working Group held in February this year. " If the decline in tourism continues, the hotel industry predicts a 50% job loss, so a massive 8,000 people would be out of a job in Siem Reap which will seriously impact them and their and their family members. Nationwide, the hotel industry directly employs 30,000 people.- Moreover, not only will the hotel industry suffer but the whole tourism sector: restaurants, tuk tuk drivers, tour guides, etc"

To make matters worse, according to the ILO there are 275,000 young job seekers every year but less than 100,000 new jobs are created every year, leading to high unemployment among youth.

Social and economic implications are obvious: besides malnutrition and hunger leading to diseases and death, we can expect an increase in crime, a higher risk of human and sex trafficking, a higher risk of exploitation in general.

The Cambodian government does acknowledge the problem and has allocated US$6.5 million to vocational training for jobless garment workers, says Kang Chandararot, president of the Cambodia Institute for Development Study quoted here. He said the government had suspended its 1 percent advance profit tax until 2012, and reduced employer contribution to social security to 0.05 percent of gross salary, from 0.08 percent, for 2009 and 2010.

Apparently, the government has also tried to offer agricultural training. Cambodian People's Party parliamentarian Cheam Yeap said in the same article: "The government has proposed ... to offer loans with lower interest rates to people to increase their farming capacity and offer more opportunities for people to work in agriculture."

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