Costs and Benefits of Cross-Country Labour Migration in the GMS

3. Economic Costs and Benefits of Labour Migration: Case of Lao PDR

3 ECONOMIC COSTS AND BENEFITS OF LABOUR MIGRATION Case of Lao PDR Department of Statistics, National Economic Research Institute 1. INTRODUCTION One of the most significant effects of regional economic integration is migration for the purpose of employment.1 The number of international labour migrants has increased rapidly over the past decade. According to theAsian Migrant Centre (AMC), there were at least two million migrants in the GMS in 2004. Many previous studies observed that migrants generally move from countries with relatively low income levels such as Cambodia, Lao PDR, Myanmar, and Vietnam, to those of higher economic standing, such as Thailand. Economic reasons are identified as the main determinant of such movements. The city of Bangkok in Thailand is regarded as the hub of labour migration in the GMS. However, there is currently no accurate figure for the number of migrant workers in the city. As a result of the migrant registration scheme conducted by the Thai Government in 2004, there were approximately 1.3 million registered migrant workers in 03 Costs_Benefits.indd 190 6/21/12 10:58:44 AM Economic Costs and Benefits of Labour Migration: Lao PDR 191 Thailand by said year. The biggest share (72 per cent) came from Myanmar, followed by migrant workers from Lao PDR and Cambodia (14 per cent from each).2 Like their geographic neighbours, Thai people also move to higher income countries. However, Thai labour migration is typically to countries outside the GMS such as South Korea, Taiwan, Hong Kong, and Singapore, among others. Labour migration is a significant phenomenon that is transpiring as a result of regional economic integration processes in the GMS. This phenomenon attracts considerable attention and interest from many stakeholders and associated parties. At present, there are a number of research works and publications that focus on this issue. However many questions still remain unanswered, especially regarding the economic costs and benefits of labour migration and its effect on the local economy. For example, the financial cost of labour migration for the individual is yet to be fully understood, and so is the effect of their earnings on the local economy. This chapter seeks to help fill this research gap. It also explores other migration related trends and issues pertaining to the case of Lao PDR, with the aim of advancing policy recommendations. To accomplish this, it used various methodologies, namely desk research, key informant interviews (KIIs),3 focus group discussions (FGDs) and consultations with partner research institutes and surveys. 2. BACKGROUND 2.1 History and Trends Labour migration between Lao PDR and Thailand is not a new phenomenon, especially not for people who live along the Lao-Thai border. Crossing the border to visit friends or relatives, trade, or seek employment, or engage in other income generating activities are long-established traditions and make up part of the relationship between the border communities located on both sides of the Mekong River. Despite this historical context, an exceptionally large amount of labour migration to Thailand only began in the 1990s. This was a result of Thailand’s economic development and Lao PDR’s adoption of a comprehensive reform programme called the New Economic Mechanism (NEM) in 1986, which led to regional integration and an “open door policy”. Until recently, there have been no reliable statistics on the number 03 Costs_Benefits.indd 191 6/21/12 10:58:45 AM 192 Department of Statistics, National Economic Research Institute of Lao migrant workers in Thailand. Estimated figures vary from 150,000 to 300,000 people. There are two different types of Lao migrant workers in Thailand: regular and irregular. The regular type refers to those migrant workers who go through formal channels in accordance with the MOU between the Thai and Lao governments, that is, through a recruitment agency. This group still typifies the minority of Lao migrant workers in Thailand. According to the Ministry of Labour and Social Welfare of Lao PDR, only 5,400 Lao migrant workers were sent under the MOU, corresponding to around 2.7 per cent of the total number of Lao migrant workers in Thailand in 2007. Conversely, irregular migrant workers are those who gain employment and work in Thailand through informal channels. This group typifies the majority of Lao migrant workers in Thailand. Since 1992, the Government of Thailand has used the registration programme as a tool to enable illegal migrants to work legally in Thailand. The 2004 registration...