World Bank: Easing of migration rules to cut poverty in Asean

from October 11, 2017 01:00 am to October 11, 2017 01:00 am

Southeast Asian countries like the Philippines will have a better chance of reducing poverty if governments will lift the restrictions to migration, the World Bank said on Monday.

In its report, titled “Migrating to Opportunity”, the World Bank said lowering barriers to mobility would allow Asean workers to take advantage of higher wages, new employment opportunities and more options to move to new employment opportunities.

“With the right policy choices, sending countries can reap the economic benefits of out-migration while protecting their citizens who choose to migrate for work,” said Sudhir Shetty, World Bank chief economist for the East Asia and Pacific region.

“In receiving countries, foreign workers can fill labor shortages and promote sustained economic growth, if migration policies are aligned with their economic needs. Inappropriate policies and ineffective institutions mean that the region is missing opportunities to gain fully from migration,” Shetty added.

The World Bank cited international studies that found that a 10-percent increase in remittances is associated with a 3.5-percent reduction in the proportion of poor households.

In the Philippines, the World Bank noted that studies have found that households that were able to send a member abroad have a two-fold or three-fold greater odds of escaping poverty. This trend was also observed in Indonesia and Vietnam.

The World Bank also said the Philippines has a “highly developed” support system for migrant labor, which other Asean countries can emulate.

However, the World Bank said better local policies are still needed to improve the reintegration of returning migrants.

“The [Philippines] should continue to evaluate and improve its migration-management system, including oversight of recruitment agencies, programs for returned migrants and data sharing and interoperability,” the report read.

Local economists like Ateneo de Manila University School of Social Sciences Dean Fernando T. Aldaba agreed with the World Bank and said the government must ensure that returning overseas Filipino workers (OFWs) will have access to economic opportunities.

Aldaba said this entails creating a temporary labor-migration policy. To date, he said the Philippines “seems to deny that [the Philippines is] actually exporting labor”.

The Ateneo economist also said there is a need to “negotiate opportunities” that will allow the portability of social security of OFWs in host countries.

“[The government must also create policies that] capture more precisely through the financial system the savings of OFWs and channel these to the development of our industrial and manufacturing sectors,” Aldaba told the BusinessMirror.

Aldaba and Institute for Migration and Development and Issues Executive irector Jeremiah M. Opiniano said there is a need to craft a migration for development plan to maximize the benefits of migration and make return migration an economically viable alternative for Filipinos abroad. They made this recommendation in a 2008 paper, titled “The Philippine Diasporic Dividend: Maximizing the Development Potentials of International Migration”.

Aldaba and Opiniano said OFWs can invest in a number of areas, such as agriculture, education and health, infrastructure-development projects, social-development projects, financial markets, information and communications technology and tourism.

“While we have enumerated eight possible directions for overseas Filipinos’ resources, there is much more work to be done—especially in crafting a migration for development plan for the Philippines, one that values the overseas Filipino and that directs their resources and energies to equitable, rights-based, and, hopefully, far-reaching development,” Opiniano said.

The World Bank said overall, migration procedures across Asean remain “restrictive”.  These “restrictive policies” are partly influenced by the perception that an influx of migrants would have negative impacts on receiving economies.

These barriers include costly and lengthy recruitment processes, restrictive quotas on the number of foreign workers allowed in a country and rigid employment policies. The World Bank said these constrain workers’ employment options and impact their welfare.

The World Bank said intraregional migration in Asean increased significantly between 1995 and 2015, turning Malaysia, Singapore and Thailand into regional migration hubs with 6.5 million migrants, or 96 percent of the total number of migrant workers in the Asean.

Approximately $62 billion in remittances were sent to Asean countries in 2015. Remittances account for 10 percent of GDP in the Philippines, 7 percent in Vietnam, 5 percent in Myanmar and 3 percent in Cambodia.