Abstract
Migration has been a key to economic success in many countries of South Asia, which is one of the leading exporters of migrants with three of its nations in the world’s top 10 in terms of remittances. Edited by Saman Kelegama, Migration, Remittances and Development in South Asia provides an insightful analysis into the status of migrant workers in South Asia.
The book is divided into two sections, with Section I elaborating on the status of migration and remittances in India, Pakistan, Sri Lanka, Bangladesh, Nepal, Bhutan, the Maldives, and Afghanistan through separate chapters devoted to each of these countries; and Section II discussing the effects of various national and international migration policies in the region, with the concluding chapter stressing on the necessity of establishing a South Asian Commission on Migration and Development that could serve as a vital link between migration and development in the region.
All the contributors to this volume agree that though migration and remittances have a huge impact on the economy of South Asian countries, only a few national governments have mainstreamed migration policies into their development strategies. As the issue of international migration has come into focus only recently, the book provides a valuable contribution to academics researching migration and development by focusing on the interplay of these issues in the less-studied countries, such as Bhutan, Afghanistan, and the Maldives.
The book also sheds new light on migration in India. Although India has been experiencing it for centuries, the massive movement of people from this country to other parts of the world is a fairly recent phenomenon. According to the Ministry of Overseas Indian Affairs (MOIA), Indians form the second-largest diaspora in the world (MOIA, 2008), with a population of around 25 million. Interestingly, 95 percent of its labor outflow is to the six Gulf countries of Saudi Arabia, the UAE, Bahrain, Kuwait, Oman, and Qatar (1988), followed closely by Singapore and Malaysia. According to a World Bank report (2008), India has the highest volume of remittances in the world, amounting to USD 26 billion and contributing to 3 percent of the GDP.
S. Irudaya, the author of Chapter 2 (“India”), presents a case study of Kerala conducted by the research unit on International Migration of the Centre for Development Studies (CDSMRU) in 2007, and financed by the Department of Non-Resident Keralite Affairs, Government of Kerala. The author claims that remittances to the state not only helped to raise the general standard of living but also proved to be the most valuable contributor to poverty alleviation in Kerala. Most of the migrants from Kerala are headed to the UAE and Saudi Arabia in the Middle East, and to the US and the UK in the West.
Migration of labor has also increased rapidly in Pakistan. The Pakistani diaspora is now 4 million strong of which the majority works in the Middle East. The remittances from these migrant workers constitute one of the main sources of income for a multitude of households, and also have a cascading effect on consumption in both urban and rural areas, thus influencing investment, trade, current account deficit (CAD), poverty, and welfare. Rizwana Siddiqui, the author of Chapter 3 (“Pakistan”), claims the remittances accounted for 10 percent of the GDP at their peak. The author uses a model to analyze the effects of remittances in 1990 and 2002. The result shows that the flow of remittances raises household income, while a fall in domestic labor supply raises wages. The remittances also reduced unemployment level, eased the current account deficit, raised the real exchange rate, and financed import. The author observes that while the flow of remittances in 2002 had a strong impact on microeconomic indicators, that of 1990 had a greater effect on poverty reduction.
Remittances, the author summarizes, reduce the country’s competitiveness, thus adversely impacting the export sector. The author demonstrates that a 5 percent increase in remittances affects the external sector, economy-wide wages, returns to capital, poverty, and welfare. However, despite their negative impact, remittances are not undesirable, and the government would do well to develop a comprehensive migration policy.
Elaborating on the varying forms and intensity of migration in the post-independence Sri Lanka, authors Nisha Arunatilake, Dushani Weerakoon, and Priyanka Jayawardena in Chapter 4 (“Sri Lanka”) establish how remittances provide an important source of external financing for Sri Lanka, surpassing USD 3 billion in 2008, and accounting for nearly 8 percent of the GDP, thus leaving a huge mark on the economy.
Women make up for a large proportion of migrant workers, with many of them working as “house-maids” in the Middle East. Around 70 percent of foreign laborers are low-skilled, while over a quarter of them come from the Western Province. The authors note that remittances, at micro-level, reduce poverty, and improve the ability of a migrant household to endure external shocks, provide credit for household enterprises, and increase investment in health and education. However, they also have a negative impact, at times leading to disintegration of families, violation of the rights of workers, and a disinterest on the part of the government to create jobs in the domestic market. The book notes that these issues must be addressed to maximize the development benefits of migration, while protecting migrant workers and their families.
Focusing on Bangladesh, Salim Raihan and Syed Al Helal Uddin in Chapter 5 (“Bangladesh”) underline the important role played by remittances in the Bangladesh economy in terms of contribution to the GDP and foreign exchange earnings. Bangladesh is now among the top 10 remittance-recipient countries, receiving a large portion of its earnings from the Middle East. At microeconomic level, these remittances also alleviate poverty of households in both urban and rural areas, and raise the general standard of living. According to the Bureau of Manpower, Employment and Training (BMET), from 1976 to 2008, a total of 6.26 million people migrated from Bangladesh under the labor migration category. But 70 percent of them constituted semi-skilled and less-skilled workers employed in shops, construction work, farming activities, driving, cleaning, and hospitality industry, and only 29 percent were skilled in engineering trades, such as welding, metal works, refrigeration, electrical works, and plumbing. The popular destinations for these migrants are Saudi Arabia, the UAE, Kuwait, Oman, Malaysia, Singapore, South Korea, Libya, Bahrain, Italy, and East European countries.
In the wake of the recent global economic crisis, remittance levels fell during the first two or three months in 2009. Assessing the impact of such a fall on remittances, the authors found that a reduction of around 20 percent in remittances would have an adverse impact on GDP, thereby slowing down the growth of agriculture and service sectors, depreciating the currency, and reducing the nominal income of the poor households. However, on the positive side, it is expected to reduce imports and the overall price level in the country. The authors also used another model to evaluate the effect of the fall in remittances on poverty, and discovered that it would increase headcount poverty, poverty gap, and squared poverty, with a greater impact on nonfarm rural households and urban less-educated households. Thus, the overall impact would be negative.
They suggested that the government should take advantage of Bangladesh’s well-established microfinance network to initiate new programs to maximize the benefits and reduce the risks of remittances to improve the welfare of migrant families.
Turning the focus on Nepal, Jagannath Adhikari in Chapter 6 (“Nepal”) recounts how tourism and remittances have been the powerhouse of the country’s economy. Adhikari highlights the possibilities of improving the “remittance-based economy of Nepal” through trainings, skill-development strategies, youth involvement, improved recruitment, and human rights protection systems. The author states how the flow of remittances has taken care of the imbalances in the country’s economy caused by trade deficit, and the growing trend of seeking education in foreign countries. While highlighting how remittances contribute three times more than the development aid, the author also underlines the negative side associated with migration. Analyzing the situation from a gender perspective, he shows how there has been a shift in the trend of male-only migration to growing migration of women, a change widely attributed to the Foreign Employment Act 2064 (2007).
Sonam Tobgay’s chapter (“Bhutan”) on migration in Bhutan is a study in contrast. Remittances do not fuel the country’s economy. In Chapter 7, Tobgay observes that only well-to-do people migrate because of the high cost of migration. Unlike Nepal, Bhutanese overseas migrants remit money back home as “a sign of gratitude” to their families. He also draws attention to the problems created by the heavy urban migration to Thimphu, and the outmigration of youths to other countries, mainly the US. Tobgay also lightly dwells on the lack of cheaper and more orderly remittance services.
Both out-migration and in-migration have a significant impact on the development process of Maldives with remittances remaining stable for the past six years. There is inequity in the labor market that prefers foreign contract workers due to wage disparities. It is to address this discrimination that the new labor policy has been introduced, and is working quite well. The authors of Chapter 8 (“The Maldives”), Deshal De Mel and Suwendrani Jayaratne, highlight the role of expatriate workforce, including cheap labor from countries like India, Bangladesh, and Sri Lanka in various sectors, with tourism being the main followed by transportation, manufacturing industry, fisheries, construction, which make up for 64 percent of the GDP. The authors also dwell on the detrimental impact of the global economic crisis of 2008 and 2009 on the Maldivian economy, resulting in an increase in imports than exports. In terms of remittances, unlike other South Asian countries, the Maldives is witnessing an increase in outward remittances coupled with limited inward remittances, which is causing a serious negative balance in the existing account deficit.
Particularly compelling is the chapter on migration and remittances in Afghanistan since not much research has been done on this subject, and its situation is quite different from other South Asian countries. Authors Tilani Jayawadhana and Roshini Jayaweera recount how the raging civil war is leading to an increasing international out-migration of people as refugees and asylum seekers. One of the poorest countries in the world, Afghanistan suffers from a host of problems, such as internal insurgency, poverty, malnutrition, illiteracy, and high mortality rate. Opiate trade is the main source of revenue for the country. Hence, people migrate either in search of jobs or to escape from political instability. Though migrants do remit their earnings back home, there is no information about its flow or volume as there are no national or international records. However, it has been observed that remittances do play an important role in improving the quality of life in many households of the country. Unlike other South Asian countries, the Afghanistan government does not promote migration as a source of income, and has instead been trying to woo back the migrants, though without much success due to insufficient financial aid and opportunities in the country.
After delineating the characteristics of migration and remittances in individual South Asian countries, the book devotes its second section to analyzing migration policies in the context of the region in its entirety. Piyasiri Wickramasekara in Chapter 10 (“South Asia: Issues on Migration and Development”) recounts how various international instruments, such as Multilateral Framework on Labor Migration (MFLM), have proven useful for South Asian countries as have some good practices such as Sri Lanka’s National Migration Policy, and ASEAN declaration on the protection and promotion of the rights of migrant workers. The book reviews national and international policies on migration in South Asia and underlines the need for transparency. Since migration is a dynamic process, migration policies also need to be designed in a way so as to involve “broad-based social dialogue”’ and common approaches.
The book concludes by making a convincing argument for setting up a South Asian Commission on Migration and Development. Farooq Sobhan demonstrates how establishment of such a commission would help in providing a better understanding of the linkage between migration and development in South Asia. The overall objective of such a commission would be to formulate a strategy and framework for providing a coherent and comprehensive response to the issue of migration, keeping in mind the interests of individual countries. The commission, the book suggests, should have the following five objectives: to place the issues relating to migration from South Asia at the forefront of the national agenda of all member countries; to advocate policies aimed at easing the hardship of migrants from member countries at the international level; to define existing gaps in migration policies adopted by the countries and establish a clear linkage among migrants from the region; to formulate policies to harness benefits and minimize the negative effects of migration; and to study the work being done by international organizations, such as WTO, ILO, IOM, UNDP, and the UN, with a view to developing a plan of action for migration.
The book suggests that the commission should be constituted of 12 commissioners drawn from all the countries of South Asia, and with a wide experience of migration. The commission should adopt an agenda, a work plan, and an outreach program focusing on holding consultations with the governments in the region, international bodies, academia, migrants’ organizations, recruitment agencies, and other stakeholders. The brief of the commission, the book suggests, should be to put forward a number of options that could be pursued as part of a strategy with well-defined, actionable steps for the consideration of the governments of South Asia and other stakeholders.
Though quite holistic in its approach, the book focuses only on international migration, especially on migration to the Middle Eastern countries, and completely omits any mention of internal or domestic migration.
The book is a keeper for researchers, policy-makers, and all others involved in the realm of migration since it not only delves into the impact of migration on development through strong statistical evidence, but also shows the way forward to address the challenges and opportunities in this pool of dynamism.