Circular migration is key to prosperity for Thailand, Myanmar

This mass migration has had a strong effect on the Mon economy – the mainstay agriculture is shrinking, manufacturing and food processing factories are dying out and the social fabric is collapsing as families are separated. 

Yet, every youth I spoke to had a dream to work in Thailand. Most migrant-dependent households benefit from increased income from remittances. Parents are proud of young sons and daughters who have taken the most dangerous journey of their lives – crossing war zones, avoiding traffickers, hiding from the notorious Immigration and border police, and dodging agents for the sex trade – to eventually land a job that pays three times what they could earn in Myanmar. Their hard-earned remittances mean Mon state glitters with golden pagodas – evidence that the region is now wealthier than any other ethnic state in Myanmar. But will that surface sheen save it from the vicious cycle of poverty-migration-return-poverty-fresh migration?

The crisis in Myanmar has been an opportunity for a Thailand struggling to escape its “middle-income trap”. For  decades, cheap labour from over the border has sustained Thai industries. Myanmar service workers have also met the ever-rising tide of demand in Thai beach resorts. 

Alas, these low-paid migrants also helped politicians push populist policies, such as the minimum wage – for Thais only.  

Thailand eventually provided some rights to migrant workers, and Myanmar reciprocated in 2011 by properly documenting them. International organisations hailed this partnership for safe migration.  But will the constant supply of cheap labour save Thailand from the saga of living with second-class citizens who do not integrate with the rest of society?

The ongoing visit of Myanmar’s State Counsellor Aung San Suu Kyi offers an opportunity for both countries to step beyond the short-termism of the existing bilateral agreement on migration. Authorities on both sides can take lessons from the global migration crisis and develop a long-term compact that prevents the challenge turning into crisis. Thai leaders must offer practical solutions to a Myanmar leader who is strongly committed to the cause of millions of migrants and refugees who aspire to return home. However, bringing them home is neither feasible nor practical amid Myanmar’s current level of development, unless Thailand pitches in.   

A potential solution for a long-term agreement lies in the concept of “circular migration”. 

Under a bilateral push, Thailand could bolster its current policy of relaxed entry for Myanmar migrants. Labour-recruitment agencies must be regulated to prevent rampant abuse and exploitation, but they should also be incentivised to train and upgrade the skills of newly arrived workers. Such training opportunities should also be extended to the thousands of refugees. Myanmar should step up verification procedures and set up special services offering returning migrants job placements and small business loans. Circular migration, widely touted as a solution to Europe’s migration crisis, is possible here because Thailand’s economy is decades ahead of Myanmar’s. Both labour markets, adjacent to each other, should be able to absorb new arrivals as well as returnees and reap benefits for industries at different stages of growth. To do so, though, both countries must first forge an enabling environment by:   

l Cooperating to develop parallel circular capital flows that enhance circular migration. Remittance does reduce poverty in Myanmar but it does not help its macroeconomics since much of the money disappears into the black market. As a result, Myanmar loses a huge amount of potential income, while “mafia”-controlled money flows threaten to destabilise the country’s nascent exchange-rate equilibrium. 

Other initiatives such as financial literacy, microfinance for migration and mobile money, that fall under the Asean financial inclusion agenda adopted in 2014, can be accelerated to benefit the workers before and after they migrate.  

l The focus of cross-border discussions should be enhanced trade, not humanitarian aid. Neither country should spurn another chance to discuss trade cooperation. Myanmar is now included once again in the European Union’s Generalised System of Preferences (GSP) for trade, with US markets set to follow suit. Thailand can take care of higher value-adding components to help Myanmar’s nascent garment, footwear, processed food and green goods sectors gain entry to these high-end markets. The margins of trade privileges should help both countries to share the benefits amicably. 

Thailand has used Myanmar migrant workers to build its own industries in these sectors in places like Samut Sakhon, an important stopover destination for Suu Kyi. The time is now ripe for these industries to relocate to Myanmar, taking migrant workers with them and exploiting the trade privileges next door. In this regard, restoration of GSP by the US is not just about trade but about humanitarian development too. 

l Leaders in both countries should focus on the “human” face of the Dawei Special Economic Zone before they consider roads, trains and ports. This SEZ and several other border economic zones should prioritise the return migrants for their own benefits. While commercial strategies are spearheading Thailand’s role in building the Dawei SEZ, Myanmar must use it to maximise its developmental potential. If the two countries can integrate commercial and development objectives, the result will be a win-win for both. A third winner could be the Japanese government, which is using the “Thailand+1” formula to expand its investment. With this configuration, Dawei SEZ can offer a bonus because its developmental goals should attract more responsible investors and international financiers.  

I have assured my Mon friends that better days now beckon. If the talks-of-the-decade between two neighbours achieve a landmark deal on migration, it may be just a matter of days before the good times arrive. 

 

ZAW OO is executive director of the Centre for Economic and Social Development in Myanmar. He was a presidential economic adviser in Myanmar from 2013-16.