Covid-19 hit Cambodian migrants hard, remittances fell by 16.6%

Remittances from Cambodian migrant workers showed a whopping decline of 16.6 percent to $1,272 million in 2020 following the outbreak of Covid-19, a stark contrast to the 6.7 percent annual growth during 2014-2019, revealed the first ‘Asean Migration Outlook’ report.

According to the report, released recently by the Asean secretariat, an estimated 260,000 Cambodian migrant workers lost jobs in the wake of the pandemic and returned to the country from various parts of the world, mostly from Thailand, as of December 2021. The return migration to Cambodia was the second highest in the region after the Philippines.

The report said the return of the migrants led to a rise in poverty in the Asean region and it coincided with a fall of 3.6 percent in remittances. More than 2.4 million people returned to six Asean countries of migrant origins – Cambodia, Laos, the Philippines, Myanmar, Indonesia and Vietnam – in the months following the first outbreaks.

The Philippines reported that 1.169 million migrant workers have been repatriated from all over the world since the pandemic began until September 2021. Although some of these migrant workers may have returned after completing their contracts, it is likely that the majority returned prematurely due to Covid-19.

A survey of returned Philippine migrants found that 67 percent returned due to the Covid-19 crisis, 23 percent said they were planning to return to the Philippines regardless of the pandemic, while10 percent did not want to answer.

In 2019, over one million Cambodians were outside the country; among them, approximately 719,000 Cambodians worked in Thailand. About 40 percent of them were employed in construction, 17 percent in manufacturing, and 16 percent on farms.

Global migrant remittance inflows too declined by 2.4 percent in 2020 due to the economic crisis induced by the Covid-19 pandemic, after growing an average of 3.4 percent the previous five years. The fall in remittances is largely because of job losses and a decrease in wages.

In Asean, migrant remittance inflows fell an even sharper 3.6 percent, after growing an average of 5.2 percent the previous five years. Migrant remittance inflows fell in 2020 for seven of the eight Asean countries with available data (there was no data for Brunei Darussalam and Singapore), with Vietnam being the only country that managed positive growth, although much lower than usual.

According to analysts, underdeveloped digital banking, travel bans, and insufficient alternatives for the underbanked contributed to the falls in remittances in Cambodia, Indonesia, and Myanmar. The Philippines and Thailand benefitted from digital solutions and a more favourable policy environment, so remittance inflows declined less in these countries.

The substantial fall in remittances is especially concerning in Cambodia, Lao PDR, and Myanmar, where remittances play a bigger role in lower-income households, and where the loss of migrant worker jobs abroad can lead to poverty back home.

A telephone survey of 1,054 migrant returnee households in Cambodia revealed that two-thirds of returning migrant worker households suffered a severe drop in income. Their average income was only $150 a month, and more than half were in debt. As much as one-third of these returnees reported no income at all; although over 65 percent received some kind of support: 20 percent received cash support, nine percent received food assistance, and 10 percent received healthcare services.

Although the past two years have witnessed large job losses, massive migrant worker returns, and a sharp drop in deployment, labour migration in the region is expected to recover and possibly surpass pre-pandemic levels, said the report.

The reasons are manifold: the expected strength of economic recovery in the region; the continuing wide disparity in socio-economic wellbeing between origin and destination countries in the region; demographic pressures; and sectoral or role-based gaps in the labour markets.

After the economic meltdown in 2020 and tepid growth in 2021, Asean, as a whole, and most individual countries are projected to return to or close to their pre-pandemic growth levels beginning in 2022 and achieve their pre-pandemic levels of output by 2022 or 2023.

Asean is expected to grow a little under five percent in 2022 and just over five percent in 2023, based on the Asian Development Bank (ADB) forecasts in April 2022. The projected economic recovery is particularly noteworthy for Malaysia and Thailand, which attract the largest number of intra-Asean migrant workers.

Malaysia’s economy is projected to grow by 5.7 to 5.8 percent in 2022 and by 4.5 to 5.7 percent in 2023, according to 2022 World Bank and IMF forecasts. Thailand is forecasted to grow by 3.9 to 4.1 percent in 2022 and by 4.3 to 4.7 percent in 2023.

The report showed that compared to some other Asean countries, Cambodian migrants, on return received free Covid-19 tests and access to quarantine facilities at health centres with free food.

In Cambodia, the Ministry of Labour and Vocational Training, through technical and vocational education and training (TVET) institutions, offered short-term and long-term technical and vocational training to returning migrant workers and provided information on domestic job opportunities through the National Employment Agency, Provincial Department of Labour and Vocational Training, and provincial job centres.
According to the report, the opportunities for re-migration will, however, depend, firstly, on how quickly destination countries within and outside the region are able to recover and open their doors to foreign workers, and, secondly, on the revival of the recruitment industry, which suffered massively over the past two years. Fortunately, forecasts of early recovery have been optimistic.

In his foreword to the report, Dato Lim Jock Hoi, Secretary-General of Asean, said that the safe and orderly migration of workers within and beyond the region is key to realising the Asean Community that is politically cohesive, economically integrated, and socially responsible.

“Although the Covid-19 pandemic resulted in job losses as well as the return of migrant workers to their home countries, Asean is once again witnessing their redeployment as our recovery efforts gain momentum,” he said.