Migrant Workers Pay High Price to Work Abroad

Monday, October 12, 2009

Published by The Jakarta Post Monday, (October 12th, 2009)

Indonesian migrant workers have to pay agencies a year's salary to find employment in Taiwan, and about six months' salary to move to Malaysia or Singapore, states the 2009 Human Development Report launched on Monday.

Asian migrants moving to the Gulf often pay 25 to 30 percent of what they expect to earn over two to three years in recruitment and other type of fees, the report's lead author, Jeni Klugman, said.

She added that under the agreements struck between the governments of Thailand, Cambodia and Laos, recruitment fees were equivalent to four or five months' salary, processing time averaged about four months, and 15 per cent of wages were withheld pending the migrant's return home.

"In contrast, smugglers reportedly charge the equivalent of one month's salary. Given these differences, it is not surprising that only 26 percent of migrant workers in Thailand were registered in 2006."

The report, commissioned by the United Nations Development Programme (UNDP), showed that both internal and international migration involved extensive official documentation, which could inhibit mobility or lead to illegal migration.

While there are large numbers of licensed recruitment agencies, 1,500 in the Philippines and close to 2,000 in India, many ignore the legal caps set on fees charged for their services.

"The difference between wages at home and expected wages abroad is perhaps the most important determinant of the price of recruitment agency services," the report said.

"People with less skills and who are poorer are more likely to move. But with the current economic downturn, there has been a decrease in demand for migrant workers," the report says, adding that unequal opportunities were a major driver of economic migration.

Indonesia has an emigration rate of 0.9 percent. The major continent of destination for migrants from Indonesia is Asia with 77.5 percent emigrants living there.

The US is host to nearly 40 million international migrants - more than any other country. However, as a share of total population, Qatar has the most migrants - with more than 4 in every 5 person being a migrant. Indonesia has 135,600 representing 0.1 percent of the total population.

Remittances are unequally distributed. Of the total US$370 billion remitted in 2007, more than half went to countries in the medium-human-development category, against less than 1 percent to low-development countries. In 2007, Indonesia received $6,174 million in remittances, with an average remittance of $27 per person, compared to $108 for the OECD.