Myanmar: Remittances support survival

DALA THAYA, 31 December 2010 (IRIN) - Remittances to Myanmar continue to be a lifeline for communities strapped for cash and short of food throughout the country, according to researchers and migration experts.

While officially recorded remittances to Myanmar accounted for only 0.4 percent of gross domestic product (GDP) in 2009, a 2008 university study calculated remittances were at least four times higher than the official figures.

Australia-based Macquarie University estimated average annual remittances to Myanmar from Thailand alone - US$300 million - amounted to five times the level of overall foreign direct investment in Myanmar.

"Some 96 percent of respondents [Burmese workers in Thailand] nominated [their family's] survival as their first order priority," said Claudia Natali, labour migration programme manager for the International Organization for Migration in Thailand, referring to the university survey.

According to the World Bank, $150 million in remittances was sent to Myanmar in 2008 through formal channels - the most recorded in over a decade.

But most migrants use an informal system called 'hondi' to transfer remittances to Myanmar, bypassing official recordkeeping.

"Persons moving irregularly across the border are entrusted to deliver agreed amounts of money from migrants in Thailand to family members in the migrants' source community," said Natali.

Migration

The number of Burmese migrants who entered Thailand "regularly" - with legal permission - between July 2010 and November 2010 was 702, according to the Thai government. But most Burmese migrants working in Malaysia or Thailand enter without documentation.

A memorandum of understanding between Thailand and Myanmar, which foresees mechanisms for migrants to enter and stay legally in Thailand for employment, was only implemented in July 2010.

In the Thai border town of Mae Sot, many Burmese migrants work in garment factories, while in southern Thailand they work on palm oil plantations or as fishermen.

"Those seeking work in Malaysia are usually village residents or lower middle class young men recruited formally by overseas employment agencies in Myanmar," said Natali.

"It cost $1,300 to send my son to Malaysia," said U Kyaw, a retired army sergeant in Myanmar's capital, Yangon, whose pension, equivalent to 40 US cents a day, is barely enough to cover his expenses.

"I borrowed $600 from a rich relative, the agent gave us a loan of $400 and the family put the rest up," said the 63-year-old father of three.

His youngest son Mya, who left for Malaysia to work as a day labourer in March 2010, now sends back $150-$200 a month. By contrast Thein, the eldest son, earns some $80 a month driving a bus in Yangon.

Poverty line

Once known as the "rice bowl of Asia", Myanmar's per capita GDP in 2009 was just over $1 a day.

Maung, the youngest of three brothers, exchanges the highly volatile Burmese currency into US dollars on the black market, where 10,000 Burmese kyats equalled $10 in December, versus the official bank exchange rate of $1,560. Over the course of a year, each brother earns on average $5 a day. "Luckily, my sister works in Malaysia. Last year she sent back $2,000," said the 16-year-old.

After nearly 20 years of various trade and aid sanctions, the vast majority of people in Myanmar survive thanks to small-scale local businesses, according to US-based research group Asia Society.

The average citizen spends more than 70 percent of his or her income on food, according to a March 2010 Asia Society report.

The researchers calculated this was the highest proportion in Southeast Asia.

Theme (s): Economy, Food Security,

[This report does not necessarily reflect the views of the United Nations]