Catalog

Migration trends and directions

Asians have for centuries traveled long distances for work and to set up new lives in foreign lands. The modern story of migration, though, began in the early 1970s when the oil price boom created an enormous demand for infrastructure workers in the Middle East. Hundreds of thousands of workers from India and Pakistan went to the Gulf to fill construction jobs. They were later joined by workers from the Philippines and then Bangladesh, Indonesia, and Sri Lanka. As the oil boom and the concomitant inflow of petrodollars substantially raised household incomes in the Gulf countries, demand for domestic service workers increased and those jobs were filled by Asian migrant labor.

The bursting of the oil bubble, the Gulf wars, and the completion of a large number of construction projects diminished the demand for workers in the Middle East from the mid-1980s. Yet it was at this time that labor migration within Asia began to expand, triggered by the rapid growth of East and Southeast Asian economies (Wickramasekera 2002). Japan, the newly industrialized economies (NIEs) of Hong Kong, China; Republic of Korea (hereafter Korea); Singapore; and Taipei,China, and some emerging regional economies such as Malaysia and Thailand became important destinations for Asian migrant labor, especially from Southeast Asia. In the last two decades, migration of domestic service, health, and information and communications technology (ICT) workers from Asia to North America has also significantly increased, boosted by demographic changes in industrial countries and the booming "new economy" of the late 1990s.

Table 2.3.1 presents a taxonomy of Asian economies according to their international migration situation. With regard to migrant labor, regional economies can be classified either as sources, destinations, or both. Large nations in East, Southeast, and South Asia, in which the transition to low fertility did not commence until the 1970s or later, remain labor-surplus areas. The Philippines sends the largest number of workers abroad, both to other Asian economies and elsewhere. Its migrant workers cover a broad range of skills levels and are spread widely throughout the world. For example, Filipino domestic service workers tend to flow to Hong Kong, China and the Middle East; ICT workers and nurses to Canada, United Kingdom (UK), and United States (US). Most South Asian countries are labor exporters, with the Middle East, and more recently, Southeast Asia, as major destinations.

Fifty years ago, Japan and the NIEs were labor-exporting countries. But rapid declines in fertility accelerated their demographic transition and helped their rapid economic catch-up. Labor shortages in these countries have seen them hosting large numbers of migrant workers.

Malaysia and Thailand are currently midway through their demographic transition and lag further behind the NIEs in their economic catch-up process. Both countries are sending significant numbers of workers to more developed regional neighbors such as Singapore and Taipei,China and at the same time are receiving significant numbers of immigrants from nearby labor-surplus nations. In Central Asia, Kazakhstan—the subregion's richest country—is a major destination for workers from neighbors, but it sends a significant amount of its workers abroad as well.

According to the United Nations and the bilateral migration data estimates of the University of Sussex and the World Bank, Asia was host to 26.3 million migrants, or about 13.8% of the world's total migrant stock, in 2005. Asia was much more important as a source of international migration, sending 54.2 million migrants abroad or 28.4% of the world's total. The International Labour Office estimates that half of Asia's migrants were workers (ILO 2004). Although the regional aggregate numbers suggest migrants represent only a small share of the regional population, these figures might be biased by the dominance of the People's Republic of China (PRC) and India. As shown in Table 2.3.2, if the two population giants are excluded, the rates of immigration to and emigration from developing Asia more than double. In fact, for some regional economies, migrants represent a significant proportion of their populations. Table 2.3.2 shows that although immigrants account for negligible shares of the total population in large economies such as PRC, India, and Indonesia, they make up more than 40% of the populations of the two economies of Hong Kong, China and Singapore. For many small countries in the Pacific and Central Asia, emigration rates are substantial. Samoa, for instance, has over 35% of its population abroad, while for Armenia, the equivalent figure is 21.2%.

It should be noted that these official migrant stock numbers are likely to be underestimates because they are typically based on census data which excludes much temporary and undocumented migration. Most labor migrants in Asia are temporary and often return home at the end of their fixed-term contracts. They are not detected in most standard migration data collection systems, which are designed to gather information on permanent migration. Undocumented migration is also common in Asia. Battistella (2003) estimates that there are at least 2.4 million unauthorized migrants from developing Asia in Japan; Korea; Malaysia; Singapore; Taipei,China; and Thailand. For Kazakhstan, it is believed that the number of irregular migrants is about 50 times higher than licensed migrants (Sadovskaya 2005). Official stock estimates of the Commission on Filipinos Overseas show that there were 8.23 million Filipinos abroad at the end of 2006, equivalent to 9.5% of the resident population and 4.6 million higher than the estimate made by the University of Sussex and the World Bank. Of the total, 3.56 million are permanent emigrants, 3.80 million are overseas contract workers, and 0.88 million are irregular migrants. Given the significant proportion of temporary and undocumented migrants, the impact of international labor migration on Asian countries is clearly much larger than that suggested by official migrant stock numbers reported by the United Nations.

Some developing Asian economies have become increasingly reliant on migrant workers to fill domestic jobs. In Singapore, for instance, the share of nonresidents in the economically active population has risen from 18% in 1991 to 27.5% in 2006. In Malaysia; Hong Kong, China; and Thailand, the proportion of foreign workers in the mid-1990s exceeded 6% of their labor forces (Athukorala 2006). Migrant workers relieve labor and skill shortages in these economies, enabling them to fully exploit potential growth opportunities. The Singapore Government estimates that foreign labor contributed 3.2 percentage points to the annual GDP growth rate of 7.8% over the decade of the 1990s (MTI 2001). The supply of migrant workers is especially important for labor-receiving countries to sustain competitiveness particularly in labor-intensive sectors, including small and medium enterprises.

For labor-sending countries, the most direct benefit from migration is the rise in incomes accruing to migrants and the consequent inflow of remittances back home. Over the past decade, remittances have become an integral part of developing Asian economies, surpassing the amount of official aid received by a large margin (Figure 2.3.1). In 2007, total remittance inflows to developing Asia are estimated to have reached $108.1 billion, accounting for over one third of total global remittance inflows. Remittance inflows to the top three recipients of the region— PRC, India, and the Philippines—comprise close to two thirds of the region's total receipts.

For some regional countries, remittances sent home by migrant workers represent a considerable share of GDP and create an important source of financing for their balance of payments. In Tajikistan, for instance, the inflows of remittances in 2006 were 36.2% of GDP (Figure 2.3.2) and 61.9% of exports. While there are also a large number of migrant workers abroad from the PRC, India, and Indonesia, their share of remittance inflows to GDP remains below 3% due to the sheer size of their economies. It should be noted, however, that these remittance figures represent only official inflows. Total remittances are believed to be much larger as there are likely to be substantial unrecorded remittance flows.

In some countries with high rates of population increase and low rates of economic growth, international migration has served as a crucial safety valve for reducing employment pressures and providing valuable financial resources. This is most evident in the Pacific island states and some Central Asian countries, where emigrants account for more than 10% of their population and remittances exceed 10% of GDP. But in recent years, the importance of international migration has substantially increased even in some large economies. For instance, the deployment of newly hired workers from the Philippines increased from 253,030 in 2000 to 308,122 in 2006. Correspondingly, remittance inflows more than doubled from $6.2 billion to $15.3 billion during the period. Although there is little evidence so far that the safety valve of international migration has enabled labor-sending countries to increase the effectiveness of national development efforts or to restructure their economies through the use of remittances (or both), migration does raise income levels for many poor, as well as benefits the wider community through the multiplier effects of increased spending and the associated stimulus to labor markets. Most empirical studies confirm that international migration and remittances contribute importantly to poverty reduction in Asian countries (Box 2.3.1).