The more the economy is stagnant, the less its ability to create jobs, the more dependent government becomes on overseas labor deployment.
By the Policy Study, Publication and Advocacy (PSPA) Program
Center for People Empowerment in Governance (CenPEG)
November 3, 2008
If the state policy making and legislative agenda do not change course, the whole nation will wake up one day to find that remittances accumulated through off-shore migration or labor exportation have become government's No. 1 pillar of economic sustainability. Right now, foreign trade and investment – steered by neo-liberal globalization – and reliance on overseas development assistance are the first two pillars, followed by the export of Filipino labor. The state policy of globalization as specified by privatization, liberalization, deregulation, and labor-only contracting binds the three major pillars together.
Labor migration has become the safety valve to the country's unemployment crisis and a major source of foreign exchange: It has surged way past the domestic job market as the remaining option for many Filipinos. In 2000 alone, more than 800,000 Filipinos were deployed abroad while only less than 200,000 were effectively added to the domestic labor market.(1) As unemployment has worsened under the Arroyo administration compared to the past 50 years some 3,000 Filipinos leave the country every day for overseas jobs – or a total of more than 1 million every year. With remittances growing by the year - $14.4 billion in 2007 constituting 10 percent of the country's GDP - the government target is to increase labor migration to 2 million by 2010.(2) And the government is determined to meet the target: From January to April this year there were 516,466 migrant workers deployed thus raising the daily departure to 4,314 from last year's 3,000.
In fact remittances sent by overseas Filipinos have outstripped both foreign direct investment (FDI) and overseas development assistance (ODA) which have declined in the past several years. FDI was $2.93 billion in 2007 but minus payments to loans the actual investment inflows fell by 69.3 percent to only $341 million. Last year's $14.4 billion remittances is equal to 25 percent of the total ODA received by the Philippines – that is, in 20 years or from 1986-2006 ($39.9 billion).
In general, last year global foreign remittances already totaled thrice the amount of aid given by donor countries to developing nations: $300 billion against $104 billion. No wonder labor migration is now being trumpeted by the United Nations and other multilateral organizations as a centerpiece program for developing economies.
For a government whose economic policy is subordinated to bitter policy prescriptions of the IMF and WB and adherence to the World Trade Organization (WTO), the Arroyo regime's agenda to make labor migration as a major source of government income received a boost from no less than UN Secretary General Ban Ki-moon. Speaking before the Global Forum on Migration and Development (GFMD) on Oct. 29 in Manila, Ban Ki-moon, who is also South Korea's former foreign minister, hailed migration as "a tool to help lift us out the (current global) economic crisis …(where) countries can draw the greatest possible development benefits."
A model for migration
Organizers of GFMD chose Manila as the forum venue on account of the Philippines' being a role model for labor migration among developing countries and chiefly because of the remittances accruing from foreign employment. Of some 8.2 million Filipinos(3) living and working in more than 193 countries/territories around the world, 43 percent are permanent immigrants while the rest or 4.7 million are temporary or contract workers. The Philippines is one of the leading sources of migrant labor in the world market. But it tops in the deployment of caregivers and domestics, 90 percent of them women, as well as in nurses, seafarers (30 percent of the world supply), and other medical workers and professionals.
Hypocritically since the Marcos years, the government denies the existence of a labor export policy. What it cannot hide however is the existence of a government infrastructure developed since the Marcos years that gives prime attention to the export of Filipino workers and professionals. This infrastructure promotes and processes out-migration, exacts – extorts, if you will - various exorbitant fees from outgoing OFWs, accredits recruitment agencies, provides skills training and immigration lectures, and supposedly earmarks benefits for the migrant workers and their families. This bureaucracy, which is headed by the President, includes the labor department's Philippine Overseas Employment Agency (POEA), Overseas Workers Welfare Administration (OWWA), the National Labor Relations Commission (NLRC), Technical Education and Skills Authority (TESDA), and the Department of Foreign Affairs (DFA) with its office of migrant affairs and various Philippine Labor Offices (POLOS) based in many countries.
The government also sends several high-level missions every year to market Filipino labor abroad while job fairs for overseas employment are constantly held at home. Before it hosted the GFMD, Arroyo officials joined the first annual Transatlantic Forum on Migration and Integration (TFMI) held last July in Germany. Last month, President Gloria M. Arroyo signed into law the controversial Japan Philippine Economic Partnership Agreement (JPEPA) which increases the number of Filipino nurses and caregivers deployable to Japan in exchange for relaxing restrictions to the latter's exports and investments in the country.
No domestic economy
The promotion of labor out-migration is driven by the fact that the country does not have a viable domestic economy to speak of – an economy that generates adequate jobs to its people. Despite government land reform, 70 percent of agricultural land remains in the hands of landlords leaving the country's millions of farmers unproductive and without a stable income. Instead of basic industries, what the country has are globally-integrated assembly lines or repackaging plants that exploit labor with low wages and lack of job security because of government's labor contracting policy.
Moreover, labor wages are frozen low in order to attract foreign investment. It is the same policy that government promotes abroad to market Filipino skills in the form of caregivers, construction workers, and other workers. Filipino seafarers are preferred by international shipping companies because the government tolerates the low wages paid them even if monthly benchmark salaries are higher.
Attribute all these to government's adherence to neo-colonial and now neo-liberal policies which open the country's weak economy to unrestricted foreign trade and investment threatening not only the productive livelihoods of many Filipinos but also resulting in the shutdown of small industries. Neo-liberal policies exacerbate poverty and unemployment and are generally counter-productive in terms of building a self-sustaining economy and giving jobs.
With some 4 million jobless Filipinos and another 12 percent underemployed, unemployment under Arroyo has worsened – in epic proportions since the last 50 years. Thus out-migration is a safety valve to the unemployed, including thousands of professionals – the last exit from a country that is about to implode in a social unrest. Labor out-migration has also become a political tool of sorts used by the regime to arrest a growing restlessness – if not discontent – among the people against a corrupt and weak government for its inability to provide jobs and a better future for its people. Yet while its economic management increasingly relies on foreign remittances the government has not seriously taken steps to safeguard the rights of OFWs and improve their labor conditions. For instance, of 193 destination countries for Filipino workers the country has only a handful of bilateral labor agreements.
The more the economy is stagnant, the less its ability to create jobs, the more dependent government becomes on overseas labor deployment. What government cannot provide it sells in the world market to help sustain the economies of advanced countries - that bear constant crisis anyway - and the domestic needs of their ageing populations. But this is dangerous, and not only because even before the government would take this extreme option the whole economy would have collapsed. It will erode the urgency for drastic policy reform and new governance and it will calm the people into complacency and defeatism. Or it can be used by the government to evade comprehensive policy reform that would make the economy more responsive to the basic social and economic rights of the people.
But in the first place what can we expect from a government that persists in the doctrine established by previous regimes embedding economic policies to global, transnational business perspectives? Instructive at this point is a critique of the GFMD by the parallel International Assembly of Migrants and Refugees (IAMR)(4) last week: The GFMD and the UN secretary general's pro-migration declaration "arose in the midst of the worsening world economic crisis – where far more advanced…countries are fighting their way out of this crisis even as they retain their…control and power, while poverty, unemployment, and underdevelopment continue to aggravate the lives of peoples of Third World countries."
(1) S.P. Go, "Remittances and International Labor Migration: Impact on the Philippines," Metropolis Inter-Conference Seminar on Immigration and Homeland, May 9-12, 2002, Dubrovnik.
(2) Migrant labor remittances do not include those brought home directly by vacationing Filipinos or by door-to-door transactions, thus the total remittances could be more. In 2007, it is estimated to be as much as $18 billion.
(3) According to the government Commission on Filipino Overseas (CFO, 2008). Other estimates put the number at 10 million in nearly 197 countries.
(4) Held also in Manila on Oct. 28-30, 2008, the IAMR was organized by Migrante International together with the International Migrants Alliance (IMA), IBON Foundation, and other groups.
Director, Policy Study, Publication and Advocacy (PSPA)
Center for People Empowerment in Governance (CenPEG)
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