The Development Potential of Migration

The foreign employment policy of a country is deliberately and consciously designed as an important component of total national development policy. In an ideal situation, the specific objectives of an orderly migration program, particularly of a developing sending country, has to do with enhancing returns on public investment in education and training, the fuller utilisation of human resources, and increasing the positive impact of migration and remittances on the growth and development. (1) In the case of the Philippines, overseas employment was first seen sometime in the early 70s as a stop gap measure to buoy up a deteriorating Philippine economy beset with high unemployment and tight balance of payments. Eventually and to this day, it has become part of the country's national development policy, not with the above specific objectives in mind, but primarily as a relief from the burdens of steep unemployment levels and for shoring up foreign currency reserves.

Overseas workers continue to be vulnerable to exploitation and abuse in their foreign workplaces. Bilateral agreements between the Philippines and receiving countries continue to be thin on the ground, and there is only so much that government or international redress systems can do to protect migrant workers. It is said that overseas migration has reached a level that is well beyond the capacity of our government to manage, in terms of providing services and guarantees. (2) This is not to say that migration has not satisfied many basic needs of thousands of Filipino families. But one cannot also afford to ignore the huge social costs to migrant families as a result of prolonged separation, the breakdown of families, the deterioration and underdevelopment of children, and the development of a culture of consumerism . Indeed, the country and its citizens are caught in a vicious migration trap- the local economy has become overly dependent on overseas employment, while its traditional dependence on foreign capital for economic development has only resulted in the futher disintegration of local structures. Worse, globalisation and liberalisation of trade, environmental degradation and the mindless conversion of productive rural land to subdivisions and golf courses, have stunted the growth of a domestic rural economy, resulting in further employment and displacement of people.

Theoretically, sufficient scales of emigration could ultimately result in removing excess labor supply, reduction of unemployment and the increase of wages. The Philippines has one of the highest proportions of its workforce overseas, now estimated by the Philippine government at about 7.2 million in 193 countries world-wide. It has however been observed that this mass exodus seems historically to have had only a limited effect on levels of unemployment, and even during the late 1970s to the early 1980s, despite more than 400,000 people leaving each year, unemployment levels in the Philippines continued to rise, and neither was there an increase in wages. The government estimates that there are now about 700,000 Filipinos leaving annually to fulfill foreign job contractual commitments or simply leaving to look for work abroad.

In 1994, East and Southeast Asia was considered as the world's fastest growing region, with growth being transmitted by many countries very effectively into employment. Curiously, the Philippines recorded the highest unemployment rate of 9%, still believed to be increasing to this day. (3) The development function of foreign employment has been totally bypassed while the fate of the Filipino work force has been left to the vagaries of the foreign labor market, which incidentally, was how managed labor export started for the country-as a function of market growth. The other bad news is that foreign labor markets are shrinking and Filipinos now also face competition from other nationalities, and the makings of a massive return of Filipino overseas workers has already been felt, especially in crisis hit countries and in those occupations where they are overrepresented. (4) Yet the local economy is in no position to absorb the increasing number of Filipinos who will certainly lose their jobs abroad .

International migration agencies' reintegration programs have so far concentrated on assistance to political refugees, asylum seekers and stranded people, and it is only recently that programs for purely economic refugees are being looked into. On the other hand, migrant NGOs have traditionally focused on programs for the protection of migrant rights. But the search for solutions to migrant problems has somehow evolved into what is now current thinking that advocates more than just the provision of social and legal services, but also mobilising migrant communities to recognise their basic economic and political strengths, and parlaying these strengths into workable strategies and practical programs that will encourage the judicious use and direction of earnings into small businesses that could be an alternative source of livelihood for the returnee and the community into which he or she reintegrates. More than this, it is perceived that the replication of such programs in other overseas communities in greater scale, would offer solutions that will in the medium to long term, reverse the migration cycle through the development of a vibrant local economy, the lack of which is obviously one of the reasons why people migrate to the cities and overseas. In such a case, foreign employment would translate to growth and development for the Philippines.

Assisting Overseas Filipinos Respond to their Reintegrative Needs

Ground breaking work on such thinking is already being done in Asia. (5) Here in Europe, a working group of Filipino expatriates is seriously studying similar ways of harnessing the economic and human resources of an estimated 500,000 overseas Filipino workers and residents . The dynamics of mobilising overseas communities in Europe are altogether different, given the large number of workers who are not documented to work and the growing restrictiveness in the entry and employment policies of European governments, that is even exacerbated by the presence of racism and xenophobia. On the other hand, the sustained efforts of migrant groups and human rights organisations have provided some counterbalance to these negative forces, as certain European governments , have come up with amnesty programs, as well as with legislation, that have offered illegal workers, especially those who have toiled for years,the opportunity to regularise their status. The overseas work force in Europe consists of a large number of women, many of them highly educated, working in domestic households, including an estimated quarter of a million seafarers working on European ships, and others whose tenure might be termed as temporary or contractual, or as we have termed Unsettled Communities, as opposed to the Settled Communities, which are mostly Filipinas who have come in the 1970s as legal workers, and others who have married and could now be holding permanent residence, have children, and may have acquired the citizenship of their host countries.

As a result of consultations in the past 8 months with both such communities , migrant organisations and networks, the working group has identified that most, if not all, overseas Filipinos, regardless of status or citizenship, have the desire or the need to reintegrate. The most common manifestation of the desire to reintegrate is simply wanting to return to the Philippines, but the average overseas Filipino does not know when or how this will be realised. Reintegration can also mean sharing their economic largesse with relatives, regardless of whether they wish to return or not. Overseas Filipinos, who all these years have been a traditional source of funds for all imaginable needs of their families and relatives back home, are already suffering from fatigue from this seeming economic overdependence, such that they now frequently ask when and how this dependence will end. Small business ventures of relatives back home, in which overseas Filipinos had sent money for, in the hope of making the latter self reliant, have become failures, mainly because of the lack of practical business orientation on both the giver and receiver.

Since most returnees will have no other alternatives but to engage in self-employed business, and given also the skills that overseas workers have developed and improved as a result of working in other more advanced and challenging environments, there is a good reason as well as a need to improve and integrate all the existing reintegration programs for these potential entrepreneurs, both overseas and especially in the communities where they return to, in order to maximise and ensure the judicious use of the savings that they repatriate. Addressing the Filipino's reintegrative need appears to be a natural and acceptable entry point for organised efforts of harnessing the economic resources of overseas Filipino workers.

Although the Philippine government has agencies that have the legal mandate, and the physical and financial resources that can be utilised to assist returning overseas workers, these agencies generally do not have the orientation or the proper structures that can lead and operate a coherent national reintegration program. For instance, recent studies have shown that many returnees do not know that there are agencies such as the Department of Trade, the TESDA, OWWA, the Commission on Overseas Filipinos, and even government financial institutions, that have facilities and even loanable funds, that can be tapped for small business ventures. (6) Given these resources and the fact that it is not now also uncommon to find competent and committed civil servants in certain places, it would not be prudent to ignore such facilities, however, migrant NGOs must constantly find ways of working in constructive though critical engagement with government agencies. Truly there are successful experiments showing that ngo-government collaboration is possible.

The Concept of Harnessing Migrants Strengths through the Establishment of a Migrants Bank

It is our view that reintegration should only be part of a bigger strategy of addressing the structural causes of migration. Because the task of addressing migrant concerns may be likened to sweeping dead leaves in the autumn, it is submitted that studies should now be more focused on identifying institutions and financial mechanisms that can have a significant economic impact at least in the medium term. While a planned return is important, it is also prudent to ask " what the overseas Filipino worker is returning to", for what good are repatriated savings and investments if they are only subsumed into the same distorted economic system that has promoted the inequality and the push factors that trigger outmigration.

Under present conditions, money circulation in the rural areas is poor: the bulk of money in circulation is in the urban areas which is the hive of commercial activity, and countryside deposits are probably transferred there to maximise profits. As in any other business, commercial banks and now even government financing institutions, have to gear themselves to the dictates of market forces, and that is why portfolios are catered to consumer spending, real estate projects, peso loans to big multinationals, and other ventures that do not have a direct, widespread benefit to a majority of the people.

The experience of some countries like Mexico and Bangladesh, have been cited to argue that remittances have had the effect of increasing the demand for goods and services and the generation of additional jobs. The Mexican experience especially has been cited to show how landless rural workers increased output in the agricultural sector because the families were able to invest directly in farm production, tools, fertilisers and other previously unaffordable items. However, it has also been pointed out that " it is more likely that the visible signs of success in new housing and consumer goods stimulate others to follow the same path. Moreover, the increase in wealth in the community also makes it easier for potential migrants to get the loans they need to travel." (7)

Figures of the Bangko Sentral ng Pilipinas show that remittances have accounted for from 3 to even 6.2% of GDP,(Table 2) while last year's estimates are already in the 8 billion mark. While such levels of remittances should already have some multiplier effect in the development of our economy, it is also highly possible that these have gone to consumer spending, payment of debts, long term investments such as education, building and improvement of houses, and other items that do not create widespread employment. Consumer spending would have been a boon to local manufacturers had the demand been for local goods, but signature items and other imported goods have always been chosen to compensate for guilt feelings by a breadwinner long absent from the family.

Given the Philippines' commitments to the WTO, its huge debt service, and the present status of patronage politics, it could hardly be expected that things are going to change for the better even in the long run. Indeed, anyone who believes that the culture of migration now present in the Philippines, is a serious hindrance to development, must help in finding alternative institutions that will insulate the people from these negative economic and political forces and allow the real benefits of migration to translate to their growth. There are a number of options under study, but a bank appears to be the ideal mechanism which the private sector could perform better where government has not been successful-- to properly manage and rechannel the earnings of overseas workers in order to ensure that these go into projects that will create a greater demand for local goods and services as well as employment and livelihood opportunities. Not only that, its products and services should be geared to the needs of migrants, their families, particularly to those returning and reintegrating to their communities.

The bank's capital may emanate from direct investments and remittances channeled through this bank, not only from those working temporarily abroad, but also from overseas filipinos who are permanent residents , coupled with grants or soft loans from international or foreign development institutions, to enable it to function with a social agenda. Perhaps such a bank could be considered as part of the studies being made by international organisations on possible links between development aid and migration, or part of the reintegration programs of receiving countries. Ownership structure is being studied to allow all overseas Filipinos, regardless of nationality, and their organisations, to participate. Filipino professionals who have served in business, management or banking positions abroad are now already being contacted for possible future service in the bank as officers and technical consultants. The experience of the New Rural Bank of San Leonardo(Nueva Ecija) a pioneer in microfinance in the rural areas, and a hugely successful example of how a rural bank could increase the productivity and the economic status of a municipality, should be further studied and replicated in other rural areas.

Economic Resource Center for Overseas Filipinos

The working group mentioned above is in the process of establishing an Economic Resource Center for Overseas Filipinos(ERCOF) in Geneva, in order to pursue the following activities that can lead to the establishment of the aforesaid institutions:

1. Conduct a survey in Geneva and in other key European cities where there is a heavy population of overseas workers, in order to study their reintegrative needs, disposition of income and remittance behaviours, the availability and effectiveness of government programs for returning Filipinos, particularly those planning to start small enterprises, OFW demographics and gender disaggregation, the existence of reintegrative programs within certain European receiving countries and in international organisations, and determine the feasibility of setting up economic resource centers in different cities.
2. The above survey must be tied to a study on the formation of a financial mechanism that will take care of the financial and microcredit needs of OFW savings associations and cooperations, the financial needs of individual OFWs and/or their relatives who wish to set up small enterprises, and respond to the business projects of referrals generated by the economic resource centers.
3. While the above surveys are ongoing, to develop a data bank of products and services, that will include links to financial institutions and with government and private agencies that have existing programs to assist returning overseas Filipinos, and to use this data bank and links in order to pilot an on-site economic resource center in Geneva for those who may wish to receive assistance on entrepreneurship, investment or any other economic activity in the Philippines.

The ERCOF is supported by major Filipino migrant groups and networks in various key cities in Europe and is now currently establishing formal links with financial and economic institutions in the Philippines. Last year, assisted by a grant from a Dutch development agency, it conducted a survey of overseas Filipino communities in the UK, the Netherlands, Germany, Switzerland and Italy, including making available to these audiences, resource speakers from the Philippines coming from the microfinance sectors, cooperatives, as well as the representative of a leading migrant NGO engaged in reintegration.

Although ERCOF core group members come from different European countries, they have decided to establish its headquarters in Geneva, given its proximity to the major international migrant organisations and in recognition of its being a traditional forum for international humanitarian activities. ERCOF believes that the concept of harnessing the economic strengths of migrants through the formation of a bank or other alternative financial mechanism, is a movement whose time has come, and thus invites everyone to share their insights in what is believed to be a rare economic opportunity not only for migrants but also for anyone who wishes to participate in a genuine people driven initiative. ERCOF is ready to submit formal proposals for collaboration with international and humanitarian organisations, as well as individuals, who may wish to share their expertise or resources in pursuing economic, reintegrative or other similar initiatives, that can impact on long term migrant concerns.

Special Acknowledgement
ERCOF wishes to acknowledge the contributions of our colleague in Germany, ALAN CELSO GLINOGA, who on 17 January 2000 succumbed to a fatal viral disease while doing research and networking for ERCOF in the Philippines.

Footnotes:

1. Sending workers Abroad. A Manual for low and middle-income countries,
   Abella, M. I., Abrera-Mangahas,M.A. , 1997, ILO Geneva
   pp. 6; 14-22
   
2. Philippine Overseas Migration Amidst the Asian Crisis.
   A Paper presented by Kakammpi for the Southeast Asian Regional conference on Migrant Workers, Bangkok, 5-6 Nov 1998.
   
3. Global Nations. The Impact of Globalisation on International Migration.
   P. Stalker, pp 48-49
   
4. The Impact of the Asian Crisis on Filipino Employment Prospects abroad
   W. R. Bohning, pp-. 24-25
   
5. Asian Migrant Yearbook(1999)
   A Publication of the Asian Migrant Centre Ltd., 1999.
   
6. A situational analysis of needs and response programs for the reintegration of returned Overseas Filipino workers.
   A study by the ICMC, for the ILO-Seapat Workshop,Manila, January 1999.
   
7. Global Nations, P. Stalker, pp 53 to 54
   

Tables

Table 1. Remittances of Overseas Contract Workers 1978-1994(in million US)

Source: Bangko Sentral ng Pilipinas.

Table 2. Remittances of Filipino OCWs and GDP (in million US$)