Over the past couple of weeks, as thousands of migrants streamed across the Thai border every day, humanitarian groups and the government responded with aid.
But the assistance won’t have much of an impact on Cambodia’s economy, which is highly vulnerable to the influx.
Despite shortages in some sectors, jobs will not be easy to come by, particularly for those looking for wages they receive in Thailand – the magnet that lured workers over the border in the first place. In addition, total remittances from Cambodians around the world, which in 2012 accounted for $256 million, or 1.8 per cent of GDP, will slow down, depriving families of money for loan repayments, business capital and everyday necessities.
“It is a big burden,” said economist Srey Chanty. “Someone had to be proactive, but now it has to be reactive,” he added, pointing the finger at the government, which he says hasn’t done enough to entice migrants to stay in the country.
A lack of formal training for Cambodian workers and investment incentives for businesses – other than those in the garment sector – to help create attractive job opportunities, mean the prospects for returning workers are limited. And for those jobs that are available, they can’t compete with Thailand’s minimum wage of $10 per day.
There is no fixed minimum wage in Cambodia across all industries. The garment sector has a minimum wage of $100 per month, while according to the International Labour Organization (ILO) a labourer doing elementary work in construction earned $116 per month on average in 2012.
“It is only garments and basic industries that we have. Otherwise, they have to go to farm with their family. But farming is not profitable; it is not very productive,” Chanty said.
The International Organization for Migration (IOM) estimated that more than 200,000 Cambodian migrant workers have crossed back into the Kingdom over the past two weeks, fleeing Thailand amid rumours of heavy-handed tactics by Thai authorities since the May coup.
The majority of the returning, mostly undocumented workers are male and left jobs in construction and agriculture, according to the IOM.
As for options, Cambodia’s garment sector would normally be at the top of the list. The ILO said last year that the industry still had a 17.7 per cent vacancy rate at the same time it was employing more than 600,000 workers.
But that was a year ago, before violent protests for a minimum wage rise in early January cost factories millions and led to the shooting deaths of at least four workers at an industrial park in Phnom Penh.
Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said Tuesday that following violent protests in late December and January, buyers have been more tentative in placing orders, and factories have been more cautious in hiring.
“Timing is not good to say the least,” Loo said. “In terms of demand for these workers, maybe there is a lot less demand than what there was last year.”
A different set of problems exist in Cambodia’s booming construction industry, where workers are in high demand. Some of the largest construction companies yesterday welcomed the flow of potential workers.
“I think we need at least 1,000 more workers,” said Touch Samnang, project manager and architect for the Overseas Cambodia Investment Corporation, which works on large construction projects on Koh Pich.
“Now we have more projects coming up, not only my company but other companies also require a lot of workers,” Samnang said, citing new Chinese developments in Phnom Penh.
Thierry Loustau, managing director for construction company LBL International, also saw the situation as an opportunity, but he added that the industry alone could not absorb all the workers.
“For us at our construction site, we have about 30 per cent workers less than what is required; we face quite a lot of problems to find some people,” he said.
Still, he pointed out, the wage differences in neighbouring Thailand would make it a difficult balancing act for the labour market.
“I think it will [be] very critical, even if there is more supply I cannot foresee a redistribution of the price increase for the worker,” he said.
Kang Chandararot, president of the Cambodia Institute of Development Study, agreed, saying that wage expectations would put pressure on the industries that are the most poised to absorb migrant labourers.
Chandararot said the government, private sector and NGOs would soon need to connect workers to Cambodia’s workforce to prevent a worsening crisis on the home front.
“[There is] little time left due to financial pressures amongst families of returning workers, he said.
The stories have much in common. Like many returning workers, May Mann moved to Thailand to better his financial situation. He took out a loan from an informal lender based on future earnings from his work in Thailand. Now, he can’t make the repayments.
“I do not know what to do to solve the issue,” he said, adding that creditors have already approached him. “I just have empty hands. I beg for understanding from the creditors as I don’t know how to get money to give them.”
Remittances are often used by families to help support agricultural work and in many instances to help pay back loans, according to microfinance institutions (MFIs).
Mam Choeurn, chief operating officer at Angkor Mikroheranhvatho (Kampuchea), one of Cambodia’s major MFIs, told the Post that an initial assessment of the situation had revealed that the ability to repay loans was hampered, but the full extent will not be known until a more detailed study is completed.
“We are worried, but I hope it is not serious,” he said.
The financial burdens and a lack of employment opportunities mean that many who have returned will seek to move on again, according to Ya Navuth, executive director of KARAM, an NGO that assists migrants.
“Many Cambodian people migrate to other countries, especially Thailand, for employment. Now you can see after thousands of Cambodians have been deported by the Thai junta, it creates a big burden for the royal government of Cambodia to create more jobs, for Cambodian people,” he said.
“Migrant workers, they cannot stay long in Cambodia because they do not have jobs, they might remigrate again to other countries, so they might face exploitation and human trafficking again in the country of destination.”
Joe Lowry a spokesperson for the IOM, said the top priority now is dealing with the humanitarian situation on Cambodia’s border. However, he added that damaging economic effects could be avoided if migrants returned to Thailand – but only as documented workers.
“It would be nice to regularise the situation and people can re-enter the country legally to work and not have to pay any fees to brokers and so on, because that’s what really keeps people in poverty,” he said.
The Ministry of Foreign Affairs released a statement after a meeting with Thai officials on Tuesday encouraging those with legal migration status to return to Thailand. It adds that Thai officials will look into how they might process registrations for the many undocumented workers who have left.
“They [migrants] have to pay to get jobs because they are coming out as illegal, so if they didn’t have to do that it would be much simpler for them to send money home and that benefits everybody,” Lowry said. “That benefits Thailand, that benefits Cambodia, and migration benefits the ASEAN community at large.”
ADDITIONAL REPORTING BY HOR KIMSAY