As Migrant Labor Stalls... Cambodia's Economy Wobbles

Two-Thirds Drop in Workers Entering Korea... 120,000 Returned from Thailand
Job Opportunities Expected to Decline Further Next Year

[Asia Economy Phnom Penh Correspondent An Gil-hyun] Remittances sent home by migrant workers from low- and middle-income countries (LMIC) around the world are expected to sharply decline due to the impact of the novel coronavirus disease (COVID-19) pandemic. LMIC refers to countries with a gross national income (GNI) per capita of $3,955 or less.

According to the migrant worker report "Migration and Development Brief" released recently by the World Bank in October, remittances sent home by overseas migrant workers from LMIC are expected to decrease by 7.3% to $508 billion this year compared to last year. Next year, it is expected to further decline to $470 billion. The World Bank pointed out that the decrease in remittances is larger than the 5% drop during the 2008 global financial crisis.

The direct cause of the decline in remittances is the COVID-19 pandemic. The economic slowdown has worsened employment conditions. Remittances from migrant workers are a very important source of funds for LMIC countries. Last year, foreign direct investment (FDI) and overseas development aid to LMIC amounted to $534 billion and $166 billion respectively, both less than the amount of remittances sent by migrant workers.

In particular, remittances from migrant workers originating from underdeveloped countries in the Asia-Pacific region are expected to amount to $131 billion this year, a 10.9% decrease from last year. According to the World Bank, the country with the largest remittance amount from migrant workers in the Association of Southeast Asian Nations (ASEAN) is the Philippines, expected to reach $33.3 billion. Vietnam follows with $15.7 billion, and Indonesia with $9.8 billion. The amount sent to Cambodia is about $1.4 billion.

The problem is that the number of jobs for migrant workers is likely to decrease further next year. The economic instability caused by the spread of COVID-19 continues to affect migrant workers. In Cambodia, the current number of overseas migrant workers is estimated to be about 1.2 million. Since the full onset of the COVID-19 pandemic in March, about 120,000 Cambodian workers have already returned from Thailand alone. However, overseas employment opportunities for them are extremely limited.

Labor dispatch from Cambodia to South Korea has also been blocked except for "diligent workers." Diligent workers refer to those who have worked at the same workplace for the first 4 years and 10 months without changing jobs, voluntarily returned home, and can re-enter after 3 months without taking a test to work again for another 4 years and 10 months. About 30,000 Cambodians entered South Korea from January to August last year, but the number of entrants during the same period this year dropped by 62.9% to about 11,200.

The Cambodia branch of the Human Resources Development Service of Korea, responsible for dispatching workers, stated, "Workers newly recruited last year went to South Korea until early this year, but after that, they have been unable to go due to COVID-19. Special tests for those wishing to re-enter were held twice in April and October last year, but this year only once at the end of October, selecting about 1,000 people."

This content was produced with the assistance of AI translation services.