The Dark Side of Remittance Economies

In Development and Base of the Pyramid circles, we often discuss remittance economies and innovative ways to send remittances home; what we don't always think or talk about is what forces people to leave their home countries in the first place and what they experience when they go abroad. In the case of Nepal, as I've written about before, migrant laborers most often travel to the Middle East and Southeast Asia, often having their passports taken away from them upon arrival and not getting paid for months at a time. So would systems that facilitate sending remittances home actually encourage and facilitate such an unjust ecosystem? In the case of Nepal, I think we are better off creating jobs at home.

I took the opportunity to interview one such laborer, Aslam, who spent 18 months in Doha, Qatar. In Kathmandu, he is a widely respected mason, but in Doha he simply broke stone and his skills were not put to full use. Aslam wanted to see the world; while abroad he went to the ocean for the first time and flew on an airplane for the first time. But in the end, the money he earned in Doha only paid off the loans he had to borrow in order to go to Doha in the first place, essentially breaking even and not profiting.

So when we in BoP circles think about remittances, let's also think about what forces people to leave their homes in the first place and what they endure and sacrifice in order to send those remittances home. We need to create jobs at home- that is certain. But when those are not available, is it a better option for people at the base of the pyramid to travel abroad where they make the same or even less money, are separated from their families, and are treated like second class citizens? Below is a video and transcription of my interview with Aslam, which offers a glimpse into the lives of the laborers that churn remittance economies.

The video is available here, on YouTube.

Jenara Nerenberg, NextBillion.net: Why did you go to Qatar?

Aslam, Nepali mason: I went to Qatar to find work. I wanted to make extra money from work so I could eat happily.

JN: What did you experience there?

Aslam: Work is a lot harder there than here. It's a lot hotter over there. It's twice as hot there. They don't care how bad the weather is there; they just want you to work. If you don't go to work, they cut your pay.

JN: How did they treat you?

Aslam: Some of the managers are nice, but others are very untrustworthy. Some people don't have a lot of kindness. They tell you, "You came from Nepal to work. Whether you live or die, it's all the same. You came here to work. If you work, we give you money. If you don't work, we don't give you any money." They don't let you take any time off from work either.

JN: Why did you come back to Nepal?

Aslam: The thing is, I got placed with a really bad company. I was very unhappy, and they also turned out to be very untrustworthy. At one time they didn't pay me for four months. Even though we had a signed contract, they didn't give me any money. It's a lot harder than Nepal there. But it's harder for all the laborers, not just Nepalis.

JN: Are you happy you went?

Aslam: I went to Qatar and it was a very unhappy experience. I was happy when I went there; I was hoping to earn extra money so I can have an easier life. But I found a lot of unhappiness there. I even filed a case against the company. I even went to the Nepali embassy. After two or three days, I got into an argument with the Embassy. I asked them, "Why do you even have an Embassy here? Go back to Nepal. You're just here to spend the government's money. You're not doing anything while so many Nepalis are in trouble. While there are so many Nepalis suffering, you're just sitting in a comfortable chair and eating good food."

I got into a labor dispute and I even took them to court. But they don't care what Nepalis have to say. They call Nepali people "jungly." That's how much unhappiness there is for Nepali people abroad.

JN: Are you happy to be home in Nepal?

Aslam: Yes, I am happy to be back in my own country. Once you come back to your country, you're happier whether you have money or not.

JN: What do you want to tell other Nepalis who are thinking about going abroad to work?

Aslam: If someone wants to go, it's obviously their choice. Once people don't find work in Nepal, they will go. They think that going abroad will earn them more money. I will tell them, "Don't go." Try to work in Nepal and if you can't find work, then take care of your home.

JN: Would you tell others to go abroad or stay in Nepal?

Aslam: I got some phone calls asking me if I wanted to go to Dubai. But I told them, I'm going to stay in Nepal and work. For people who want to go, they will spend at least 140,000 rupees. You might as well spend that much money here.

JN: Are you happy with the amount of money you earned while there?

Aslam: How can you be happy bringing back money that made you so unhappy? I earned about 150,000 rupees. I used that to pay back my loans.

JN: Tell me about some of your experiences.

Aslam: On Saturday they have a big get-together where people gather around and have fun and talk. The whole country gets a holiday. They eat and drink and be merry. All the Nepalis there are experiencing hardship.

I liked the gardens over there. I liked traveling around. I found the country beautiful. But what good is being in a beautiful country when you can't feed yourself?

Hartmut Rast

Jun 9, 2009

New ways have to be found in general. Working abroad should only be temporary and being seen under the aspect of a global increase in wealth and solution against poverty in different parts of the world. The earliest "guest workers" in Europe did so. Either they assimilated and brought their families with them after some years of experience or they took the money and gained job knowledges to build up their own business in their home countries. So they have participated in a beneficial way from the economic development in their home areas two-fold. Hartmut Rast, London

Dennis-Uganda

Aug 4, 2009

There are pros and cons to this!

Just gotten to know this site and i just can't have a enough of it.

Jenara, its an amazing post and anyone would feel for Aslam.

That said, remittance economies are sort of a given to the least developed countries the world over, its not neccesarily because there are no jobs back home but because many people think its always 'prepared differently in the neighbourhood'.

Many countries in Africa have thrived on remittances from migrant workers, companies like WesternUnion, MoneyGram, et al, were turning astronomical profits of course prior to the recession given their money transfers in almost all pockets of the world.

The con to this was actually not where they worked (because before you travel you brace yourself for the good and bad) but to whom they sent money back home. A case in point here in Uganda is many remittants fell out with certain members of their families because they ended spending their money, a lad has spent 10 years in the UK, sending 60% of his earnings back home to set up businesses like property (real estate), etc but the members eat his money, on his return to check on the progress, there is nothing on the ground despite the timely pictures of houses springing up he used to receive.

For Aslam, his plight is what you might call being unlucky, the preparation never met a worthwhile opportunity.

He did mention being posted to a wrong company, chances are that the people he travelled with where posted to good companies, paid on time, broke even and turned a profit which their familes are enjoying back in Nepal, for such people when you ask them of their experiences, they will say it was hard in the start but we settled in, and they will definitely encourage others to travel.

Lately most migrant workers are trade skilled, that is, they have vocational skills like Aslam as a mason, with Qatar being a country on the move, property development on the rise, his services would have been appreciated there without doubt.(unlucky).

Another example is the post Iraq war security demands, loads of companies here in Uganda have recruited desperate Ugandans to travel to Iraq as security officers, many have no regrets, they can afford a decent meal for their families, afford school for their kids, on other side of the coin, many are crying foul, never paid on time, over worked in harsh conditions and they wouldn't recommend anyone flying to Iraq, it was a subject of debate in Uganda's parliament, but guess what, thousands flock the offices of these recruiting companies to register for Iraq postings regardless of the bad testimonies from the 'have been there', many are even bribing their way to Baghdad.

The question is why? and can we do away with it?

For the need to better one's lifestyle, the proposition of travelling abroad reels in many poor people's minds regardless of where you, a big percentage leave low paying jobs to try out their luck elsewhere, some are fortunate others are not.

As much as we need to create jobs in these LDCs to utilise local labour, the jobs should provide satisfaction to retain the labour otherwise remittance economies will always be a part of the world and especially in the least developed countries.

Jimmy T

Aug 17, 2009

Remittances

One would expect remittances to remain relatively stable because the money isn't usually used for investments, but I guess unemployment is going to hurt just about everyone! Here is an interesting article on why remittances might fall in the next couple of years: https://www.mindreign.com/en/mindshare/Global-Economics/Remittances/sl35291137bp484cpp10pn1.html

Brian

Oct 8, 2009

Oversimplified

This is not the analysis that I expect from NextBillion. Using anecdotal evidence to describe migration as "forcing" people to leave their home country is very commentary.

Migrants almost always belong to the aspirational segment of their class. Amongst the poor, they are the middle-poor who have some level of stability to save for the initial investment required to migrate. Amongst the educated, migrants are often highly skilled, but can not match their skills with jobs in their own area.

There is extensive literature which shows that economic migrants describe their decisions to migrate as motivated by seeking opportunity elsewhere, not fleeing local circumstances (this may be more closely related to refugees).

A website like NextBillion which has championed the idea of bringing markets to the un-marketed certainly is very aggressive on advocating for increased flows of capital to the poorest borrowers of the world. Then, why would NextBillion not also advocate for the freest movement of those same people to seek out capital (jobs, education, investments) in the rest of the world.

NextBillion needs to get it right: migration is micro-finance.