By Momar G. Visaya
NEW YORK – The home countries of international labor migrants can play a major role in protecting temporary workers, a new report from the Washington DC-based Migration Policy Institute revealed recently.
The report, by Dovelyn Agunias of MPI and Neil Ruiz of the Brookings Institution, detailed how a welfare fund financed by migrants has placed a safety net under overseas workers from the Philippines, home to the largest organized labor-export program in the world.
Entitled “Protecting Overseas Workers: Lessons and Cautions from the Philippines,” the report evaluated the management of the world’s largest worker welfare fund, the Philippines’ Overseas Workers Welfare Administration.
With OWWA as a template, the report said that protection of migrant workers can be institutionalized through three elements: a mechanism for repatriation, provision of insurance and loans and education and training.
As of December 2006, nearly a quarter of the Philippines’ labor force — almost 9 percent of the population — lived in more than 190 countries. Remittances sent from Filipino migrants in 2006 reached US$12.8 billion and are projected to approach the US$15 billion mark in 2007.
“Temporary migrant workers’ protection is an important issue. Before we should even talk about migrations’ potential as a development tool, it is important to ensure that first and foremost, migrants’ rights and welfare can and will be protected while working abroad,” Agunias, MPI Associate Policy Analyst, told the Asian Journal in an interview.
The Philippines, according to her, is a good case study to understand the challenges in protecting temporary migrants while working abroad.
The report’s authors believe that it is important for the Filipino community, both in the Philippines and abroad, to understand how the Philippine government’s premier welfare agency, OWWA, protects overseas Filipinos.
“We hear all the time that the OFWs are our “bagong bayani”, we read about the billions of dollars of remittances they send year after year, but there rarely have been serious, fact-based and multi-stakeholder discussions about the real challenges the Philippine government faces when in comes to protecting our OFWs. Through the OWWA paper, we hope to open up more of these types of discussions, critical yet constructive and based on what we know as a fact and what we don’t,” Agunias shared.
OWWA, a quasi-governmental organization funded by $25 membership fees from workers or, more rarely, their employers, is designed to protect and provide services for migrant workers. As of May 2007, OWWA had over 1 million members, representing 28 percent of the estimated 3.8 million Filipinos who worked abroad legally on temporary contracts.
The “backbone” of the services that OWWA provides, according to the current administrator, is repatriation in case of maltreatment, illness, or war; repatriation includes returning to the Philippines the bodies of workers who die while abroad. OWWA repatriated 10,834 Filipinos in 2006, most of them escaping the crisis in Lebanon. Other core services include the provision of health and life insurance and legal assistance for work-related disputes. Secondary services include scholarships and training, as well as loans for migrants and their families — although the loans have been plagued by low repayment rates.
Agunias is hopeful that other countries that are benefiting from the remittances of their overseas migrants will learn a lot by looking at the Philippine experience.
“The report shows that countries of origin can protect their migrants while working abroad. Even cash-strapped governments can raise the funds needed to finance the protection of their migrant workers. As we concluded in the paper, once OWWA’s limitations are addressed, it can be a useful template for many developing countries as they face the mounting challenges of protecting workers abroad,” she added.
HSBC economist Frederic Neumann in earlier reports was quoted saying, “The economic growth fueled by money remittances from overseas Filipino workers (OFWs) will likely last for five to 10 more years, given favorable global demographics, but a more solid industrial backbone has to be built to sustain growth of over seven percent over the long haul.”
“Despite this tremendous economic achievement in the first half, to some degree, it’s a bit of a mirage because it was fueled by a tremendous amount of remittances coming from abroad,” Neumann added. “But over the long term, that model of economic development is not sustainable.”
Agunias, to a certain degree, agrees.
“Remittances per se will not bring about the sustained growth the Philippine needs to catch up with its neighbors. As the World Bank puts it, remittances are not manna from heaven. Remittances, like any other forms of financial inflows such as foreign direct investments and official development assistance (ODA), can positively contribute to the development of the country,” Agunias explained, “However, this contribution will not go so far unless the fundamentals are right—what Neumann is basically alluding to. Like him, I do agree in the importance of a solid industrial backbone to support and sustain a growing economy.”
Looking at the other side of the coin, Agunias thinks that the potential of remittances as a tool for development, especially in alleviating poverty, must not be underestimated.
“Although remittances’ impact on economic growth is questionable as Neumann highlighted, studies after studies have shown that remittances have a positive impact on poverty alleviation and other indicators of well-being such as child schooling rate and maternal and child health. Clearly, remittances may not bring about marked and sustained economic growth; however, these financial inflows have made their way into the homes of the poor and have alleviated their situations in non-negligible manner,” she said.
The report’s authors note that the need for transparency and accountability, particularly in funding decisions, becomes even more critical when questions of mismanagement arise. For example, from 1999 to 2005, the Philippine Commission on Audit’s reports found millions of pesos in unrecoverable or “doubtful” accounts, including a 479 million peso (US$9.6 million) investment in a housing project that defaulted, making recovery of the funds “uncertain.”
To strengthen accountability, the authors recommend increasing the number of migrant representatives appointed to the OWWA board, holding periodic consultation of migrant workers on pressing needs, and establishing a system for evaluating program performance.
Finally, the authors highlight the successes OWWA has achieved through partnerships with other organizations and the need for destination countries to establish complementary protection mechanisms for migrant workers.
The entire process – from conceptualization to the final report took a total of 10 months, according to Agunias. The report is a product of The Migration Policy Institute’s Program on Migrants, Migration, and Development. MPI is a nonpartisan think tank dedicated to analysis of the movement of people worldwide.
“OWWA has shown that welfare funds can raise the revenue needed to meet the inherently expensive needs of workers overseas and provide critical on-site emergency services. With effective oversight, it has the potential to promote entrepreneurship of returning migrants,” Agunias said, adding “OWWA needs to overcome some management and transparency challenges, as is perhaps to be expected of an organization serving almost 4 million people in over 190 countries.”
The authors find that OWWA’s operations are instructive for other developing countries working to establish worker protection and assistance programs. The number of temporary migrants in East and West Asia, including the Middle East, has grown by 2.5 percent a year since 1985; in countries that belong to the Organization for Economic Cooperation and Development by 9 percent since 1997; and in the United States an average of 10.4 percent a year from 1997 to 2004.
“As temporary migration around the world continues to increase, governments from Mexico to India need models of what has and has not worked in structuring programs to protect workers abroad,” said Neil Ruiz, a research fellow at Brookings. “At the same time, it is equally critical for destination countries to establish legal norms that protect migrant workers and help build capacity for welfare funds and countries of origin.” (AJ)