Worker-remitted funds are already a well-established and recognised part of Fiji’s economic landscape. However, today the quantity of remitted funds is substantially increased. This is a phenomenon that does not apply only to Fiji, or even only to the Pacific or the wider Asia–Pacific region. It is a worldwide occurrence and now respected and sober international institutions such as the ILO, the World Bank, the ADB, the Asia-Pacific Economic Cooperation (APEC) group and the IMF, together with a range of aid providers including the Australian Government and the EC, are paying attention to a situation that they now argue ‘provides the most direct, immediate, and far-reaching benefit to overseas workers, their families, and their countries of origin’.
Overseas worker remittances to families and communities in Fiji have risen and risen again. By 2002 remittances from Fijian nationals living overseas had risen to an estimated $F232.4 million (approximately $A180 million). A year later, this figure was deemed to be $F243.4 million (approximately $A190 million) and, by the end of 2004, some sources estimated it was as high as $F317 million (approximately $A244 million). [42] It is clear that remittances are replacing sugar and garments to rest alongside Fiji’s flourishing tourist trade as the country’s main means of generating foreign exchange. It is then equally obvious that ‘maximising the benefits from international migration is crucial’. Other Pacific Island countries have already had considerable success in this area. Residents have enjoyed increased consumption and the provision of services including education and health facilities. They have also had access to improved housing and there are reports of some small-scale investment, though it is also generally agreed that consistently successful formal schemes (rather than local ad hoc schemes) aimed at encouraging investment instead of consumption have yet to be implemented.
It is against the background of increased living standards for residents of other Pacific Island countries and a demonstrated willingness for unskilled or semi-skilled Fijians to seek overseas employment that Fiji’s Prime Minister, Laisenia Qarase, has applied pressure on richer neighbouring countries, particularly Australia, to accept Fijian ‘guest workers’. He argued that if the Australian Government was to demonstrate real concern over good governance and security in the region, it must offer policy initiatives based on the premise that ‘you can only have good governance and security if the citizens of the country are living a reasonable standard of living.’ He went on to say that ‘once you take that away, then you have very fertile grounds for instability’. Nevertheless, Australia’s Foreign Minister, Alexander Downer, and Treasurer, Peter Costello, insisted that guest workers were not consistent with Australia’s culture. Their immediate reaction was to conclude that Australian labour shortages would be better met by extending the visas of working travellers (usually young backpackers). [43]
The extent of the improvement in a family’s lifestyle on the basis of remittances received has proved to be hard to estimate, but it should not be underestimated. While it is a widely held view that remittance funds are used primarily to meet the consumption needs of recipient families, we also already know from anecdotal evidence that remittances have been used as a source of low-level, informal-sector investment and we would expect this to have the advantage of not being encumbered with the very high interest rates imposed by moneylenders. John Connell, who has done a great deal of work on the issue of remittances by Pacific Island workers, has (together with Richard Brown) also noted that a range of developing countries have already adopted formal measures aimed at encouraging migrants to become investors. Connell and Brown have cited Turkish measures giving migrants preferences in village development cooperatives, a scheme in Pakistan that allows migrants to import machinery at concessional rates and to invest in export-processing zones; and a Bangladeshi Government offer of incentives for investing remitted funds domestically. [44] These types of initiatives are becoming increasingly popular with developing-country governments and international policy advisors. There are many examples. It is currently being suggested to the Mexican Government that the role of micro-banks should be boosted in order to promote rural and peri-urban development using remittance monies. The argument used is a familiar one. It is that to date some 80-90 per cent of remittance monies are dedicated to consumption and the reproduction of workers. While there is evidence that remittance funds are also used for housing and community projects and for health care and educational opportunities, and it might well be the case that they reach further than merely reproducing usually unskilled migrant workers, the argument that remitted funds are used predominantly for day-to-day consumption is well suited to the push for a more productive domestic approach to the use of remittances. Those promoting Mexican micro-banks have further boosted their argument by recognising that many families in the home country lack efficient and safe ways to save as well as lacking credit opportunities. They also cite the case of a micro-bank having been spontaneously established by home country members of a transnational community. This Mexican community was not only locked out of usual financial services by the lack of formal financial credentials held by citizens, but by geography. It was two hours from the nearest city on an unpaved road. The community offered as an example consists of a municipality that has 16,000 inhabitants in 60 small towns where somewhere between 40 and 70 per cent of the population have emigrated seeking work. The populations of the towns are reliant on remittances as their main source of income. [45]
At the same time as discussions, conferences and debates in the international arena have been focusing on the issue of worker remittances, commentators within and outside Fiji continue to display a somewhat ambiguous approach to the considerable growth in the country’s remittances. On one hand, they note that skilled migrants such as nurses and teachers (together with rugby players and soldiers) represent a loss of scarce human capital and, on the other hand, they note that ‘remittances are one of the main sources of domestic spending and are driving growth in the economy’. However, these commentators pay too little attention to what is most likely to be a fast-growing number of unskilled migrant workers who will remit funds to families who might well have been reliant mainly on the informal sector for their income. Unless they add this group to their consideration of the overseas worker/remittance issue, they will be out of step with what is happening on the ground in terms of the current international market in labour-time. Having made this point, I should also note that the pressure to provide opportunities for not only skilled, but unskilled potential migrants has been reflected in Prime Minister Qarase’s plea to Australia to accept unskilled guest workers from Fiji; in the reported ‘success’ of the Pacific Forum in an agreement sought with the EC to allow guest workers to enter the EU; and in Fiji Government concern that ‘some order and accountability’ be brought to bear on ‘the overseas job rush’. It is known that ‘a sizeable number work, some illegally, in Australia, New Zealand, and the United States’. [46]
It is quite clear that in spite of a degree of indecisiveness in terms of the approach of a number of commentators, ‘Fiji is catching up fast on the world’s latest lucrative exporting commodity: human labour’. However, a number of the pitfalls of this form of ‘export’ are already evident. Apart from those who are working overseas illegally, a number of Fijian workers remitting funds are newly employed in contract work in Kuwait or Iraq and this has led to some problems. In contrast with the 1,000 positions offered to Fijian men by the British Army, American contractors have been recruiting workers at rates much lower than the cost of their home-country workers and this has allowed some people to suggest that the present contracting of relatively cheap Fijian workers amounts to ‘a form of 21st-century black-birding’. [47]
Among the problems associated with the present growth in overseas workers’ remittances is one that has the smell of corruption. The promise of overseas employment is offered in order to make quick and less-than-honest money. There are a number of reports of fees as high as $F250 to $F300 being paid to be considered for an overseas posting, usually in Kuwait or Iraq, while $F150 is a quite usual payment. There are reported to be as many as 20,000 paid-up applications for what is estimated to be a contract to supply a maximum of 2,000 workers. In the context of Fijian incomes, the application fee is considerable and is often borrowed. The Fiji Government initiated an investigation into the company concerned. [48] A further problem associated with the now much greater reliance Fiji’s citizens have on overseas remittances for employment opportunity, domestic consumption and the generation of foreign exchange earnings is the vulnerability to global forces that this form of income represents. Fiji’s sugar and garment industries have already demonstrated just how hazardous the international marketplace is. A possible and equally serious vulnerability would be an economic contraction affecting host countries. This would, as we saw in the 1997 Asian financial crisis, lead to migrant workers (legal and illegal) being summarily repatriated. Their temporary status would ensure that they were ineligible for severance payments; quite often migrant workers have not received the wages owing to them. In the period after the Asian financial crisis it was reported widely that some employers took advantage of the vulnerability of their workers. They intentionally delayed or avoided wage payments and dismissed employees unfairly. In some places, most notably in Malaysia and Indonesia, xenophobia was expressed and had a marked effect on the treatment of migrant workers. In times of economic contraction, it is likely that workers will be given little or no notice of the change in their circumstances. Migrant workers, and indeed resident garment workers in Fiji, have often been presented with no more than a chained gate and, at best, a rough sign. [49] And, as though the above concerns are not enough to consider, they by no means exhaust the problems countries and workers and their families might have to address in the course of depending on remittance incomes. For example, another global hazard that has appeared on the remittance agenda concerns the push by a number of well-established global financial institutions, and at least one regional grouping, APEC, to ‘shape and formalise’ (or more correctly, influence, regulate and, for private companies, derive further profit from) worker remittance payments.
In mid-2004, a symposium was held in Tokyo to discuss ‘Shaping the Remittances Market by Shifting to Formal Systems’. APEC, the World Bank and the ADB sponsored this symposium. Their declared mission was to bring together ‘key stakeholders to discuss opportunities and innovations in the cross-border remittance industry’. Their stated goal was to ‘create market incentives for customers [workers remitting funds overseas] to shift from informal to formal financial systems’. The World Council of Credit Unions, a range of developing-country credit union providers, the Global Trade Association, Western Union (claiming its success and ‘very strong business model’) and those who favour ‘ATM-based money transfers’, and particularly ‘Visa and MasterCard branded transfers’, were uniformly keen to point to the problems associated with informal money transfer. They noted that when funds travelled home via friends and relatives the delivery time was often slow. They also noted the potential for loss and theft using informal transportation methods. They noted the potential for black-market transactions and money laundering and then cited the need to develop technologies, and delivery channels (with some suggesting not only ATMs, but pre-paid cards and use of the Internet) in order ‘to harness’ workers’ remittances. In some cases, those presenting their ‘research’ to the symposium found it necessary to display a disclaimer stating that their company ‘does and seeks to do business with companies covered in its research report [and] as a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report’. The big business aspect of many of the presenters was displayed particularly clearly when Western Union boasted that it already had an ‘unmatched global network’ that included 5,600 locations in Citibank branches, 4,300 in Wal-Mart stores, 11,400 Fedex outlets, and no fewer than 30,000 outlets situated in McDonald’s restaurants. Representatives from this same company also took time to lament that the market for global remittances was fragmented and immature. It offered scope for further development. [50]
The attitude of international financial institutions to shaping and ‘enhancing the efficiency of overseas workers’ remittances’ is in considerable contrast with others who have focused principally on a range of social issues related to these remittances.
Included among the institutions commenting on and attempting to influence the ever-increasing flow of worker remittances is the IMF. Its focus, however, differs from the concerns expressed by big business and those outlined by academics, social commentators and NGOs, who are advising that funds be spent in a manner that provides long-term benefits for the recipient society. IMF administrators are concerned that ‘the compensatory nature of remittances presents a moral hazard, or dependency syndrome’ and that this might impede economic growth. They argue that developing country residents’ participation in productive endeavours might be reduced and it is on the basis of this concern that they are urging developing-country governments ‘to come up with policies that will induce migrants to invest productively’. [51]
Yet another group of researchers who have been drawn into the forum shaping and regulating international remittances (including a number employed by the ADB) argue that developing-country governments whose workers are employed overseas should upgrade the quality of preparatory education, provide special skills training, identify new overseas labour markets and negotiate with host governments for the proper accreditation of their workers. These researchers have also noted that sending workers overseas who then remit funds to their families and communities at home might go some way to ‘compensate for the losses that a sending country might incur from brain drain or the skimming of its highly skilled workers’. [52] This is the view that is currently reflected in Australian government plans and pronouncements in relation to remittances and overseas workers from the Pacific region. Claiming an ‘important new direction for the aid program’, Australian Prime Minister, John Howard, has announced the establishment of a Australia-Pacific Technical College. Noting that ‘currently, workplace competencies in the Pacific often fall short of [Australian] industry requirements’, Howard said that ‘the college concept is aimed at increasing the number of skilled Pacific Island graduates as well as the quality of their training’. A detailed design of the college was scheduled to be presented to the Pacific Islands Forum meeting held in October 2006. [53]
The Australian Government’s skills-based approach to hosting overseas workers might well be comforting for Pacific Island governments when they consider the longer-term benefits of exporting their citizen workers. This is because it comes with the assurance that at least a portion of the human capital generated through this form of post-secondary education will be available for domestic purposes together with recognition of the obvious point that the wages (and therefore the expected remittances) of skilled workers are higher than those of unskilled and semi-skilled workers. However, it will not provide immediate employment and income for the workers who are already knocking at Australia’s door. On the other hand, unless the workers of a sending country have access to skills acquisition (either by the relatively widespread provision of appropriate education through investment by aid providers or through the willingness and ability of domestic governments to harness income remittance monies for the purpose of educating workers), the present disadvantage in the international division of labour will be cemented ever more firmly into place.