Myanmar’s cash-strapped regime is now demanding that expatriate workers remit at least 25 percent of their foreign currency income back home through the country’s banking system. CB Bank, one of the country’s largest private banks, recently told migrant workers they must remit a quarter of their salaries either monthly or every three months through official channels.
Migrant workers who do not comply will be barred from working overseas for three years after their current work permit expires, the announcement warns.
Labor rights activists described the move as exploitation of migrant workers.
While the measure will supply the regime with a source of much-needed hard currency, expatriate workers and their families will suffer as the remittances will be converted at the official exchange rate of just 2,100 kyats per US dollar while the market rate is far higher at 3,400 kyats.
The new remittance regulation, which took effect on September 1, requires migrants who are due to leave Myanmar for overseas jobs to open a joint account at a bank regulated by the Central Bank of Myanmar, and remit 25 percent of their earnings to that account.
Thai Labour Ministry data show nearly 2 million Myanmar migrants were working legally in Thailand last year. This means millions of baht will flow into junta coffers if the remittance requirement is strictly enforced.
While the junta’s reference exchange rate is just 56 kyats to the baht, the market rate is around 100 kyats per baht.
So, a Myanmar migrant who earns 20,000 baht per month will have to remit 5,000 baht through the junta’s banking system. The regime will get 5,000 baht for just 300,000 kyats while unlicensed Hundi exchange operators will pay nearly 500,000 kyats for the same amount.
The regime now requires recruitment agencies to revise their contracts with migrant workers and to be responsible for transferring the 25 percent remittance through the country’s banking system.
The junta’s Labor Ministry is also offering tax incentives, saying that those who remit through the official banking system or financial service providers licensed by the central bank can make investments and buy property in Myanmar tax-free.
U Aung Kyaw, spokesman of the Thailand-based Labor Rights Foundation, said: “This is unacceptable unless migrants are willing to do so. We are concerned that [the regime] might change the exchange rate or steal the money. Many migrant workers have criticized the move.”
Due to historically stringent banking and exchange controls coupled with a lack international financial services, Myanmar migrants have traditionally used Hundi, an informal value transfer system, to send money back home.
Ko Nay Lin Thu from the Thailand-based Aid Alliance Committee (AAC) said: “We don’t want to give our hard-earned money to them. We have to pay tax on our income in Thailand, and our remittances will be cut now, which is unacceptable. This is an exploitation of us migrant workers.”
The remittance requirement is bound to affect Myanmar migrant workers working in Thailand under the memorandum of understanding between the two governments. It is not yet clear how the regime will enforce the new requirement on migrant workers who hold the pink card that allows them to work in Thailand.
“[The junta] ignores us when we are denied labor rights or exploited in foreign countries, but they want to exploit our earnings,” a migrant worker working in Thailand told The Irrawaddy. “It is not okay for us to forfeit the money we earn, and for the regime to give it back at whatever rate it wants.”
It is estimated that there are as many as five million licensed and unlicensed Myanmar migrant workers in Thailand. Some 400,000 licensed migrant workers have left Myanmar over the past two years since the coup.
The shadow civilian National Unity Government has responded to the new rule by urging Myanmar migrants not to transmit salary through the regime’s banking system, explaining the money will only fund the junta’s terror campaign against its own civilians.