Cambodia’s remittance payments reach $1.4B
Funds repatriated by Cambodian migrant workers continued to rise, totalling $1.4 billion last year – an increase of 11 per cent compared to 2017 – figures from the National Bank of Cambodia (NBC) revealed.
NBC’s balance of payments, which record personal transfers by migrant workers to their households back home via financial institutions, showed that Thailand and South Korea were the two largest origins.
They accounted for 68 per cent and 21.5 per cent respectively of total remittances. The money Cambodian workers sent from Japan accounted for 3.3 per cent, while that from Malaysia was 2.5 per cent.
The true of cross-border remittance flows should be much higher as migrant workers – especially those in neighbouring Thailand – often send money back through informal channels.
Independent business researcher and consultant Ngeth Chou said on Monday that the increasing value of remittances reflects the rise in outflow of Cambodians who are seeking work abroad, especially in Thailand and South Korea, due to ample facilitation from Cambodian authorities.
“In the short term, the increasing remittance helps Cambodian rural people improve their family [finances] as now they are less likely to depend on agriculture alone as a source of income,” Chou said.
However, he said a huge outflow of Cambodian migrant workers is not good for the economy in the long run. He said this is because the Kingdom would be unable to obtain optimal benefit from its own labour.
“Cambodian workers are directly helping other countries grow their economies by working in the fields, which their locals don’t want to do. This also enables locals in other countries to work at higher paying jobs."
“We have resources, but we are not able to use them properly. We had better find another strategy to employ our workforce more efficiently and upgrade their skills in order to accelerate economic growth,” he said.
Chou said the increasing remittance figures could be attributed to a surge in options in the formal sector to send money home, as financial institutions keep closer tabs on cross-border transactions.
There is no research clearly detailing how the remittances are used in Cambodia. However, media reports say the money sent from migrant workers abroad is an important source of capital for Cambodian families that receive them and are used for daily expenses, family investments and loan repayments.
More than one million Cambodians migrant workers were working in Thailand at the end of last year. Some 54,000 Cambodian workers are in South Korea, government data revealed.
South Korea is perceived to be a popular destination for Cambodians.
Im Dara, a farmer in Kandal province whose younger brother is working in South Korea, said on Monday that the money sent home helped improve living conditions for their parents.
Dara said his brother earns a monthly wage of about $1,500 from his job in the agricultural sector and regularly sends money home to help with some of their parents’ expenses.
“With the money sent from my brother, my parents can afford to build a new house and have enough money left over for their daily expenses,” he said.
He added that having his brother working abroad relieves the family of financial risk and is preferable to having the family depend on farming at home.
“My brother can save some money from work and we hope that he will be able to begin a family when he comes back in the future.”