A Change of Guard

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Thursday, 16 June 2016

Remittances may worsen Kingdom's wealth divide: study

A man receives money from a Wing agent after concluding a transaction at a Phnom Penh branch yesterday afternoon.
A man receives money from a Wing agent after concluding a transaction at a Phnom Penh branch yesterday afternoon. Hong Menea

Remittances may worsen Kingdom's wealth divide: study
Thu, 16 June 2016 ppp
Jack Davies

Phnom Penh’s population nearly doubled in the first decade of the 21st century, in large part thanks to workers streaming into the capital in hopes of sending money back home to their families in the provinces.

While such remittances are frequently cited as a key contributor to rural development, a study released last week suggests that this remittance culture may in fact be exacerbating Cambodia’s already dramatic wealth divide.

Published in Migration Studies, Dr Laurie Parsons’ Mobile inequality: Remittances and social network centrality in Cambodian migrant livelihoods examines the burden that sending remittances home had on migrant labourer communities living on Phnom Penh’s periphery.

Parsons found that the prospects of labourers from poorer homes were significantly lower than their peers, as they were expected to send home larger remittances to support their families.

From a sample of 50 migrant labourers, Parsons found the mean monthly salary was $131, with average monthly remittances at $42 a month. However, he also found remittances demanded by relatives back home can frequently be much higher.

“Every month I can send only $70 or $80, which isn’t enough for the people back home,” one respondent told researchers.

Parsons found that migrants who sent home more than 10 per cent of their income each month were unlikely to “achieve urban advancement”, which he defined as having notably improved their income or moved into a more “prestigious” job.

Meanwhile, remittances in Cambodia are big business. Franchette Cardona, marketing director of Wing, one of Cambodia’s largest money transfer providers, said in an email yesterday that Wing alone facilitates the transfer of roughly $2 billion from Phnom Penh to the provinces each year.

Dr Chivoin Peou, a Cambodian sociologist who has examined rural-urban migration, said yesterday that while he did not see the remittance economy as exacerbating inequality, there is nonetheless a divide among those who move to the capital.

“Those who are under the pressure to come to the city, they come because their family is in debt, so whatever they earn is to pay off the debt, and that gives them quite a bleak prospect in terms of what their future holds because everything they earn goes to pay off the debt,” he said. “But those who come with no debt pressure have more freedom with what to do because they have money.”

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