VZCZCXRO0839
PP RUEHCN RUEHDT RUEHHM
DE RUEHCHI #0097/01 1750959
ZNR UUUUU ZZH
P 230959Z JUN 08
FM AMCONSUL CHIANG MAI
TO RUEHC/SECSTATE WASHDC PRIORITY 0788
INFO RUEHC/DEPT OF LABOR WASHINGTON DC
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHCHI/AMCONSUL CHIANG MAI 0851

UNCLAS SECTION 01 OF 04 CHIANG MAI 000097 
 
SIPDIS 
 
G/TIP 
DEPARTMENT OF LABOR FOR ILAB 
USAID DCHA - DOROTHY TAFT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PREL PHUM EAID EIND ELAB ETRD TH BM
SUBJECT: REMITTANCES FROM THAILAND LIFT INCOMES IN BURMA 
 
REF: 2008 CHIANG MAI 96: "AFTER NARGIS, A BORDER TRADE BOOM IN THAILAND'S FAVOR" 
 
CHIANG MAI 00000097  001.2 OF 004 
 
 
Sensitive But Unclassified 
 
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Summary 
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¶1. (SBU) Remittances transferred from the one-to-two million 
Burmese migrant workers in Thailand are an important source of 
income for their families in Burma.  With migrant workers 
transferring about half of their incomes to their relatives in 
Burma, anywhere from $375 million to $1 billion could be flowing 
from Thailand to Burma annually in remittances alone.  Because 
"carriers" transfer money or goods by hand into Burma, some 
experts believe these remittances have a significant impact not 
only on Burma's GDP but also on bilateral trade flows and the 
macroeconomic stability of the Burmese kyat.  However, earning 
these remittances comes at a cost for Burmese migrants, who 
generally face weak labor rights and poor living conditions in 
Thailand.  Nonetheless, these migrant laborers continue to 
struggle to support their families in Burma, illustrating that 
this dispersed population abroad is really an interconnected 
network that has potential beyond the transfer of money to 
include the transfer of ideas.  End summary. 
 
------------------------- 
Burmese Labor in Thailand 
------------------------- 
 
¶2. (SBU) From government tyranny to absolute poverty, Burma 
offers no lack of push factors for its people to flee their 
homeland in search of something better.  In neighboring 
Thailand, robust manufacturing and agricultural sectors eager 
for cheap labor provide the pull factors abroad.  The result is 
an estimated one-to-two million Burmese laborers scattered 
across Thailand but centralized in three places: the western 
border town of Mae Sot, the seafood processing Gulf region south 
of Bangkok, and Thailand's manufacturing hub in Bangkok itself. 
Leaving their hometowns in search of work, these laborers are 
usually young, single people who have volunteered to move abroad 
with one objective: earn money to support their families in 
Burma. 
 
¶3. (SBU) From poor working conditions to costly money transfer 
schemes, Burmese laborers in Thailand face many challenges in 
trying to remit money to their families.  However, their 
earnings here still manage to find their way home, helping to 
lift the direly low incomes of their relatives in Burma. 
Moreover, with so many Burmese working across Thailand, these 
remittances appear to add up, having a significant impact not 
only on individual families, but also on the Burmese economy 
overall.  Some experts even speculate that these remittances 
play a key role in explaining Thai-Burmese trade patterns as 
well as the macroeconomic stability of the Burmese kyat. 
 
-------------------- 
Remittances to Burma 
-------------------- 
 
¶4. (SBU) A survey of Burmese laborers and labor organizations in 
Mae Sot during a June 11-13 trip there by Consulate officials 
revealed potentially significant levels of remittances from 
Thailand, despite relatively low earnings.  Manufacturing 
workers in Mae Sot usually earn wages one of two ways -- either 
hourly wages or earnings based on output -- although both are 
subject to Thai minimum wage laws.  In both cases, Burmese 
laborers in Mae Sot reported that daily earnings at most local 
knitting and garment factories are about 85 baht (or $2.60).  In 
contrast, the minimum daily wage in Mae Sot is 151 baht ($4.60). 
 The $2 difference between the actual average daily wage and the 
minimum wage is reportedly justified by other benefits that the 
companies provide workers, including room and board (see para 
13).  Some workers who have resided longer in Thailand, remained 
loyal to a specific company, and have been promoted can earn as 
much as $10 per day, though this is rare in Mae Sot where most 
supervisory positions are filled by Thai staff. 
 
¶5. (SBU) Surveys among Mae Sot-based workers revealed that the 
range of monthly remittances from one worker to Burma was from 
500 to 2000 baht ($15 to $60); however, most workers and labor 
groups reported that the average remittance falls around 1,200 
baht ($36) monthly.  The highest remittance we heard was from a 
Burmese female in a supervisory position who could afford to 
send 5,500 baht ($170) per month to her family.  Overall, 
workers seemed to be able to afford to remit about half of their 
earnings to Burma using the other half for local consumption. 
 
¶6. (SBU) Labor groups reported that Mae Sot wages are lower than 
 
CHIANG MAI 00000097  002.2 OF 004 
 
 
Bangkok wages, where the minimum wage is 200 baht ($6) daily. 
Burmese laborers tend to enter Thailand via Mae Sot and 
eventually travel to Bangkok in search of better paid work.  As 
a result, only about 10% of Thailand's Burmese migrants reside 
in Mae Sot; most live and work in or around Bangkok or in the 
seafood processing zone in Samut Sakhon on the Gulf of Thailand. 
 Mae Sot-based labor groups said that the longer distance 
between Bangkok and Rangoon does not lessen the likelihood of 
these laborers remitting wages to Burma.  On the contrary, they 
estimated that with higher wages, these laborers should be 
remitting more to Burma than the relatively poorer Mae Sot 
workers. 
 
¶7. (SBU) Using the data we collected from migrant sources and 
labor groups, post estimates that annual aggregate remittances 
to Burma from Thailand range from a low of $375 million to a 
high of $1.125 billion.  See data annex in para 20 for 
additional detail. 
 
¶8. (SBU) The range of $375 million to $1.125 billion in 
estimated yearly remittances to Burma from Thailand is 
significant for bilateral trade, according to an advisor from 
Tak province's Chamber of Commerce.  The advisor noted that the 
value of goods exported to Burma through Mae Sot yearly is about 
$365 million, almost the same level as the (low-end estimate of) 
remittances (reftel).  Because carrying goods across the border 
into Burma is a key element in the remittance process (see para 
9), this advisor believes that the vast majority of Thai exports 
through Mae Sot corresponds directly to the increased purchasing 
power in Burma provided by remittances. 
 
-------------------- 
The "Carrier" System 
-------------------- 
 
¶9. (SBU) The system of transmitting money into Burma is costly, 
risky, and low-tech.  Most Mae Sot migrant workers hire carriers 
to transfer their money to Burma.  They described the system as 
follows:  A worker will bring his remittance in Thai baht to a 
merchant in Mae Sot advertised as a "money changer."  This 
merchant will contact a partnering merchant in Burma, usually 
located near the family's village, and notify the family that it 
can pick up the remittance, which is paid out in Burmese kyat. 
To transfer the money between the two merchants, a Burmese 
"carrier" will carry the money (or goods of equal value) from 
the Thai merchant to the Burmese merchant.  The remittance is 
charged approximately 5-7% commission for each merchant, such 
that an original remittance of $30 is reduced to about $26 once 
it reaches the family.  An advisor to the Tak Chamber of 
Commerce told us that he believes this informal trading system 
which also serves as a currency exchange is critical for 
maintaining the stability of the Burmese kyat. 
 
¶10. (SBU) For workers based in Bangkok or elsewhere in Thailand, 
the system has an additional step:  transferring the funds to 
Mae Sot via a Thai middleman.  A Burmese worker in Bangkok will 
connect with a local Thai who will agree to accept his money and 
deposit it in a Thai bank account.  A partnering Thai middleman 
in Mae Sot will withdraw the funds and take them to one of the 
"money changer" merchants in Mae Sot to complete the rest of the 
carrier cycle.  In this case, a third commission is charged for 
the middleman.  The large population of Burmese migrant workers 
in Bangkok, therefore, becomes evident in Mae Sot by the herds 
of young Thais loitering around ATMs on their cell phones 
waiting for their next transaction. 
 
------------------------------ 
Remitting from Beyond Thailand 
------------------------------ 
 
¶11. (SBU) The network of Burmese migrants remitting money to 
Burma extends beyond Thailand to Malaysia, Singapore, Indonesia, 
and the U.S.  Without any banking links with Burma, U.S.-based 
and other overseas Burmese migrants will remit money through Mae 
Sot as well.  A sign in Burmese at the Siam Commercial Bank 
(SCB) branch in Mae Sot advertises pick-up hours for a service 
known as MoneyGrams.  The service allows individuals overseas, 
though most are in the U.S., to transmit money to someone in Mae 
Sot through the SCB for a small fee. 
 
¶12. (SBU) Because most regular SCB costumers do not use the 
service, the staff believe that the large majority of the 
senders and recipients are Burmese.  Because the recipient must 
show a valid ID, yet another market of Thai middlemen exists to 
collect the money on behalf of unregistered Burmese migrants. 
The SCB reported that about 25 MoneyGrams are received per day 
each valuing $100 to $200.  Through this bank branch alone, that 
equates to about $600,000 to $1.2 million yearly in money 
 
CHIANG MAI 00000097  003.2 OF 004 
 
 
transfers from outside Thailand, likely being remitted to Burma. 
 
----------------------------- 
Labor Rights and Registration 
----------------------------- 
 
¶13. (SBU) All of these remittances to Burma via Mae Sot come at 
a heavy cost, however.  Burmese workers in Thailand face 
unsatisfactory labor rights, poor working and living conditions, 
and unstable income.  Two Burmese laborers from the Thaipop 
Knitting factory in Mae Sot told us that their wages are based 
on output, a common practice among the knitting factories.  Each 
worker is paid 170 baht ($5.15) for every 12 sweaters produced. 
The workers said it takes 16 hours to produce 12 sweaters, such 
that their hourly wage is about $0.31.  Based on an eight-hour 
work day, this is about $2 less per day than the minimum wage in 
Mae Sot, which Thaipop justifies by providing quarters, rice, 
water, and electricity to the workers.  The workers insisted 
that the value of these basic in-kind reimbursements could not 
possibly equal the $2 given up in wages.  They said that 
pleading for the extra $2 per day in cash instead of in kind 
would be unwise since they could not find another place to stay 
and would likely be fired from their job for making the request. 
 
¶14. (SBU) A Burmese laborer from another knitting factory 
reported that she also earned the estimated $0.31 per hour based 
on 12 sweaters produced over 16 hours.  Employees at her factory 
tend to work 13 hours per day totaling 3,500 baht ($106) per 
month.  Workers are required to sign an agreement that the 
difference of $58 per month between their cash wages and the 
minimum wage is covered by their room and board.  This female 
worker reported that the housing for single females is a large 
room shared by 30 people, each with enough space for a sleeping 
mat and a few personal belongings.  For those with spouses, the 
quarters are inadequately small for more than one person.  The 
company bars children from staying in the quarters. 
 
¶15. (SBU) One way for workers to improve their quality of life 
in Mae Sot is through registration with the Thai authorities. 
Registration, which costs 3,800 baht ($115) provides workers 
with very affordable health care and certain rights and 
privileges such as freedom of mobility outside of the factory 
compound.  Unfortunately, registration is becoming an 
increasingly difficult task.  Labor groups reported, and the 
Federation of Thai Industries confirmed, that a recent change in 
Thai regulations stipulates that new hires are not eligible to 
register.  This includes laborers who were registered while 
employed by a company, resigned, and moved to another company. 
These workers lose their registration status and cannot reapply. 
 
 
¶16. (SBU) Moreover, labor groups said that companies tend to 
allow only about half of their Burmese staff to register 
threatening the others with being sacked.  By keeping some staff 
unregistered, the company maintains greater control over 
workers' mobility and their dependence on the employer.  The 
Federation of Thai Industries of Tak province denied that any of 
its member companies have unregistered workers, but admitted 
that some companies will fill empty jobs temporarily with 
unregistered workers. 
 
¶17. (SBU) The Burmese workers from these two knitting factories 
all said that despite the challenges in low wages, few labor 
rights, and poor working conditions, living in Mae Sot still 
pays off.  One of the male Thaipop factory workers said that he 
will continue to struggle to support his family until he can 
return to a Burma that has jobs and democracy.  He said he hopes 
for the day he can fight for labor rights in his own country. 
The female worker from the other knitting factory said that 
supporting her family members who recently lost their homes in 
cyclone Nargis is the only real incentive for her to live and 
work in Mae Sot. 
 
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Comment 
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¶18. (SBU) The high level and impact of Burmese remittances from 
Thailand are promising signs that, though this population of an 
estimated one-to-two million is scattered across Thailand, it 
maintains a significant and well-connected network with families 
on the ground in Burma.  In addition to raising incomes inside 
Burma, these migrant workers provide the life support necessary 
to keep their families hopeful for a better economic future. 
Moreover, this network, though highly informal and potentially 
fragile, may be a resource for transferring democratic ideals as 
well as money into Burma. 
 
 
CHIANG MAI 00000097  004.2 OF 004 
 
 
¶19. (U) This cable was coordinated with Embassies Bangkok and 
Rangoon. 
 
---------- 
Data Annex 
---------- 
 
¶20.  (SBU) Based on estimates of Burmese migrant populations and 
their remittances to Burma from laborers and labor groups in Mae 
Sot, post made the following estimates of aggregate remittances: 
 
(1) Remittances from Burmese Manufacturing Workers in Mae Sot: 
 
-- Population: 60,000 to 80,000 Burmese workers 
 
-- Estimated Yearly Remittances: $22.5 to $45.0 million 
 
-- Percentage of Burma's GDP: 0.16 to 0.33 percent 
 
(2) Remittances from Burmese Workers in All Sectors in Mae Sot: 
 
-- Population: 100,000 to 150,000 Burmese workers 
 
-- Estimated Yearly Remittances: $37.5 to $84.38 million 
 
-- Percentage of Burma's GDP: 0.27 to 0.62 percent 
 
(3) Remittances from Burmese Workers in All Sectors Across 
Thailand: 
 
-- Population: 1 million to 2 million Burmese workers 
 
-- Estimated Yearly Remittances: $375 million to $1.125 billion 
 
-- Percentage of Burma's GDP: 2.74 to 8.21 percent 
 
Note: Gross Domestic Product of Burma is $13.7 billion (Burma 
Country Notes).  Low estimate applies a remittance value of 
1,000 baht ($30.30) per month; high estimate applies a 
remittance value of 1,500 baht ($45.45) per month. 
MORROW