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Lifeline dollars made in Japan
By Suvendrini Kakuchi

TOKYO - Remittances sent home by tens of thousands of foreign workers, both undocumented and legit, have made Japan a leading source of foreign exchange for developing countries - surpassing even Tokyo's foreign aid budget.

"Foreign workers from poor countries earn much more in Japan than in other countries that have migrant labor. As a result, remittances from these workers are becoming very important for those governments," said Takashi Kadokura, senior economist at Dai-ichi-Life Research Institute, a think-tank affiliated with Japan's second-largest insurance company, Dai-ichi Mutual Life Insurance.

According to estimates, foreign workers send home more than 900 billion yen (US$8.16 billion) annually - a lifesaver for their poor families back home. Kadokura, who is investigating Japan's underground economy, says at the top of the remittance list are Chinese, Filipinos, Thais and South Koreans.

Last year, Japanese authorities estimated that there were 250,000 illegal workers in the country, many of them Bangladeshis, Pakistanis, Burmese and Sri Lankans. While actual figures are hard to come by given that most workers are undocumented, Kadokura says Chinese, Koreans and Filipinos send home 608.2 billion yen ($5.50 billion) annually.

In a report released last October, Kadokura found that Filipino workers in Japan sent home $413 million in 2003 and were the Philippines' third-largest source of remittances after Filipino workers in the United States and Saudi Arabia. "Remittances from overseas workers hover at the top of the list of foreign earnings that support the Philippine economy. Thus remittances from here have raised the profile of migrating to Japan," he says.

According to Kadokura, Chinese workers - Japan's largest migrant population - send home around $5.5 billion annually. Much of this is undeclared for taxation purposes and sent back to China through illegal means, as many workers don't have legal visas. Chinese and other nationals operating small businesses such as retail shops in Japan also offer services to illegal workers who need to send money home, Kadokura adds.

Latin American and Caribbean nationals, who are legally accepted in Japan if they are descendants of Japanese who migrated to the region in the 1930s, are also a major source of foreign income for their countries. Brazil received $2.5 billion last year from remittances of its citizens in Japan.

Aid officials have come to view remittances as an important development tool. Japan is the world's second-largest foreign aid donor after the United States. In the fiscal period ending on March 31, the country dispensed $7.82 billion in official development aid. By many estimates, foreign workers in Japan annually remit more than that to their home countries. "This is money that goes directly into the pockets of poor people," Enrique Iglesias, president of the Inter-American Development Bank, said on a recent trip to Tokyo.

Japan's most influential business lobby, Japan Business Federation (Nippon Keidanren), is urging the government to conclude with its Asian neighbors bilateral trade agreements that recognize the country's need to open its doors to skilled foreign workers. The Keidanren has been pressing Japan to conclude agreements with the Philippines, Malaysia and Thailand - all Association of Southeast Asian Nations (ASEAN) members - as well as South Korea.

"There needs to be a common foundation for free economic activity without restrictions and regulations," Kiyoaki Shimagami, head of a Keidanren task force, said at a recent symposium.

While illegal immigrants are attracted to the underground banks because they cannot usually open legitimate bank accounts, legal foreign workers in Japan - especially those from Peru - are able to use the services of Convenio Kyodai Japon, one of the country's few banks that operates officially to send remittances to Latin America.

Japan has 52,000 registered Peruvian workers, the fifth-largest community of migrant workers in the country. Yukiko Horiuchi, a spokesperson for the bank, says it has 40,000 Peruvian clients who send back 30-40% of their salaries. "Our services are well sought after by Peruvians because our commission is half that charged by other Japanese banks," said Horiuchi. "We also speak the same language."

Kyodai, which means "relatives" in Japanese, started out as a shop selling Peruvian groceries and expanded as migrants grew. With Japan enforcing stricter rules on foreign workers, Kyodai can only cater to Peruvians working officially in Japan.

Says senior economist Kadokura, "The Japanese government should make foreign workers work legally and use their remittances as an important way of promoting better economic and friendly relations with their countries."

(Inter Press Service)

Sep 11, 2004


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