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Myanmar Junta Demands Workers Abroad Remit 25% of Their Wages into State Bank

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Myanmar workers foreign currency income back home

According to local reports, Myanmar’s military junta is demanding citizens working abroad to remit at least 25% of their foreign currency income through the country’s state banking system.

The cash-strapped government of Myanmar is now requiring expatriate labourers to remit at least 25 percent of their foreign currency earnings through the country’s banking system. One of the country’s largest private banks, CB Bank, recently informed migrant employees that they must remit a quarter of their monthly or quarterly wages through official channels.

The announcement warns that migrant employees who do not comply will be prohibited from working abroad for three years after their current work permit expires.

Migrant worker exploitation, according to labour rights activists.

While the measure will provide the regime with a much-needed source of hard currency, expatriate employees and their families will suffer because remittances will be converted at the official exchange rate of 2,100 kyats per U.S. dollar, whereas the market rate is significantly higher at 3,500 kyats.

The new remittance regulation, which went into effect on September 1, requires migrants leaving Myanmar for overseas employment to establish a joint account at a bank supervised by the Central Bank of Myanmar and transfer 25% of their earnings to that account.

According to data from the Thai Labour Ministry, nearly 2 million Myanmar migrants worked legally in Thailand last year. This means millions of baht will trickle into junta coffers if the remittance requirement is strictly enforced.

Myanmar money exchange

In contrast to the junta’s reference exchange rate of 56 kyats per baht, the market exchange rate is approximately 100 kyats per baht.

Therefore, a migrant from Myanmar earning 20,000 baht per month must remit 5,000 baht through the junta’s banking system. The regime will receive 5,000 baht for only 300,000 kyats, while unlicensed Hundi exchange operators will pay nearly 500,000 kyats.

The regime now mandates that recruitment agencies revise their contracts with migrant employees and transfer the 25 percent remittance through the nation’s banking system.

The Labour Ministry of the junta is also offering tax incentives, stating that those who remit funds through the official banking system or financial service providers licenced by the central bank can make tax-free investments and purchases of real estate in Myanmar.

U Aung Kyaw, a representative of the Labour Rights Foundation in Thailand, stated, “This is unacceptable unless migrants are willing to do so.” We fear that [the regime] may alter the exchange rate or take the funds. Numerous migrant labourers have criticised the decision.”

Due to a lack of international financial services and historically stringent banking and exchange restrictions, Myanmar migrants have traditionally used Hundi, an informal value transfer system, to send money back home.

The Thailand-based Aid Alliance Committee’s (AAC) Ko Nay Lin Thu stated, “We don’t want to give them our hard-earned money. It is unacceptable that we must pay tax on our income in Thailand and that our remittances will be cut off. This is an instance of migrant labourer exploitation.”

Myanmar workers abroad

The remittance requirement is guaranteed to affect Myanmar migrant workers working in Thailand under the memorandum of understanding between the two governments. It is not yet obvious how the regime will implement the new requirement for migrant workers who possess the pink card, which permits them to work in Thailand.

“[The junta] ignores us when we are denied labour rights or exploited in foreign countries, but they want to exploit our earnings,” a Thai migrant worker told The Irrawaddy. “It is not acceptable for us to forfeit the money we earn and for the regime to return it at any rate it chooses.”

There are approximately five million licenced and unlicensed Myanmar migrant labourers in Thailand, according to estimates. Approximately 400 thousand licenced migrant workers have fled Myanmar since the coup two years ago.

The shadow civilian National Unity Government has responded to the new rule by urging Myanmar migrants not to send their wages through the regime’s banking system, stating that the money will be used to finance the junta’s terror campaign against its own citizens.

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