Gender Dimension of Remittances

GENDER DIMENSIONS OF
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REMITTANCES: A STUDY OF
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INDONESIAN DOMESTIC
WORKERS IN EAST AND
SOUTHEAST ASIA
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Gender Dimensions of
Remittances: A Study of
Indonesian Domestic
i
Workers in East and

Southeast Asia
UNIFEM East and Southeast Asia Regional Office

Bangkok, Thailand
Gender Dimensions of Remittances:
A Study of Indonesian Domestic Workers in East and Southeast Asia
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Gender Dimensions of Remittances: A Study of Indonesian Domestic Workers in East and Southeast Asia
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ISBN: 978-974-680-259-8
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ACKNOWLEDGEMENTS
This document would not have been possible without the guidance and contributions of Jean D’Cunha,
Masud Siddique, Chen Chen Lee, Deepa Bharathi, Elaine Pearson, Pantita Schaedla, Rachel Conejos,
Pattarawan Ucharatna, Marina Fe B. Durano, Fareeha Ibrahim from UNIFEM, Lian Kwen Fee, Habibul
Haque Khondker, Nicola Piper, Ika Malika (Indonesia), Harun (Tenaganita, Malaysia), AKM Ahsan Ullah
(City University of Hong Kong), Mhd Iqbal (National University of Malaysia), Aris Ananta (ISEAS, Singapore),
Riana Puspasari (National Project Coordinator for Migration Program, UNIFEM Indonesia), Maslina Abu Hassan
(Tenaganita, Malaysia), Devi Novianti (Domestic Helpers and Migrant Workers Programme, Hong Kong SAR),
Nurul Qoiriah (Asian Migrant Centre, Hong Kong SAR), Rahel Kunz, University of Lucerne, Noorashikin Abdul
Rahman (National University of Singapore), and S.H. Ningsih (Women Migrant Worker Program, World Bank
Jakarta). Special thanks also to Kelly Corner for her editorial assistance.
About the Author : Md Mizanur Rahman is currently a Research Fellow at the Department of Sociology,
National University of Singapore. Prior to this Dr Mizanur was a Postdoctoral Fellow at the Asia Research
Institute, NUS, Singapore. His main research interests concern labour migration, integration of new immigrants,
migration and development, migrant businesses, religious lives of the migrants, remittances, and migration
policy. His first book, In Quest of Golden Deer: Bangladeshi Transient Migrants Overseas, is a study of
international labour migration linking Bangladeshi migrant workers in Singapore and the families left behind
in Bangladesh. His work has appeared in reputed international journals including International Migration,
Asian Population Studies, Population, Space and Place. He is currently working on remittance-sending from iii
Southeast and the GCC countries funded by IOM South Asia (Dhaka).
iv
TABLE OF CONTENTS
page
LIST OF ABBREVIATIONS.............................................................................................................................. vii
PREFACE........................................................................................................................................................... ix
EXECUTIVE SUMMARY.................................................................................................................................. xi
1. INTRODUCTION................................................................................................................................................................................ 1
1.1 Feminisation of Labour Migration in Asia....................................................................................................................... 1
1.2 Migrant Remittances: a Development Tool................................................................................................................... 2
1.3 Engendering Remittances.............................................................................................................................................................. 3
1.4 Research Questions............................................................................................................................................................................ 4
1.5 Data Sources............................................................................................................................................................................................ 4
1.6 Limitations of the Research........................................................................................................................................................... 6
2. THE INDONESIAN LABOUR MIGRATION CONTEXT ........................................................................................................... 7

2.1 Indonesian Labour Migration within Asia: an Overview.............................................................................. 7
2.2 Remittance Flows to Indonesia................................................................................................................................................. 9
2.3 Channels and Costs of Remittance Transfers.............................................................................................................. 10
2.4 Remittance Services between Indonesia and East and Southeast Asia........................................... 11
v
3. REMITTANCE SENDING: SINGAPORE, MALAYSIA AND HONG KONG SAR........................................... 13
3.1 Socio-Demographic Profiles of Domestic Workers................................................................................................ 13
3.2 Incomes, Savings and Remittances...................................................................................................................................... 15
3.3 Channels of Remittances Used................................................................................................................................................. 17
3.4 Relationships with Financial Institutions............................................................................................................................. 18
3.5 Gender-Differentiated Patterns in Earnings, Savings and Remittances............................................... 19
4. REMITTANCE RECEIVING: INDONESIA.............................................................................................................................. 21

4.1 Socio-Demographic Profiles of Households................................................................................................................ 21
4.2 Remittance Recipients....................................................................................................................................................................... 22
4.3 Gender Differentiated Patterns in Remittance-Receiving.................................................................................. 23
5. USES AND DEVELOPMENT OUTCOMES........................................................................................................................... 25

5.1 Use of Remittances: Domestic Worker Perspective................................................................................................ 25
5.2 Use of Remittances: Household Perspective................................................................................................................ 26
5.3 Gender, Investment and Development............................................................................................................................ 26
5.4 Remittances and Family Dynamics in Indonesia....................................................................................................... 28
6. POLICY RECOMMENDATIONS................................................................................................................................................. 31
6.1 Reducing Transaction Fees of Remittances................................................................................................................... 31
6.2 Leveraging Remittances for Development..................................................................................................................... 33
REFERENCES................................................................................................................................................................................................. 37
TABLES
Table 3.1 Socio-Demographic Profiles of Domestic Workers...................................................................................... 14
Table 3.2 Earnings, Savings and Remittances from Singapore.................................................................................. 15
Table 3.3 Earnings, Savings and Remittances from Malaysia..................................................................................... 16
Table 3.4 Earnings, Savings and Remittances from Hong Kong SAR.................................................................... 16
Table 3.5 Channels of Remittances Used in Last Transfer................................................................................................ 17
Table 3.6 Channels of Remittances Ever Used During Stay in Host Countries.............................................. 17
Table 3.7 Relationships with Financial Institutions: Host Countries........................................................................... 18
Table 3.8 Relationships with Financial Institutions: Indonesia ....................................................................................... 19
Table 4.1 Socio-Demographic Profiles of the Migrant Family...................................................................................... 21
Table 4.2 Remittance-Receiving: Household Survey............................................................................................................. 22
Table 4.3 Remittance-Receiving: Domestic Worker Survey............................................................................................. 23
Table 5.1 Top Three Uses of Remittances According to Senders............................................................................. 25
Table 5.2 Family Members Pursuing Education: Domestic Worker Survey....................................................... 25
Table 5.3 Family Members Pursuing Education: Household Survey....................................................................... 25
Table 5.4 Top Three Uses of Remittances: Household Survey....................................................................................... 26
Table 5.5 Investment in Productive Assets...................................................................................................................................... 27
Table 5.6 Remittances and Family Dynamics: Domestic Worker Survey............................................................. 29
Table 5.7 Remittances and Family Dynamics: Household Survey............................................................................. 29
vi
List of Abbreviations
LIST OF ABBREVIATIONS
AMC Asian Migrant Centre (Hong Kong SAR)
AMN Asian Migration News (The Philippines)
APEC Asia-Pacific Economic Cooperation
ASEAN Association of Southeast Asian Nations
ATM Automated Teller Machine
AWARE Association of Women for Action and Research
BII Bank International Indonesia
BNI Bank Negara Indonesia
BNM Bank Negara Malaysia
BRI Bank Rakyat Indonesia
BSN Bank Simpanan Nasional
CARAM Asia Coordination of Action Research on AIDS and Mobility – Asia
DIIS Dansk Institut for Internationale Studier
DFID Department for International Development (UK)
DMT Department of Manpower and Transmigration
GCIM Global Commission on International Migration vii
GDP Gross Domestic Product
GNI Gross National Income
GNP Gross National Product
HK$ Hong Kong Dollar
HRW Human Rights Watch
IFAD International Fund for Agricultural and Development
ILO International Labour Organization
INSTRAW International Research and Training Institute for the Advancement of Women
(United Nations)
IMF International Monetary Fund
IOM International Organization for Migration
MG MoneyGram
MOM Ministry of Manpower
MTO Money Transfer Outfit
MTC Money Transfer Company
OECD Organization for Economic Cooperation and Development
SAR Special Administrative Region (Hong Kong)
RM Malaysian Ringgit
Rp Indonesian Rupiah
SMS Short Message Service
S$ Singapore Dollar
TWC2 Transient Workers Count Too
UN United Nations
UNDP United Nations Development Programme
UNIFEM United Nations Development Fund for Women
UNICEF United Nations Children’s Fund
UNFPA United Nations Population Fund
UNHCR United Nations High Commission for Refugees
WU Western Union
viii
Preface
PREFACE
The increase in international migration has resulted in massive cash flows to countries of origin. According to
ILO, the US$100 billion remitted annually by migrant workers is a larger sum than all overseas development
aid, and is second only to the value of global petroleum exports in international commodity trade. Migrant
remittances constitute about 10% of the GDP in countries like Sri Lanka and the Philippines, clearly establishing
migrants’ contribution to development.
While sex-disaggregated data on remittances is not widely available, studies in some countries show that
women contribute heftily by way of remittances to countries of origin. A study by Seddon, Adhikari and
Gurung in 2002 suggests that in Nepal 25% of the GDP comes from overseas remittances. Nepalese
women working abroad sent home 7.6 million rupees in 1997, 11% of the total 69 million rupees remitted.
This is substantial, considering women’s concentration in the informal sector in lower paid jobs than men.
These figures would also be higher if undocumented flows were considered.
Remittances have significant macro economic effects in several countries of origin, helping to cope with
trade deficits, reducing pressure on local currency, reducing external debt. Remittances are also invested in
the education and health of children and other family members and raise the average levels of income in
countries of origin through multiplier effects.
This publication explores gender differentiated practice in earnings, savings and remittances of Indonesian
ix
women domestic workers in Malaysia, Singapore and Hong Kong SAR. It examines the role of remittances in
the internal power dynamic of households and its potential for women’s empowerment within the household
and community. Finally the publication makes very concrete policy recommendations to promote women
migrants’ savings, gender sensitive safe, secure, convenient remittance modes, and possibilities for productive
investment of women migrant workers’ remittances.
It is a potent advocacy tool that draws the attention of governments, overseas employment service providers
and civil society at large to the hefty economic and social contribution that migrant workers, especially
women migrant workers make to both countries of origin and employment. This together with the fact that
women migrant workers are human beings with human rights calls for the promotion and protection of their
human rights.
Dr. Jean D’Cunha

Regional Programme Director
UNIFEM East and Southeast Asia
Regional Office Bangkok
x
Executive Summary
EXECUTIVE SUMMARY
International labour migration (i.e. migration for work) forms a large component of international migration both
in Asia and elsewhere in the world. Men have always worked beyond the national territory for economic
reasons; now women are choosing to do the same. More and more women are migrating independently to
realise their own aspirations and support their families or households. This ‘feminisation of labour migration’
is now a pervasive phenomenon, especially in Asia. In a number of developing countries in Asia, women
migrants outnumber men migrants.
The remittances generated by these labour migrants are of particular importance in developing countries.
Between 2001 and 2005, migrant remittance flows worldwide increased by 58 percent to reach about
US$232 billion. Of this, developing countries received the biggest share—about US$167 billion.
Gender impacts upon the amount of money remitted, the recipients of remittances, and the uses of remittances
on the development of the country of origin. However, the data on global remittances is gender-blind. As
a result, the impact of gender on the remittance process remains little understood.
While there has been a fundamental increase in research on gender and migration, remittances have not
been so thoroughly explored to date. There have been very few studies that even disaggregate remittances
by the sex of remitters and senders, let alone undertake a gendered analysis of remittances. This report
attempts to fill the gap by exploring gender dimensions of migrant remittances in Asia.
xi
Gender matters in the whole process of remittances. Therefore, any detailed study on gender and remittances
should see the remittances as a process and include three important points: the sending, the receiving, and
the use of remittances.
The available findings provide a fragmented picture of the gendered dimensions of remittances. For instance,
it is often stated that migrant men remit more money home than women. In parts of Asia, it is reported that for
female migrants, it is the mother or other female relative who usually receives and spends the remittances. It
is also often reported that women, when in control of remittances, channel them into better health, education
and nutrition for the family. However, there is little empirical research on the gender dimensions of remittances
which links both sending and receiving countries, especially in Asia.
This study examines the following issues in the context of Asia:

• gender differentiated patterns of earnings, savings and remitting practices;
• gender differentiated patterns among those receiving remittances in the country of origin;
• gender differentiated patterns in uses and development outcomes of remittances for families or
households and communities of origin;
• the role of remittances in the household’s internal dynamics; and
• maximising the development potential of remittances for the women migrants, their families and
communities of origin.
The study also explores the impact of women earning income and remitting it home on the households
themselves by examining:
• who decides where to use remittances;

• whose wishes are followed and futures are considered when the remittances are used; and
• whether migrant households have more respect for the women working abroad because of the
income earned.
These questions are explored by drawing on 60 interviews conducted with Indonesian domestic workers
in Singapore, Malaysia and Hong Kong SAR, and 40 interviews with households in Indonesia who have a
member working as a migrant domestic worker in one of these countries.
The number of Indonesian women migrating for work has clearly surpassed the number of men since the
mid-1980s. Despite this, Indonesia’s gender dimensions of remittances remains largely under-researched.
Therefore, a study on gender dimensions of remittances in Indonesia will not only lead to the creation of
new knowledge in the academic and policy domains but also drive future research.
The study addresses the authorised domestic workers (‘live-in’ migrant domestic workers) because this
group of female migrant workers is large in number in East and Southeast Asia. The research undertakes a
multi-site research strategy linking both ends—the senders and the recipients of remittances. The fieldwork
was conducted in Indonesia as well as three destination countries—Malaysia, Singapore and Hong Kong
SAR—that are significant in terms of the numbers of migrant domestic workers and resulting remittance flows
to Indonesia.
xii This research is a micro-level study. Although macro-level approaches to migration outcomes provide
information about national patterns and outcomes, they do not show what remittances mean for migrant
families. Micro-level approaches show the impacts of remittances on the family and local communities.
Understanding the micro-level impacts of remittances, and the underlying factors contributing to, or impeding
the development potential of remittances at the micro-level, can help policy makers to formulate and
implement policies and programmes to harness the development potential of remittances.
FINDINGS OF THE RESEARCH
Remittance Sending
The savings and remittances of female domestic workers are lower than those of male migrant workers in
the region under scrutiny. This report argues that this is a direct result of income disparity. Since male migrant
workers usually earn more, they can afford to save and remit more. On the other hand, women migrants
usually work in gendered niches which are often low-paid jobs. As a result, they often earn less than the
men migrant workers and their ability to remit is reduced.
This report argues that if the proportion of domestic workers’ earnings in relation to remittances is taken into
consideration, gender differentiated patterns in savings and remittances become much more prominent.
Despite women domestic workers’ low wages, they often turn out to be better savers than their male
counterparts, and by and large they send home a greater share of their earnings in remittances than men.
The study group of Indonesian domestic workers saved an average of 69 percent of their monthly income,
and had remitted an average of 1.8 times their monthly earnings in their last transfer.
Executive Summary
Despite the gender-unfriendly nature of formal remittance services and their higher transaction costs, the
sampled Indonesian domestic workers predominantly used formal remittance services for money transfers.
They had also maintained stronger relationships (in the form of bank accounts) with financial institutions in
their home country, rather than those in their host countries.
Remittance receiving
While this report documents a slight gendered pattern in remittance-receiving, the difference was not
significant. Fifty-four percent of recipients in both surveys were women and the remaining 46 percent of
recipients were men (n=100). These figures are consistent with the conventional assumption that the mother
or other female relative of a remitting female migrant tends to receive the remittances.
Uses and Development Outcomes

Identifying the uses of migrant remittances helps to show whether or not migration promotes development;
and if yes, what is the likely direction of this development for migrants, their families and communities.
In this survey, the domestic workers in all three countries ranked education as the most important use for
remittances. Basic consumption was ranked second highest by domestic workers from Singapore and
Malaysia, and third highest by those in Hong Kong SAR, where savings were ranked second. Domestic
workers from Malaysia, ranked house construction third highest, probably due to the presence of higher
percentages of married domestic workers in Malaysia.
In the household survey, house construction was ranked as the most important use for remittances. Basic xiii
consumption was ranked second highest and savings were ranked third highest. Although these uses of
remittances differ in ranking from the findings of the domestic worker surveys in Singapore, Malaysia and
Hong Kong SAR, they all are found among the top three uses of remittances in these surveys.
The report has highlighted the importance of investment in the debate on migration and development and
argued that there is a need to employ a broader definition of investment that covers investment in both
physical and human capital. This is particularly important in the context of current emphasis of development
policy which is firmly on poverty alleviation and the achievement of the Millennium Development Goals.
The report documents that remittances are mostly used for human and physical capital improvement, which
can have far-reaching development implications for migrant households in particular and communities and
country in general.
The report also explored the impact of remittances and family relations. In the domestic worker survey,
two-thirds of respondents across the three countries reported that they decided how remittances would be
managed back home. In contrast, in the household survey only half the recipients of remittances reported
following the wishes of the domestic worker all, some or most of the time. Thus, despite being the earners
and senders of the remittances, domestic workers do not have exclusive control over the management of
these funds.
Although the experience of women migrants was mixed, female recipients of remittances tended to report
that their influence on family decision-making had increased. Access to remittances and, more importantly,
the power to manage them in a situation of scarce family resources can improve women’s ability to express
and exercise their choices, although this often benefits female recipients more than the domestic workers
themselves. In this way, remittances contribute to the improvement of status of women in migrant families
or households. However, more in-depth research is needed on the power and authority structure in the
migrant households.
POLICY RECOMMENDATIONS
In order to harness the development potential of remittances, the report recommends interventions in two
interrelated policy domains: (i) reducing transaction fees of remittances, and (ii) leveraging remittances for
development. Although discussed in the context of Indonesia, many of the proposals would be relevant to
other countries which have large outflows of women migrants.
Reducing Transaction Fees of Remittances

In Indonesia, the number of players in the formal remittance market is limited because Indonesian financial
regulations do not allow telecommunication companies, microfinance institutions, and money changers to
engage effectively in money transfer activities. Door-to-door delivery, debit cards, or other technologically
advanced services such as mobile-to-mobile transfer and card-based remittances hardly exist. The main
services offered are bank-to-bank and cash pickup. This report argues that the single most important factor
in reducing transaction costs is opening the remittance markets for competition, and suggests the expansion
of domestic remittance markets, especially disbursement posts; opening the remittance market to external
players; and the adoption of gender-friendly new remittance technologies.
xiv In particular, Indonesia should consider introducing mobile-to-mobile remittance transfers and prepaid
card-based remittance transfers. Both are cheap, fast and gender-friendly new technologies. Given that
domestic workers usually enjoy limited physical mobility outside their domestic spheres, and their relatively
low salary is not conducive to remitting funds every month, these two remittance methods have potential
not only to reduce the fees for remittance transfers but also to make remittance transfers convenient and
fast for remitters and recipients of remittances across the gender lines. ASEAN could be used as a platform
to implement card-based remittance transfers at the regional level.
Leveraging Remittances for Development

If appropriate gender-sensitive policies and programmes are pursued, remittances can bring new
opportunities for a better life and greater gender equality, for those migrating and those left behind.
Acknowledging the private nature of the remittances and recognising that excessive intervention may risk
destroying the benefits of remittances, this report suggests a gender-sensitive and incentive-based ‘light-
handed’ approach covering four areas: (i) specific programmes, (ii) financial intermediation (e.g. financial
products such as saving packages, certificates of deposits, medical insurance, life insurance, housing loans,
and small business loans), (iii) credit card-based remittances and (iv) promotion of NGO-based development
activities at the migrant source villages.
Introduction
1. INTRODUCTION
1.1 Feminisation of Labour Migration in Asia
In the current phase of globalisation, international migration is a persistent phenomenon that affects an
increasing number of people, families or households and communities in both developed and developing
countries. Between 1960 and 2005 the number of international migrants in the world more than doubled,
from an estimated 75 million in 1960 to almost 191 million in 2005 (United Nations, 2006). In 2005,
international migrants constituted nearly 3 percent of the world’s population, up from 2.9 percent in 1990
(United Nations, 2006).
International labour migration (i.e. migration for work) forms a large component of international migration,
both in Asia and elsewhere in the world. The primary motivation for such migration is often economic. In this
type of labour migration migrants are not allowed to settle in destination countries for the long-term, thus
families commonly live under ‘transnationally split’ conditions, with the non-migrating family or household
members ‘left behind’ (Piper 2006b; Yeoh et al. 2002).
Men have always worked beyond the national territory for economic reasons; ‘now women are choosing
to do the same’ (Oishi, 2005). More and more women are migrating independently to realise their own
aspirations and support their families or households – a phenomenon known as the ‘feminisation of labour
migration’. Hatton and Williamson (1994) argue that migration flows across the globe since 1850 are
well predicted by four economic and demographic indicators: income differentials between regions (or
1
countries); the share of young people of working age (15-30 years) in the home and host countries; the stock
of immigrants already in the host countries (networks); and the incidence of poverty in the home country
(cited in Gubert, 2005:41). However, these factors do not adequately explain the causes of the increasing
feminisation of labour migration, especially in Asia.
Global restructuring of the economy plays a significant role in the increasing feminisation of labour migration
in different parts of the world (see Oishi, 2005:2; Nyber-Sørensen, 2005: 2; Piper, 2005; Castles, 1998). Oishi
identifies four areas of changes that have contributed to the growing feminisation of labour migration around
the world (Oishi, 2005). First, global restructuring of the economy is pushing more middle-class women in
wealthier countries to enter the labour market and thereby increasing the demand for women migrant
domestic workers. Second, the pressures of work (overtime, nightshifts) have been increasing in recent years
due to growing business competition, leading to difficulties in balancing work and family responsibilities,
especially in dual-income families or households. Third, the global economy is generating a class of ‘new
rich’, both in developed and developing countries, who are in a position to afford migrant domestic workers
to care for their homes and children. Finally, populations in many developed and developing countries are
aging and this has increased the need for care-givers. These changes help explain some of the underlying
reasons for the rise in migrating domestic workers in Asia and beyond.
The feminisation of labour migration is now a pervasive phenomenon, especially in Asia1, with the number
of women migrating for work in Asia clearly surpassing that of males (United Nations, 2006: 3). By the early
See Piper, 2005, 2006a, 2006b; Parrenas, 2005; Momsen, 1999; Chin, 1998; Yeoh et al. 2002; Huang et al. 2005; Oishi, 2005;
1
Asis, 2003; Abella, 1997; Anggraeni, 2006.

1990s, some 1.7 million Asian women were estimated to be working as domestic workers outside their home
country (The Straits Times, 13 May 1995 cited in Hugo, 2004: 92). By the year 2000, an estimated two million
Asian women were working in neighbouring countries in East and Southeast Asia (see Yamanaka and Piper,
2005; Asis, 2006 cited in UNFPA, 2006: 23).
The feminisation of labour migration is particularly pronounced in Indonesia, the Philippines, and Sri Lanka.
In Indonesia and the Philippines, women account for 60 to 80 percent of those seeking work abroad (ILO,
2006). Between 2000 and 2003, an average of 79 percent of all migrants leaving Indonesia to work abroad
were women (see also United Nations 2006, cited in UNFPA 2006: 23). In 2005, over 65 percent of the
nearly 3,000 Filipinos that left the country every day for work or residence abroad were women (UNFPA,
2006). In Sri Lanka in 2002, there were two female emigrants for every male emigrant (Weeramunda, 2004).
Most female labour migration in Asia is still concentrated in the gendered-specific niches, notably domestic
work and the entertainment industry (ILO, 2006). They often assume the role of economic providers for the
left-behind families or households (Hugo, 2003; 1996; Asis, 2003; Piper, 2006; Hewison and Young, 2006).
In the early 1980s, research on feminisation of migration focused mainly on women and migration. Since
the mid 1990s, there has been a noticeable change to ‘gender and migration’ (for details, see Donato et
al. 2006). The shift is due to the fact that attention to the feminisation of migration does not in itself lead to a
gendered analysis. If women constitute half of the world’s migrants, the other half is obviously men (Nyber-
Sørensen, 2005). Hondagneu-Sotelo argues that the ‘women-only approach’ retards our understanding
of how gender as a social system contextualises migration process for all migrants (Hondagneu-Sotelo,
2 2000:114). Studying women in isolation from men leaves the analysis incomplete because it fails to analyse
the differences which may exist between women and men in: (i) the patterns of migration, (ii) the causes and
consequences of migration, and (iii) the policy implications of migration (Hugo, 2006:73).
Donato and his associates recently commented that ‘the state of gender and migration studies is fundamentally
healthy’ (Donato et al. 2006:4). However, despite the fundamental increase in research on gender and
migration, ‘a transnational space, where gender matters but which has not been so thoroughly explored to
date is remittances’ (Mahler and Pessar, 2006: 44). Whether or not gender matters in the remittance process
remains little understood in both academic and policy circles.
1.2 Migrant Remittances: a Development Tool

The unprecedented rise of international migration has resulted in massive in-flows of remittances to the
sending countries. The transfers in cash (or kind) from migrants to their non-migrating families in the source
countries are usually referred to as ‘migrant remittances’ (Bilsborrow et al., 97: 321). In a number of developing
countries, the remittance flows are second only to foreign direct investment, and significantly larger than
official development assistance (Ratha, 2003). Between 2001 and 2005, international migrant remittance
flows increased by 58 percent to reach about US$232 billion (World Bank, 2006a:88). Developing countries
received the biggest share—about US$167 billion—while industrial countries in North America and Western
European countries were the major sources (World Bank, 2006a: xiii). In Southeast Asia, nearly two million
migrants—mostly female— remit more than US$3 billion from Hong Kong SAR2, Japan, Malaysia and
Singapore on averages ranging from US$300 to US$500 (ADB, 2006:1).
Hong Kong Special Administrative Region (Hong Kong SAR), hereafter referred to as Hong Kong.
2
Introduction
The true value of remittances is likely to be much higher because official statistics do not capture informal
remittances (Abella, 1989). One estimate puts informal remittances at between US$100 and US$200 billion
a year (Sander, 2003: 4) while another puts the figure between US$200 and US$300 billion a year (Migrant
Remittances, 2004b:1). In addition to remittances in cash, there are also remittance in-kind, about which
little information exists.
Migrant remittances have far reaching implications for the distribution of wealth and poverty eradication.
This is because a good portion of migrant remittances, especially of ‘workers remittances’ (Goldring, 2004),
is usually destined for relatively backward rural regions that are most in need of financial capital. In addition,
such remittances go directly to the people who really need it (Kapur, 2003:7). As Jones (1998) notes, ‘there
is probably no other more ‘bottom-up’ way of redistributing and enhancing welfare among populations in
developing countries than the remittances’ (cited in de Haas, 2005:1277).
The developmental impacts of remittances are usually examined at the micro- and macro-levels (for a
detailed discussion see Cohen, 2005; De Haas, 2005). Macro-level studies concentrate largely on national
outcomes e.g. foreign exchange and labour patterns3, while micro-level studies focus on the local effects of
remittances, especially on the migrant families and their communities of origin4. Some studies have recently
reported various micro-and macro-economic effects of remittances5. These have found that, at the micro-
economic level, remittances can improve human security, improve the standard of living (e.g. health care,
nutrition, education), ease working capital constraints for investment ventures (e.g. real estate, business and
savings), play a significant role in improving gender relations, and generate ripple effects that impact on
the extended family and community, due in part to the increased consumption. At the macro-economic 3
levels, remittances provide a stable flow of funds that is often counter-cyclical (i.e. they increase during times
of economic downturn), offer an important source of foreign exchange for countries, and exert upward
pressure on the value of the local currency when the inflow of remittances is high.
1.3 Engendering Remittances

The unparalleled growth of migrant remittances has gained the attention of states, international organisations
such as IOM, UNDP, UNIFEM, INSTRAW, UNICEF, UNFPA, GCIM, DFID and DIIS, and international financial institutions
such as the World Bank, Inter-American Development Bank (IDB), Asian Development Bank (ADB), and International
Monetary Fund (IMF). The question of most interest to them is how to harness the development potential of
remittances. The IDB sponsored several years of nation-by-nation studies of the importance of remittances in the
Americas. In Asia, the ADB, the World Bank and other international organisations have sponsored several studies
on how to lower transaction costs and to improve the productivity of remittances in the sending countries6.
However, to date there have been very few studies that disaggregate remittances by the sex of remitters
and senders (Mahler and Pessar, 2006:44). Kunz (2006) argues that the research on global remittance trends
eg Taylor et al., 1996; Rivera-Batiz, 1982; Stinner et al. 1982; Adams, 2003; Pessar, 1991; Burki, 1991
3
eg Asis, 2000, 2003, 2006; Hugo, 2002, 2006; Rahman, 2000; Baker et al. 1997; Hansen, 2000; Madhavan, 1985; Helweg, 1983;
4
Gamburd, 2002; Arif, 1999; Lopez and Seligson, 1991

5
for details, see Ratha, 2007; World Bank, 2006a; Clarke and Wallster, 2004; Yang, 2005; Yang and Martinez, 2005, ADB, 2006;
IFAD, 2006; Lasagabaster et al. 2005; Straubhaar and Vădean, 2005; Piper, 2005
ADB, 2006; ADB, 2004; APEC 2003; Mellyn, 2003; OECD 2000; Ratha 2003; Ratha and Kethar, 2004; Sander, 2003; El
6
Qorchi et al., 2003; Seddon, 2004; UNDP, 2005

is not gender-neutral but gender-blind, i.e. there is scant reference to women and gender issues. Gender
impacts upon the amount of money remitted, the recipients of remittances, and the uses of remittances on
the development of the country of origin (see Nyberg-Sørensen, 2005). Realising the significance of gender
dimensions of remittances, the United Nations International Research and Training Institute for the Advancement
of Women (INSTRAW) has been involved in developing a gender-based approach to remittances, and has
recently published several valuable reports on the gender dimensions of remittances, especially in Latin
America (see Ramirez et al. 2005; Garcia and Paiewonsky, 2006; Garcia, 2006).
Gender matters in the whole process of remittances. Therefore, any detailed study on gender and remittances
should see the remittances as a process and include three important points: (i) sending, (ii) receiving, and
(iii) use of remittances.
The available findings provide a fragmented picture of the gendered dimensions of remittances. For instance,
it is often stated that migrant men remit more money home than women (see Orozco, 2006; Semyonov and
Gorodzeisky, 2005). In parts of Asia, it is reported that when women migrants remit funds home, it is their
mother or other female relative who receives and spends the remittances (Momsen, 1999 cited in Omelaniuk,
2005:11). Nyber-Sørensen maintains that when women control the remittances, they channel them into
better health, education and nutrition for the family, thereby supporting the development of stronger and
more productive communities (Nyber-Sørensen, 2005). However, there is little empirical research on gender
dimensions of remittances which links the sending and receiving countries, especially in Asia.
4 1.4 Research Questions

This study examines the following issues in the context of Asia:
• gender differentiated patterns of earnings, savings and remitting practices;
• gender differentiated patterns among those receiving remittances in the country of origin;
• gender differentiated patterns in uses and development outcomes of remittances for families or
households and communities of origin;
• the role of remittances in the household’s internal dynamics; and
• maximising the development potential of remittances for the women migrants, their families and
communities of origin.
The study also explores the impact of women earning income and remitting it home on the households
themselves by examining:
• who decides where to use remittances;
• whose wishes are followed and futures are considered when the remittances are used; and
• whether migrant households have more respect for the women working abroad because of the
income earned.
1.5 Data Sources

This research is a micro-level study. The micro-level approach is pursued because the effects of remittances
can better be understood only when the process is placed within its local context (Rahman 2000). Although
macro-level approaches to migration research show a great deal about national patterns and outcomes,
they cannot help us to understand what remittances mean for migrant families. Micro-level approaches show
the impacts of remittances on the family and local communities, and the patterns of remittance flows between
Introduction
individual migrants and their origin households. Understanding the micro-level impacts of remittances,
especially the underlying factors contributing to, or impeding the development potential of remittances at
the micro-level, can help policy makers to formulate and implement policies and programmes to harness
this development potential.
The study focuses on domestic workers who are ‘live-in’ migrant domestic workers—because this group of
women migrant workers is large in East and Southeast Asia. It should therefore offer a better insight into the
gender dimensions of remittances in relation to domestic workers.
There have been some studies which have attempted to analyse the gender dimensions of remittances in
East and Southeast Asia, especially in the Philippines and Thailand7. Indonesia is a major female migrant
sending country in the region, and the World Bank is currently sponsoring a project on migration, remittances
and women migrant workers in Indonesia8. However, the gender dimensions of remittances in Indonesia
remain under-researched, and this report will not only provide new knowledge in the academic and policy
domains, but also drive future research in this expanding field.
Remittances involve both destination and source countries; therefore, this study undertakes a multi-sited
research strategy linking both ends. The fieldwork was conducted in Indonesia as well as three destination
countries—Malaysia, Singapore and Hong Kong SAR—which are significant in terms of the numbers of
Indonesian domestic workers and resultant remittance flows to Indonesia.
The fieldwork was conducted in the first half of 2007. The study comprised a survey of 20 Indonesian 5
domestic workers in each of Singapore, Malaysia and Hong Kong SAR, and a survey of 40 households in
Indonesia which had a member working as a migrant domestic worker in one of these countries. Both were
conducted through face-to-face interviews. The questionnaires contained both structured and unstructured
questions focusing on socio-demographic information, earnings, savings, sending of remittances, receipt of
remittances, and use of remittances. The questionnaire schedule was tested and modified after a pilot survey
in Singapore. Interviews were recorded in Bahasa Indonesia and later translated into English.
The respondents were selected through the snowball sampling technique, in which domestic workers
introduced the researchers to friends also involved in domestic work in each host country. Respondents
were included if they had been staying in the host country for at least six months and remitted money back
home at regular intervals. The usual sites for interviews were Sunday meeting places, mosques, kindergarten
premises, and shopping centres. Local NGOs in the destination countries, for example Asian Migrant Centre
in Hong Kong; TWC2 (Transient Workers Count Too) and AWARE (Association of Women for Action and
Research) in Singapore; and CARAM Asia (Coordination of Action Research on AIDS and Mobility – Asia)
and Tenaganita in Malaysia provided valuable information and guidance during the fieldwork.
Most of the domestic worker respondents refused to provide their detailed home addresses in Indonesia,
as they did not want researchers to follow their households or families in Indonesia. Therefore, it was not
possible to interview their households in Indonesia. Instead, Central Java was selected as the location for
7
For the Phillipines see Semyonov and Gorodzeisky, 2005; Trager, 1984; Lauby and Stark, 1988; Tacoli, 1999; Rodriguez, 1996.
For Thailand see Curran, 1995, Phongpaichit, 1993; Richter and Havanon, 1995; Osaki, 1999, 2003; Vanway, 2004.
This study uses data from the preliminary findings of the World Bank study (World Bank, 2006).
8
the fieldwork in Indonesia. Although all major provinces of Indonesia are presently sources of domestic
workers overseas (see Hugo, 2003), the majority of the respondents in the domestic worker sample in all
three countries were of Central Java origin. This predominance is believed to be a coincidence, or perhaps
an outcome of snowball sampling.
Forty domestic migrant households in Central Java were selected on the basis of the following criteria: (i)
they had women migrants working in Singapore, Malaysia or Hong Kong SAR as domestic workers, (ii) their
migrant members had been in any of these destination countries for six months or more; and (iii) their migrant
members had sent remittances to their families during this period.
UNIFEM Indonesia, which has a project on migrant worker families in Central Java, assisted in the household
survey fieldwork process. Twenty domestic worker families/households were selected from the UNIFEM
project site, and the remaining 20 families/households were chosen from outside the project area, to avoid
bias in the data. The migrant households were interviewed using a questionnaire with both structured and
unstructured questions. The interviews were conducted with the recipients of the remittances so that the
findings reflect the actual uses of remittances across gender lines.
1.6 Limitations of the Research

The duration of the fieldwork was limited by financial and time constraints which precluded more in-depth
fieldwork. Potential weaknesses of the survey methodology include the non-random selection of participants,
and the difficulty of validating some self-reported information. The sample size—a total of 100 interviews
6 across one source country of women migrants, and three destination countries—is also small. The research
is therefore a baseline study, useful for building large-scale projects in this expanding field.
This report mainly addresses remittances, and does not cover other issues related to migration among
domestic workers, such as decision-making about migrating, recruitment, the social world of domestic workers
overseas, or emigration outcomes in a broader sense. These can be found in other reports9. Another
limitation of the study is that the domestic workers surveyed are all females, and direct comparisons with
males are not possible. Interviews were not conducted with low-skilled Indonesian male migrants working
in other sectors in these countries, partly because of the absence of such workers in Hong Kong SAR and
Singapore. To overcome some of these limitations, secondary data is used to show the differences in earnings,
savings and remittances across gender lines.
9
See UNIFEM, 2005, 2006; Human Rights Watch, 2005, 2004, 2006; Jones, 2000; Ananta and Arifin, 2007; Spaan, 1994; Hugo,
2003.
The Indonesian Labour Migration Context
2. THE INDONESIAN LABOUR MIGRATION

CONTEXT
This chapter provides background information about Indonesian labour migration, remittance inflows,
channels and transaction costs of remittances, and players in the remittance market involving Indonesia
and the three destination countries under scrutiny. The inadequacies of the remittance services involving
Indonesia and the host countries are especially highlighted to point out the need for policy interventions to
address gender lines.
2.1 Indonesian Labour Migration within Asia: an Overview

Indonesia is one of Southeast Asia’s major emigration nations and one of the world’s largest senders of migrant
workers (Hugo, 2003). There are two major destinations for Indonesian migrant workers: the Middle East, and
East and Southeast Asia10. In the late 1970s, the major destination country was Saudi Arabia. However, in the
1980s, a new trend emerged, with Asian countries like Hong Kong SAR, Singapore and Malaysia becoming
important destinations for women migrant workers, especially domestic workers (Pudjiastuti, 2003:193).
From the early 1970s, Indonesia realised the importance of manpower export overseas, and set targets in
its five-year economic development plans for the number of workers it wanted to send overseas (Firdausy,
2005). During the First Five Year Plan (1969-1974) Indonesia sent 5,423 migrant workers (Hugo, 1995: 276). The
Second Five-Year Plan (1974-1979), when the participation of women in labour migration is first found, shows
3,817 women migrant workers and 12,235 men (Asian Migrant Centre, 2005: 6). In the Third Five-Year Plan 7
(1979-1984), women migrants (55,000) outnumbered men migrants (41,410) for the first time (Asian Migrant
Centre, 2005:6), and this gap continued to increase. In the economic development plan for 1999-2003, the
target was 2.8 million workers (Hugo, 2000).
As of 2005, Indonesian migrant workers are estimated at 2.8 million (Siregar, 2006). However, the actual
figure is believed to be much higher because many workers migrate irregularly to the neighbouring country,
Malaysia. More than 80 percent of Indonesian migrant workers are women (ADB, 2006:121). Indonesia
is currently targeting an annual deployment of one million workers abroad until 2009, and is working on
increasing the number of destination countries for its migrant workers from the present 11 to 25 (AMN 31
January 200611).
Institutional measures to respond to international labour migration date back to the early 1980s, when
the government first set up a unit called Pusat AKAN (Centre for Overseas Employment). The Pusat AKAN
was renamed the Directorate of Overseas Manpower Services in 1994 (Ananta and Arifin, 2007). Technical
implementation—processing, work documents, reviewing contracts and training—is mostly carried out by
the Indonesian Overseas and Domestic Employment Agency (PJTKI). In early 2007, the National Agency for
Placement and Protection of Indonesian Overseas Workers (BNP2TKI) was created, with responsibility for
protection and promotion of Indonesian overseas workers. This is in line with the ‘ASEAN Declaration on the
See Hugo, 1996; 1993; Spaan, 1994; Robinsong, 2000; Silvey, 2004; Sukamdi and Haris, 2004
10
11
Asian Migration News (AMN) is a by-weekly information service aimed at providing scholars, policy makers, advocates and
students with a summary of news and events related to migration in Asia. http://www.smc.org.ph/amnews/amnews.htm
Protection and Promotion of the Rights of Migrant Workers’, signed on 13 January 2007 by the Heads of
State/Government of the Member Countries of the ASEAN in Cebu, Philippines (Ananta and Arifin, 2007).
SINGAPORE
Since the establishment of Singapore as a British trading port by Sir Stamford Raffles in 1819, ‘the history and
fortunes of Singapore have been closely intertwined with migrants and migration’ (Yeoh, 2007). There are
around 620,000 foreign workers and professionals in Singapore (The Sunday Times (Singapore), 13 November
2005). Domestic workers represent one of the largest groups of foreign workers in Singapore, numbering
approximately 150,000 or 30 percent of all work permit holders (ADB, 2006). Approximately one in every
seven Singaporean households employs a ‘live-in’ migrant domestic worker (Human Rights Watch, 2005:2).
Domestic workers are primarily from Indonesia, the Philippines, and Sri Lanka. Roughly half of the estimated
150,000 migrant domestic workers are believed to come from Indonesia (Abdul-Rahman, 2005).
Foreign domestic workers are recruited under two-year work permits, and must be between 23 and 50
years old. They do not usually enjoy a day off in the week. There is no minimum wage for domestic workers
and sometimes they are not paid their monthly wage on time. As a part of the commitment to minimise
vulnerability of the domestic workers and promote the prompt payment of salaries, Singapore has recently
introduced a new rule under which employers of domestic workers are required to deposit their domestic
workers’ salaries into their bank accounts. This is now a new condition for granting work permits (AMN 15
October 2006).
8 MALAYSIA
Migrant workers began entering Malaysia in the 1970s because of the New Economic Policy’s (1971-1990)
efforts to restructure the economy and society, and the international relocation of manufacturing industries
(Kassim 1999; Pillai, 2000; Abdullah and Chan 2000; Lim, 1988). There are some 1.8 million documented
foreign workers and another 700,000 undocumented ones in Malaysia. They are mostly from Indonesia,
Myanmar, India, Bangladesh and China, and mainly work in construction, plantations and domestic services
(AMN, 28 February 2007). According to the Human Resources Ministry of Malaysia, there are likely to be
more than five million foreign workers by 2010 if the current pace of recruitment continues (AMN 15 August
2006).
Indonesian migration to Malaysia started in the 1970s (Nasution, 2003). By 1981, there were an estimated
130,000 Indonesian estate workers in Peninsular Malaysia (Mehmet 1988 cited in Wong, 2006). The key
official measures for foreign migrant labour in Malaysia first started with the formation of a committee for
the recruitment of foreign workers in 1982 (Chin, 2002: 39). In 1984 Malaysia signed the Medan agreement
with Indonesia to hire migrant workers for plantation and domestic services. The percentage of women
migrant workers continued to increase in the following decades. By 1992, women comprised 89 percent of
the 95,908 registered Indonesian migrant workers (World Bank, 2006b).
Indonesians constitute the bulk of the foreign worker population, accounting for about 73 percent. According
to the Home Affairs Ministry, 310,661 or 16.6 percent of the 1.9 million migrant workers holding temporary
work permits are domestic workers. Of these, 95 percent come from Indonesia (AMN 31 April 2007).
Domestic workers do not enjoy a day off in the week. There is no minimum wage for domestic workers, and
sometimes they do not receive their monthly wage on time. However, Malaysia is considering a law that
would make it mandatory for employers to deposit their domestic workers’ salaries into bank accounts under
the workers’ name. The women’s welfare group Tenaganita has said that while it welcomes the effort to
protect the workers, it considers the move an ad hoc solution to the many problems that domestic workers
face in the country (AMN February 2006).
HONG KONG SAR

Migrant domestic workers have been employed in Hong Kong SAR since the mid-1970s, increasing from 1
percent of the labour force in 1982 to 7 percent in 2001 (Lee and Petersen, 2006). Foreign domestic workers
comprise 88 percent of Hong Kong’s migrant worker population (ADB 2006: 4). Migration of Indonesian
domestic workers to Hong Kong SAR started in the early 1990s. By the end of the decade, there were 80,000
Indonesian migrant workers in Hong Kong SAR, with an average yearly increase of 16,000 (Asian Migrant
Centre, 2005). Indonesian foreign domestic workers increased from around 1,000 in 1990 to 92,000 in
2005 (ADB, 2006: 5).
Domestic workers in Hong Kong SAR are usually recruited on a 2-year visa, subject to certain requirements
and limitations12, and are given one rest day each week. Unlike the other two host countries in this study,
Hong Kong SAR has an official minimum wage. The standard contract form specifies a minimum allowable
wage determined by the Hong Kong Government, which has been set at HK$3,400 per month since June
2006 (AMN, 31 May 2006). However, Wee and Sim report that domestic workers from Indonesia are
underpaid at illegal rates from HK$1,500 to 2,000 per month, and not given days off (Wee and Sim, 2004). 9
According to the official policy, employers should pay domestic workers their wages in cash or, with the
domestic workers’ consent, by cheque or deposit into domestic workers’ bank account. Employers of domestic
workers are usually required to provide a receipt for payment of wages, which the domestic workers sign
to acknowledge receipt13.
2.2 Remittance Flows to Indonesia

It has long been the Indonesian government’s policy to encourage the sending of skilled and semi-skilled
manual workers overseas as a means to boost its economy and reduce unemployment at home (Elan
and Haris, 2004). Indonesians working abroad (‘tenaga kerja Indonesia’, or ‘TKI’) not only help lessen
unemployment, they also contribute to the Indonesian economy by transferring income back home. The
recorded remittances received by Indonesia were approximately US$1.2 billion per year from 1998 until
1999 and reached nearly US$2 billion in 2001 (ILO, 2006).
In 2005, Indonesian migrant workers sent home some US$2.9 billion in remittances, up threefold from the
US$1.0 billion remitted in the previous year (AMN, 31 January 2006). In 2006, remittances by migrant workers
amounted to US$3.4 billion, equivalent to 1 percent of Indonesia’s gross domestic product or 6 percent of
foreign exchange reserves (The Jakarta Post, 31 July 2007). In 2007, remittances were forecast to reach US$9
billion, and had already reached US$6.5 billion in the first six months (The Asia Pulse, 9 August 2007).
For details see http://www.immd.gov.hk/ehtml/hkvisas_5.5.htm accessed at 8.20 pm on 22 August 2007

12
Details can be found in http://www.immd.gov.hk/ehtml/id407form.htm accessed at 8.20 pm on 22 August 2007. See also
13
http://www.immd.gov.hk/ehtml/hkvisas_5.5.htm
Total annual remittances from the Southeast Asian region to Indonesia are estimated at US$700 million (ADB,
2006:133). The Manpower and Transmigration Ministry, Indonesia, has projected that cumulative remittances
from overseas Indonesian workers will reach $20 billion over the next five years (AMN, 15 August 2006).
These estimates do not take into account the remittances made by the estimated 3.5 million undocumented
migrants (Firdausy, 2006).
A large proportion of remittances are sent to rural areas, where incomes are generally far below national
averages (Hugo, 2003). Remittances have provided a source of income to families in provinces with few
job opportunities and the lowest levels of investment and economic development the entire nation (Hugo,
2002:41). As women are the main migrant workers in Indonesia, they are the main ones remitting this money
home to Indonesia.
2.3 Channels and Costs of Remittance Transfers

There are two broad types of remittance transfer channels: formal and informal. Within formal channels, the
institutions involved in remittance transfers are supervised by government agencies and laws that determine
their creation, characteristics, operations and closure (APEC, 2003: 3). These formal systems include banks
and postal services, money transfer operators (MTOs) such as Western Union, MoneyGram and other
wire transfer services, and credit unions. Western Union has more than 312,000 agents located in over
200 countries and territories worldwide, while MoneyGram operates in 170 countries worldwide and has
125,000 local agents14.
10 Formal remittance channels play a dominant role in the remittance of cash to Indonesia from Singapore,
Malaysia and Hong Kong SAR (see also ADB, 2006). However, the formal system is often criticized for high
transaction costs and exchange loss. According to Maimbo et al. (2005:5), the average cost of transferring
remittances in formal system is about 13 percent of the amount remitted and sometimes exceeds 20 percent.
According to the ADB (2006:60), transaction costs among formally licensed money-transfer businesses in
Southeast Asia range from 4 percent to 9 percent of the total amount sent.
Informal funds transfer channels have long been in existence15, and exist and operate ‘outside of (or parallel
to) conventional regulated banking and financial channels’ (Buencamino and Gorbunov, 2002: 1). Initially
used as part of trade and commerce, they were also drawn upon by early migrants to transfer savings
(Hicks, 1993).
While remitting cash and in-kind through friends and acquaintances is found among some Indonesian
domestic workers, it is not a common practice. In such informal remittance transfers, domestic workers do not
need to pay fees and the carriers (friends or acquaintances) usually deliver the cash to the person specified
by the domestic workers. This study has not found the existence of any highly organised informal channels
comparable to ‘hundi’ (for South Asia migrants) or ‘padala’ (found in the Philippines), between Indonesia
and other countries studied.
Information compiled from websites http://www.westernunion.com and http://www.moneygram.com, accessed at 9.29 pm,
14
13 August 2007.
Udovitch, 1970; Mcpherson, 1993; Ballard, 2005; Passas, 1999.
15
2.4 Remittance Services between Indonesia and East and Southeast Asia
The remittance markets in the destination and home countries in this study are not equally developed. As a
result, domestic workers have differential access to remittance services. This section provides an overview
of the different types of remittance services available in each country.
2.4.1 Formal Remittance Channels in Host Countries

In Singapore, remittance services are provided by domestic banks (Singapore’s Post Office Savings Bank),
local branches of foreign banks, and licensed remittance companies. Foreign banks with nationals working
in Singapore play a significant role, and there are two licensed Indonesian banks—Bank Negara Indonesia
(BNI) and Bank Mandiri (ADB, 2006). There are also more than 100 remittance companies, with nearly 200
branch locations located throughout Singapore (ADB, 2006), including Western Union, which has a strong
presence. Indonesian domestic workers usually use banks and Money Transfer Outfits to remit money back
home.
In Malaysia, only banks are allowed and regulated to offer remittance services to migrant workers, with the
exception of IME Impex for the Nepalese community. The banks that are particularly active in this area are
RHB Bank, Bumiputra-Commerce Bank, and May Bank. In addition, the Bank Simpanan Nasional (BSN) has
a special arrangement with some Indonesian banks for remittance transfers (ADB, 2006). For remittances to
Indonesia, Western Union and MoneyGram are the major MTOs. Western Union has a licensing agreement
with Bumiputra-Commerce Bank, and operates in collaboration with Post Office Malaysia. However, MTOs
in Malaysia do not pose strong competition overall. Indonesian domestic workers use the services of both
banks and MTOs to remit money back home. 11
In Hong Kong SAR, the major players are Indonesian commercial banks, international MTOs, and local
companies or ethnic stores. Indonesian banks dominate the market, with six having a significant presence
in Hong Kong SAR: Bank Central Asia (BCA), Bank Internasional Indonesia (BII), Bank Mandiri, Bank Negara
Indonesia (BNI), Bank Niaga, and Bank Rakyat Indonesia (BRI) (see ADB, 2006). MTOs also play a significant
role in money transfers for the Hong Kong-Indonesian remittance corridor.
In short, Singapore and Hong Kong SAR have a liberal policy which allows healthy competition in their
remittance markets, while Malaysia is on the way to opening up its remittance market.
2.4.2 Formal Remittance Channels in Indonesia

Indonesia allows six commercial banks to be actively involved in Indonesian migrant workers’ remittance
transfers: Bank Negara Indonesia (BNI), Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Central Asia (BCA),
Bank Niaga, and Bank Danamon (ADB, 2006:134). BNI is currently the leader in the market due to its early
start and relatively more developed domestic and foreign networks. Other players are Western Union and
MoneyGram. Western Union operates in Indonesia through agents, including banks and the Postal Service,
and is estimated to have 2,000 outlets across the country (ADB, 2006:134). MoneyGram also operates in
Indonesia via agents and its geographical coverage is gradually expanding to include remote places.
In addition to official charges paid by the sender of remittances in the host countries, additional charges
may be payable by the receiver of remittances in Indonesia, depending on the method and bank used.
There are hardly any door-to-door delivery, debit card or other technologically advanced services such as
mobile-to-mobile services or card-based remittance services. Bank-to-bank and cash pickup are the main
services offered by these formal channels, so recipients of remittances need to visit the bank or post office
to collect the cash. Bank-to-bank transfers may take up to a week.
Indonesia is still far behind in opening up the market compared to the Philippines, an emigration country
par excellence. The number of players in the formal channels is limited because financial regulations in
Indonesia do not allow telecommunication companies, microfinance institutions, and money changers to
engage in money transfer activities (ADB, 2006: 134). Restricted policies related to the remittance market
have, to some extent, discouraged healthy competition and the introduction of newer services (discussed
in Chapter 6), resulting in higher transaction fees for domestic workers.
12
Remittance Sending: Singapore, Malaysia and Hong Kong SAR
3. REMITTANCE SENDING: SINGAPORE, MALAYSIA

AND HONG KONG SAR
This chapter explores the capacity of migrant workers to earn, save and remit money back home. The first
section provides background information about the Indonesian domestic workers in the study sample. The
next two sections present the data on their earnings, savings and remittances, followed by the channels
of remittances which they use, and the relationships they maintain with financial institutions (in the form of
bank saving accounts). The final section analyses gender differentiated patterns in earnings, savings and
remittances by comparing these findings with existing data in secondary sources.
3.1 Socio-Demographic Profiles of Domestic Workers

The socio-demographic profiles of the domestic workers in the study is presented in Table 3.1. Overall,
approximately three quarters of the respondents were below 36 years old, and only 35 percent were married.
All the respondents were literate, and the majority had 5 to 10 years of formal schooling. This compares to
an adult literacy rate in Indonesia for 2000-2004 of 92.5 percent for men and 83.4 percent for women16.
This suggests that the segment of the Indonesian population migrating overseas for work is more educated
than the national average.
Although the respondents were spread across all major provinces/regions in Indonesia, the majority originated
from Central Java. Almost two-thirds had been working in their host countries for more than 2 years. On
average, two thirds of the respondents were the principal economic providers for the families or households 13
they had left behind, i.e. their remittances provided the bulk of the household incomes and expenses.
Source: 2000-2004: Statistical Annex, Table 2, national estimates provided to the UNESCO Institute for Statistics, website,
16
http://portal.unesco.org/education/en/file_download.php/71aab5ac68977a2d997446bc8256bea3table3.8.pdf accessed at 1.41

pm on 25 July 2007
Table 3.1 Socio-Demographic Profiles of Domestic Workers

Singapore Malaysia Hong Kong SAR Total
Categories
% (n=20) % (n=20) % (n=20) % (n=60)
Age (years)
Below 25 20 35 20 25
26 to 30 25 35 45 35
31 to 35 20 5 30 19
36 to 40 15 15 0 10
41 to 45 10 10 5 8
Above 46 10 0 0 3
Marital status
Married 35 45 25 35
Unmarried 35 40 50 42
Divorced 15 5 5 8
Widow 15 10 15 13
Missing data 0 0 5 2
Education (years of schooling)
Less than 5 years 25 30 30 29
5 to 10 years 45 70 60 58
10 to 12 years 30 0 10 13
14 Region of origin
Central Java 45 25 60 43
West Nusa Tenggara 0 5 0 2
East Java 40 20 35 33
West Java 5 15 0 6
Lampung 10 10 5 8
Other 0 25 0 8
Duration of stay in host country
Below 2 years 20 30 20 23
2 to 3 years 10 30 10 17
3 to 4 years 15 25 15 18
4 to 5 years 10 0 10 7
More than 5 years 45 15 45 35
Principle economic provider in family
Respondent (domestic worker herself) 60 60 70 63
Parents 10 15 0 8
Brother 0 5 0 2
Husband 15 5 0 7
Other 10 5 20 12
No comment 5 0 10 5
3.2 Incomes, Savings and Remittances17

Table 3.2 presents the monthly earnings, savings and remittances of the twenty Indonesian domestic workers
in Singapore. Sixty-five percent of the respondents reported a monthly salary of S$301 (US$198) or above,
with ten percent earning more than S$500 (US$328) a month, and a mean earning of S$356 (US$234)
a month. The mean monthly saving was S$249 (US$163), equivalent to 70 percent of the mean earnings.
In comparison, employment agencies in Singapore have reported that the typical monthly wage for an
Indonesian domestic worker was S$250 (US$164) (ADB, 2006:226), while an ADB survey found that Indonesian
domestic workers earned an average of S$285 (US$187) per month (ADB, 2005:231). Another study by the
Asian Migrant Centre (2005:21) reported that the average monthly salary of Indonesian domestic workers
was S$260 (US$170).
Table 3.2 Earnings, Savings and Remittances from Singapore

n=20
Monthly Earnings (US$) % Monthly Savings (US$) % Last Remittance (US$) %

131 to 164 15 Below 98 5 66 to 132 30
165 to 197 20 98 to 131 15 132 to 197 5
198 to 230 35 132 to 164 20 197 to 262 15
231 to 262 5 165 to 197 10 262 to 328 5
263 to 295 5 Above 197 10 328 to 393 5
296 to 328 10 Missing data 18 40 393 and above 30
329 and above 10 Missing data 10 15
Mean: US$234 (S$357) as of Mean: US$163 (S$249) – equivalent Mean: US$425 (S$653) – equivalent
31 August 2007 to 70% of mean earnings to 1.83 times the mean earnings
Table 3.3 presents the data for the twenty Indonesian domestic workers in Malaysia. Around 30 percent
of the respondents earned a monthly salary of between RM601 and RM1,200 (US$171 and US$343), with
a mean earning of RM551 (US$157) a month. Three quarters of the respondents saved more than RM301
(US$85) a month, with a mean saving of RM4,256 (US$122), which was equivalent to 77 percent of the
mean monthly earnings. In comparison, the World Bank (2006) reported the average income in Malaysia as
RM350 (US$100) per month, while the Asian Migrant Centre (2005: 21) reported a figure of RM380 (US$109)
per month. According to a source in the Malaysian Association of Foreign Maid Agencies, the wage rate for
Indonesian domestic workers is RM500 (US$143) a month (Asian Migration News, 15 March 2007).
The data on earnings, savings and remittances were collected using ranges defined in local currency. For this reason, it is not
17
possible to present the data for each country using consistent ranges in US$.
Some of the domestic workers were paying back debts they had incurred to meet the expenses of migration, and were unable
18
to save any of their earnings.

Table 3.3 Earnings, Savings and Remittances from Malaysia

n=20

72 to 84 20 56 to 84 25 Below 142 15
85 to 168 50 85 to 112 45 142 to 285 45
169 to 252 15 113 to 140 20 285 to 427 10
253 to 336 15 141 and above 10 427 to 570 15
570 and above 10
Missing data 5
Mean: US$157 (RM551) Mean: US$122 (RM426) – equivalent Mean: US$324 (RM1,156) – equivalent
to 77% of mean earnings to 2.1 times the mean earnings
Note: Malaysian Ringgit (RM) 1= US$0.285 on 31 August 2007. Values are in round figures.
Table 3.4 shows the data for the twenty Indonesian domestic workers in Hong Kong. Just 35 percent received
a monthly salary of HK$3400 (US$436) or above—the minimum official wage set by the government in May
2006, while 50 percent of the respondents draw a monthly salary below the official rate, and the remaining
15 percent declined to provide this information. This is consistent with reports that illegal underpayment of
wages is quite common in Hong Kong, especially for Indonesian domestic workers—for example, in 2006
the ADB reported that 28 percent of Indonesians received a monthly income below the legal minimum
wage at that time (ADB, 2006:107).
16
In the study sample, the mean earning was HK$3334 (US$422) a month. The mean saving was HK$2043
(US$261), equivalent to 61 percent of the mean monthly earnings—a lower rate than that of the domestic
workers in Singapore and Malaysia. This may be because, unlike those in Singapore and Malaysia, Indonesian
domestic workers in Hong Kong enjoy one day off a week, leaving ample opportunity to spend savings
for shopping and other purposes.
Table 3.4 Earnings, Savings and Remittances from Hong Kong SAR
n=20

320 to 384 5 64 to 128 5 128 to 256 30
384 to 448 75 128 to 256 40 256 to 384 10
448 to 512 5 256 to 384 15 384 to 512 5
Missing data 19
15 Missing data 40 512 to 640 5
640 and above 20
Missing data 30
Mean: US$422 (HK$3334) Mean: US$261 (HK$2043) – equivalent Mean: US$638 (HK$4986) – equivalent
to 61% of mean earnings to 1.49 times the mean earnings
Note: Hong Kong Dollar (HK$) 1= US$0.128 on 31 August 2007. Values are in round figures.
19
Some of the domestic workers in Hong Kong did not like to reveal some detailed information about incomes, savings and
remittances. As a result, there is a higher percentage of missing data in this category.
The majority of migrants do not remit money every month (see also World Bank, 2006; Asian Migrant Centre,
2005; Wee and Sim, 2004), but rather, once in every two or three months (or even more). In addition, many
of the domestic workers like to carry part of their savings with them when they return home. To capture the
pattern of remittances behaviour more accurately, the domestic worker survey therefore investigated the
amount of money remitted in their last transfer. The respondents remitted an average of S$653 (US$425)
from Singapore, RM1,156 (US$324) from Malaysia, and HK$4986 (US$638) from Hong Kong SAR. These
figures were equivalent to 1.83 times the mean earnings of the sample workers in Singapore, 2.1 times the
mean earnings of those in Malaysia, and 1.49 times the mean earnings of those in Hong Kong SAR. Thus,
the domestic workers tend to remit a big part of their earnings in each transfer.
3.3 Channels of Remittances Used

The data on channels of remittance transfers presented in Table 3.5 and Table 3.6 demonstrates an
overwhelming tendency among the study respondents to use formal remittance channels. On average,
80 percent of respondents had used formal channels during their last transfer of remittances. However, in
Hong Kong SAR, 35 percent of respondents had used informal channels. The same pattern was evident
over with the channels of remittances used during the respondents’ entire stay in their host countries, with
the same proportion (35 percent) of respondents in Hong Kong SAR only using informal remittance channels,
compared to 77 percent across the three countries. More research is needed to explain why the use of
informal remittance channels is higher in Hong Kong SAR than in Malaysia and Singapore, despite their
greater geographical proximity to Indonesia.
Table 3.5 Channels of Remittances Used in Last Transfer

17
Singapore Malaysia Hong Kong Total
Channels Used SAR
% (n=20) % (n=20) % (n=20) % (n=60)
Formal (banks, post office, MTOs etc) 95 80 65 80

Informal (friends, recruiting agents, acquaintances) 5 15 35 18
Table 3.6 Channels of Remittances Ever Used During Stay in Host Countries

Channels Used SAR
% (n=20) % (n=20) % (n=20) % (n=60)
Only formal channels 90 85 55 77

Only informal channels 5 5 35 15
Both channels 5 5 0 3
Informal remittance channels primarily consist of hand-carriage mainly by relatives, friends and acquaintances
when they return home upon the completion of contracts. The emergence and continuation of informal
remittance transfers should be attributed to the growth of network-based migration in Indonesia. Indonesian
domestic worker migration is facilitated by migration networks based on social and symbolic ties linking
would-be migrants with current migrants, recruiting agencies and other facilitators (see Ananta and Arifin,
2004; Wee and Sim, 2004; Faist, 2000, Massey et al. 1993). The social infrastructure that network-based
migration develops to transfer labour from Indonesia to destination countries also facilitates informal
remittance transfers from these destination countries back to Indonesia.
Informal channels have some advantages over formal channels. Informal channels usually provide fee-free
services, and can deliver in-kind remittances. Both cash and in-kind remittances are usually delivered to the
migrant households through physical visits. However, informal remittance channels are not risk-free, and a
few cases of missing in-kind remittances were reported during the fieldwork in Hong Kong SAR.
In contrast, formal channels are risk-free but they charge fees which vary depending on the amount of money
remitted, with a minimum fee for each remittance. In the remittance-corridors from Singapore, Malaysia
and Hong Kong SAR to Indonesia, the transaction costs for each remittance transfer have been estimated
from 4 percent to 10 percent of the total amount sent20. Formal remittance service providers also maintain
office hours which are often inconvenient for domestic workers. Therefore, there is a need to embark on
policy measures to reduce the transaction costs of remittances and establish some gender-friendly formal
remittance channels, especially to serve the growing female migrant population in the region.
3.4 Relationships with Financial Institutions

Domestic workers’ relationships with banks in their home and host countries were examined to determine
the prevalence of their relationships with financial institutions. While having bank accounts does facilitate
remittance services, it is not the determinant of the use of formal channels. This is because remitting through
18 MTOs or post offices does not require any bank account.
Despite the improved banking facilities in their host countries, 60 percent of the domestic workers surveyed
reported having bank accounts in Indonesia, while 40 percent had bank accounts in their host countries (Tables
3.7 and 3.8), demonstrating that these domestic workers maintained a stronger relationships with the financial
institutions in their home country than in their host countries. However, as discussed in Chapter 2, some host
countries are making rules for employers to credit the monthly salary of domestic workers into their bank accounts,
so it is expected that most workers will have bank accounts in their host countries in the near future.
Table 3.7 Relationships with Financial Institutions: Host Countries

Bank Accounts SAR
% (n=20) % (n=20) % (n=20) % (n=60)
Yes 40 15 65 40
No 60 85 30 58
20
The figure may vary depending on the day of use of remittance services (usually on Sunday higher fees and foreign exchange
rate varies), means of transport to remittance services (use of public transport or cab) etc. On the receiving side, the recipients
incur transport costs and other hidden costs as well. In addition to fees charged by formal channels, other expenses are, therefore,
also considered to provide this rough estimate of costs of remittance transfers.
Table 3.8 Relationships with Financial Institutions: Indonesia

Bank Accounts SAR
% (n=20) % (n=20) % (n=20) % (n=60)
Yes 60 35 85 60
No 40 65 10 38
3.5 Gender-Differentiated Patterns in Earnings, Savings and Remittances

It is often stated that male migrants remit more money home than women migrants (see Orozco, 2006;
Semyonov and Gorodzeisky, 2005). However, this is often a direct result of income disparity. For example,
Bangladeshi workers in Singapore (n=126) earned an average of S$712 (US$467) per month (Rahman and
Lian, 2005:74), compared to the average of S$356 (US$234) per month of the women Indonesian domestic
workers in Singapore (n=20) in this study. In a study on Nepalese migrants in Hong Kong, almost all Nepalese
males in the construction sector earned monthly incomes of HK$7,000 to HK$15,000 (US$896 to US$1920)
(Frost, 2006: 121), compared to the average of HK$3334 (US$422) per month of the women Indonesian
domestic workers in Hong Kong (n=20) in this study. Informal interviews of Indonesian male migrants in Kuala
Lumpur, Malaysia during this study found that they earned RM1,000 to RM1,300 (US$285 to US$371) in the
construction sector, RM600 to RM900 (US$171 to US$257) in the plantation sector and RM600 to RM900
(US$171 to US$257) in the manufacturing sector per month, compared to the average of RM551 (US$157)
per month of the women Indonesian domestic workers in Malaysia (n=20) in this study21. 19
A recent study of Bangladeshi male migrants in Malaysia (n=50) and Hong Kong (n=47) found that they
remitted on average RM475 (US$135) per month from Malaysia and HK$3,196 (US$409) per month from
Hong Kong (Ullah and Panday, 2007). Since male migrant workers often tend to hold higher paid jobs, they
can afford to save and remit more.
In contrast, women migrant workers often tend to concentrate in gender-specific niches (e.g. domestic work,
elder care or the entertainment industry) because of the limited opportunities open to them when they
migrate. They also tend to draw lower wages due to the gender-biased pay system in the labour market.
As a result, a women migrant’s ability to remit is seriously reduced. The Indonesian domestic workers in
Singapore, Malaysia and Hong Kong in this study saved an average of 69 percent of their monthly income,
presumably to remit or take back home upon the end of their contract. On average they remit 1.8 times
their monthly earnings in each transfer.
Also supported by some NGO activists in Malaysia (e.g. Harun, from Tenaganita, Kuala Lumpur, 2007).
21
20
Remittance Receiving: Indonesia
4. REMITTANCE RECEIVING: INDONESIA

This chapter addresses the gender dimensions of the recipients of remittances based on data collected
in three host countries and Indonesia. The first section provides socio-demographic profiles of the migrant
households interviewed in the household survey. The second section presents findings on the gender
dimensions of remittance-receiving in Indonesia, while the final section discusses gender-differentiated
patterns in remittance-receiving by comparing the findings with secondary data.
4.1 Socio-Demographic Profiles of Households

Forty migrant households that had female members working as domestic workers in Singapore, Malaysia or
Hong Kong SAR were interviewed in the household survey. Their socio-demographic profiles are presented
in Table 4.1. Fifty-two percent of the respondent households had family members working in Hong Kong
SAR, 30 percent in Singapore, and 18 percent in Malaysia. Around 37 percent of the respondents were
mothers, 23 percent were fathers, 15 percent were husbands and 30 percent were siblings. Around 78
percent of respondent households had between 2 and 5 members. Eighty percent of the women migrants
of the respondent households had been working overseas between 2 and 6 years. Approximately 83
percent of the households depended on remittances for household expenses, including 45 percent which
were critically reliant on remittances for subsistence living.
Table 4.1 Socio-Demographic Profiles of the Migrant Family
n=40 21
Percentage of Percentage of
Household characteristics Migrant domestic worker characteristics
sample sample
Person interviewed Country of work

Mother 38 Singapore 30
Father 23 Malaysia 18
Husband 15 Hong Kong SAR 53
Brother 8
Sister 15 Duration of work overseas
Others 3 2 to 4 50
5 to 6 30
Size of household 6 to 8 13
2 to 5 78 8 to 10 3
6 to 9 23 Above 10 years 5
Importance of remittances for Marital status

subsistence living Married 25
Very important 45 Unmarried 75
Important 38
Not important 12
Not very important 0
Missing data 5
Note: all figures are rounded to whole numbers. Categories may not add up to 100% because of
rounding.
4.2 Remittance Recipients

4.2.1 Household Survey
In the household survey, the largest group receiving remittances was the mothers of the domestic workers,
while the second largest group was the fathers (Table 4.2). While 25 percent of the domestic workers were
married, only 15 percent sent their remittances to their husbands. The sisters of the domestic workers were
also a major recipient group (15 percent). Although the number of female recipients is slightly higher than
that of male recipients, the difference in the gender dimension of remittance-receiving is not significant.
Fifty-three percent of the households had received remittances once in the last three months, with a further
23 percent receiving no remittances in that period (Table 4.2). The majority of households (62 percent) had
received remittances of between 1 million and 5 million Rupiah (US$108 to US$540).
As discussed in Chapter 2, formal remittance channels remain the predominant means of remittance
transfers for Indonesia. In the household survey, 95 percent of the families had received remittances through
formal channels, with only one family receiving remittances through informal channels, and one receiving
remittances through both. The major formal channels used were Bank Negara Indonesia (45 percent) and
Bank Rakyat Indonesia (30 percent). Surprisingly, two households reported instances where remittances had
gone missing. One attributes this loss to the use of an informal channel, while the other blamed a formal
channel, and particularly the complicated official forms that the women migrant had had to complete to
send the remittances.
Table 4.2 Remittance-Receiving: Household Survey

22
n=40
Categories % Categories %
Recipients of remittances Frequency of remittances (in last 3 months)

Father 23 Once 53
Mother 38 Twice 10
Husband 15 Three times 15
Brother-in-law 3 None 23
Brother 8
Sister 15
Sex of recipients of remittances Channels of remittance

Female 52 Formal 95
Male 48 Informal 3
Both 3
Amount received in last transfer Formal channels used

Below Rp 1 million (US$108) 8 Bank Central Asia 5
Rp 1 to 5 million (US$108 to 540) 63 Bank Negara Indonesia 45
Rp 5 to 10 million (US$540 to 1080) 20 Bank Rakyat Indonesia 30
Rp 10 to 15 million (US$1080 to 1620) 0 Western Union 8
Rp 15 million and above (US$1620) 8 Simpanan DESA (SIMPEDES) 3
Missing data 3 Missing data 8
Remittance Receiving: Indonesia
4.2.2 Domestic Worker Survey in Host Countries

In the domestic worker survey, 25 percent of the domestic workers across the three countries sent their
remittances to their mothers, while another 25 percent sent them to their fathers (Table 4.3). While 35 percent
of the surveyed domestic workers were married, only 10 percent sent their remittances to their husbands.
Thus, in both surveys a tendency not to remit to their husbands was found. Among other recipients, sisters
and children are noteworthy.
There were noticeable differences in the gender dimensions of remittance-receiving between Hong Kong
SAR and the other two host countries, Singapore and Malaysia. These were basically due to differences
in the marital status of the domestic workers in the samples. The numbers of married domestic workers in
Malaysia and Singapore were higher than those in Hong Kong SAR (Table 3.1). As a result, fathers, mothers
and sisters constituted the highest number of recipients from Hong Kong SAR. In this study, unmarried domestic
workers tended to remit to female members of their family, while married domestic workers tended to remit
to both female and male members of their family.
Table 4.3 Remittance-Receiving: Domestic Worker Survey

Categories SAR
% (n=20) % (n=20) % (n=20) % (n=60)
Recipients of remittances
Father 15 25 35 25 23
Mother 15 30 30 25
Husband 20 5 5 10
Sister 5 5 15 8
Brother 10 5 5 7
Children 35 20 0 18
Others 0 10 10 7
Sex of recipients
Male 50 50 30 43
Female 50 45 70 55
4.3 Gender Differentiated Patterns in Remittance-Receiving

In both surveys, women were slightly more likely to be the recipients of remittances compared to men.
However, the study did not identify statistically significant gender differences in remittance-receiving. In this
context, it is worth noting that, in comparison with women from other countries in the region, women in Java
are thought to have high status because of their ability to control their own movements, outside the village
and in the marketplace; to control the income they earn; and to own property (Atkinson and Errington,
1990, cited in Wolf, 1992). Studies on Javanese women often portray them as independent, economically
autonomous and equal if not superior to their husbands (Geertz, 1961).
24
5. USES AND DEVELOPMENT OUTCOMES

This chapter addresses the use of remittances and the development implications for domestic workers, their
families and communities, based on data from the domestic worker survey and the household survey. The
first section presents findings on the use of remittances among the study sample. In the second section, a
brief discussion on gender, remittances and investment is provided. The final section explores the impact of
remittances on family dynamics.
5.1 Use of Remittances: Domestic Worker Perspective

Both the domestic worker survey and the household survey asked respondents to list the top three areas
in which they used remittances, in order of priority. Table 5.1 presents the top three uses from the domestic
worker's perspective. In all three countries, the highest ranked use for remittances was education. Basic
consumption was ranked second highest by domestic workers from Singapore and Malaysia, and third
highest by those in Hong Kong SAR, where savings were ranked second. Domestic workers from Malaysia,
ranked house construction third highest, probably due to the presence of higher percentages of married
domestic workers in Malaysia (45 percent).
Table 5.1 Top Three Uses of Remittances According to Senders
Singapore Malaysia Hong Kong SAR

Rankings
% (n=20) % (n=20) % (n=20)
1st Education (60%) Education (80%) Education (65%) 25
2nd Basic consumption (50%) Basic consumption (65%) Savings (60%)
3rd Savings (45%) House construction (50%) Basic consumption (55%)
To better understand the emphasis on using remittances for education, the study investigated the presence
of school-going members in the families left behind in Indonesia. In the domestic worker survey, almost
two-thirds of respondents reported have school-going members in their families (Table 5.2), while in the
household survey, 93 percent of families reported having school-going children (Table 5.3).
Table 5.2 Family Members Pursuing Education: Domestic Worker Survey
Family members Singapore Malaysia Hong Kong SAR Total

pursuing education % (n=20) % (n=20) % (n=20) % (n=60)
Yes 75 75 65 72
No 25 25 10 20
Table 5.3 Family Members Pursuing Education: Household Survey
Indonesia
Family members pursuing education
% (n=40)
Yes 93
No 8
These findings differ from a recent study by ADB (2006:22), in which education was not rated highest in
any of the countries of this study. In that study, the top three uses for remittances mentioned by domestic
workers in both Malaysia and Singapore were food, then clothing, and then education, while those in Hong
Kong SAR mentioned savings, then education, and then business. Unlike the ADB study, this study does not
distinguish basic consumption from clothing and food; so there may be some overlap in the data. However,
in this study, business did not appear as one of the top three uses in any of the countries studied.
5.2 Use of Remittances: Household Perspective

Respondents to the household survey were also asked to list the top three areas in which they used remittances,
in order of priority (Table 5.4). The top three uses of remittances are: house construction (69 percent), basic
consumption (63 percent), and savings (42 percent). Although these uses of remittances differ in ranking with
the findings of domestic worker surveys in Singapore, Malaysia and Hong Kong SAR, they all are found as
the top three uses of remittances in domestic worker survey.
Table 5.4 Top Three Uses of Remittances: Household Survey
n=40
Rankings Items
1st House Construction (69%)

2nd Basic consumption (45%)
3rd Savings (42%)
26
5.3 Gender, Investment and Development
Much of the literature on remittances and development has focused on whether remittances were used for
productive investment or consumption (for a review see Papademetriou and Martin, 1991; Hermele, 1997).
The existing literature often reports that migrant remittances (sometimes called worker remittances) were
spent mainly on houses, education, health care, feasts, clothes, electronic gadgets, and other imported
consumption goods, while investment in productive enterprises was rare. As a result, the dominant view is that
the money migrants remit to their families is mainly spent on consumption and non-productive investments,
leading to ‘a passive and dangerous dependency on remittances’ (Haas, 2005). However, Haas describes
this as a ‘migration myth’ and argues that there is increasing evidence that this pessimistic perspective is
founded on a rather poor empirical and analytical basis (see also Hugo, 2003 and 2006).
Piper argues that the use of remittances for consumption and other so called non-productive investments
should be viewed from a broader social development perspective, relating to issues of education, health,
social welfare, political participation and the link between social development and democratisation of
human relations (Piper, 2005: 10). In Piper’s view, the term ‘investment’ should not be narrowed only to include
productive investment, as use of remittances for health, education, and nutrition expenses also constitutes
an important form of investment.
GarcÍa and Paiewonsky (2006:4) maintain that the focus on ‘productive use’ ignores the emotional, symbolic
or communal value of other types of investment. Some other studies highlight the need to consider local
views and conditions in order to understand migrants’ own perceptions of what constitutes productive and
non-productive investment (Asis et al., 2004; Gamburd, 2002; RamÍrez et al., 2005).
Importantly, the debate over productive and non-productive use of remittances has not considered the gender
dimensions of investment. As Mahler and Pessar (2006:27) note, gender ‘seeps subtly into a seemingly neutral
notion of ‘productive’ versus ‘unproductive’ uses of remittances’. Investment decisions differ across gender
lines. In particular, women are less likely than men to invest in risky assets (see Sunden and Surette, 1998). In
the Indonesian context, risky investments include transport businesses (e.g. buying motor cycles to rent out,
which is common in Indonesia), irrigation equipment, agricultural products, and opening grocery shops.
Broadly speaking, investment can be in ‘physical capital’ or ‘human capital’ (Salomone, 2006: 14). Physical
capital investments can be fostered by migrants themselves or by their households. Such remittances can
enhance entrepreneurship in the recipient country if they are directed to housing, construction, agricultural
production and technology and so on (Salomone, 2006). Lindstrom (1996) identifies two uses of remittance
that can be considered as economic investments: ‘fixed capital assets’ and ‘productive assets’. The motivation
for investment in fixed capital assets, for example land, loans or fixed deposits in banks, comes from the belief
that these can be sold in the future without a loss, and preferably with some gain. Investment in productive
assets, for example farmland, livestock, tractors, or irrigation equipments, generates income over the long
term to satisfy future income needs.
In the current study, the household survey examined whether recipients had ever used remittances for
investment in productive assets.22 Of the forty households, 17 (or 43 percent) had invested remittances in
productive assets, while 22 (or 55 percent) had not (Table 5.5). The most common area for such investment
was irrigation, followed by food production and small shops. This analysis does not explore how macro-
economic policies, especially investment policies, structure the incentives to engage in productive activity, 27
or how women and men relate with or react to these policies. This could be an area for further research.
Table 5.5 Investment in Productive Assets
No of Cases No of Cases
Investment Areas of Investment

(n=40) (n= 17)
Yes 17 Irrigation 10
No 22 Food production 3
Missing data 1 Small shop 3
Transport 1
Sex of investors
(n=17)
Male 9
Female 8
Investment in ‘human capital’ is fundamental especially from an ‘endogenous growth perspective’, that is,
‘relaxing liquidity constraints would impinge on human capital formation’ such as better education, health,
quality of life, improved gender relations, and empowerment of women (see Salomone, 2006). Remittances
The question asked whether there had been any investment in productive assets, not whether this was one of the top three uses
22
for remittances, so the data is not comparable to that in the earlier tables.
enable families to improve their diets, secure higher quality housing, dress better, and afford better medical
treatment.
Overall, the remittances in this study were mostly used for human and physical capital improvement. Such
investments in human and physical capital improvement have far-reaching development implications for
migrant households in particular, and for their communities and country in general.
5.4 Remittances and Family Dynamics in Indonesia

The existing literature on migration’s impact on the Asian family is fairly robust23. Significant findings from
this literature include: migration leads to moderate changes in gender roles within families; migration acts
as a vehicle for upward social mobility; families adjust well in the absence of male or women migrants;
the education, health care, and quality of life of migrant families improves; the women left behind take on
the roles previously assumed by the men; and the children left behind learn to be more independent in
the migration process. Some negative impacts are also reported, including misuse of remittances; broken
families; and lack of parenting for children.
In the Indonesian context, Hugo identifies that migration affects family structure and composition; marriage
and divorce; intergenerational and intra-familial relationships; care of children and the aged; the economic
situation of the family; the role and status of women; and power relationships in the family (Hugo, 1995,
2002, 2003, 2006). Migration tends to have a very positive economic impact on the family—remittances
provide a source of income to families, and the extended families function as information and resource
28 networks that facilitate permanent relocation by decreasing financial hardship and culture shock. Migration
in some situations has also resulted in an improvement in the situation of women within the family and within
the community. However, migration can be a disempowering process for women (Hugo 1998, 1996, 2000,
2004).
The current study explored the impact on the families when the women migrants became the principal
economic providers of the households. Did it improve the status of women migrants? Did the family members
left behind have more respect for the women working overseas? Did remittances increase household decision-
making power for women migrants and recipients of remittances? These questions need a detailed study
of gender differentiated patterns of remittances and family dynamics, clearly too big a task for this report,
which focuses on control over remittances and family relations.
The control over the management of remittances, especially when the domestic workers are away, is crucial
in understanding the way they are seen by the families left behind. On average, two-thirds of respondents
across the three countries reported that they decided how remittances would be managed back home.
However, 25 percent of domestic workers also reported that there had been cases where the recipients
of the remittances had overlooked their wishes (Table 5.6). In contrast, in the household survey only half the
recipients of remittances reported following the wishes of the domestic worker all, some or most of the time
(Table 5.7). Thus, despite being the earners and senders of the remittances, domestic workers do not have
exclusive control over the management of these funds.
For example Asis, 2000, 2003, 2006; Erman, 1998; Emilio et al., 2005; Semyonov and Gorodzeisky, 2005; Tyner, 2002; Zlotnik,
23
1995; Gunatilleke, 1992; Foster, 1995; Pflegerl, 2003; Gamburd, 2002; Hugo, 2002; Zachariah et al., 2001; Islam, 1991; Asis et al.,
2004; Rodenburg, 1997.
Table 5.6 Remittances and Family Dynamics: Domestic Worker Survey

Questions SAR
% (n=20) % (n=20) % (n=20) % (n=60)
Do you decide how remittances will be managed back home?

Yes 55 85 60 67
No 35 10 20 22
No comment 10 5 20 11
Is there any case of overlooking your decision regarding

management of remittances?
Yes 45 0 30 25
No 55 90 30 58
No comment 0 5 25 10
Do not know 0 5 15 7
If there is a disagreement between you and your family on

how to manage remittances, whose decision is final?
Interviewees (domestic workers) 60 70 70 67
Families 20 20 0 13
It depends 15 10 20 15
No comment 5 0 10 5 29
Table 5.7 Remittances and Family Dynamics: Household Survey
(n=40)
Question % Question %
If the domestic migrant wishes her How do male members of the family now
remittances to be spent in a certain view the women migrant worker in terms of
way, do you follow her wishes? respect for her work and contribution?
All the time 18 Male members respect her more 60
Most of the time 10 No change in attitude 20
Sometimes 23 Male members respect her less 5
Do not follow her wishes 48 No comment 5
Missing data 3 Missing data 10
As the recipient of remittances, do you How do female members of the family now
now have more influence on decision- view the women migrant worker in terms of
making in the family? respect for her work and contribution?
More influence 38 Female members respect her more 75
No change in influence 58 No change in attitude 15
Less influence 3 Female members respect her less 0
No comment 3 No comment 10
A change in attitude toward domestic workers overseas was found in the household survey. This varied
across gender lines, with 60 percent of the respondents reporting that male members of the family had
increased respect for their female members overseas, compared to 75 percent reporting increased respect
among female members of the family.
Although the experience of women migrants was mixed, female recipients of remittances tended to report
that their influence on family decision-making had increased. Around 38 percent of respondents reported
increased influence on family decision-making, while 58 percent reported no change (Table 5.7). Many of
those reporting no change were males and already headed the family (e.g. fathers, husbands), so it is not
surprising that the remittances did not lead to a change in their influence.
Access to remittances and, more importantly, the power to manage them in a situation of scarce family
resources can improve women’s ability to express and exercise their choices, although this often benefits
female recipients more than the domestic workers themselves. In this way, remittances contribute to the
improvement of status of women in migrant families or households. However, more in-depth research is
needed on the power and authority structure in the migrant households.
30
Policy Recommendations
6. POLICY RECOMMENDATIONS
Remittances can bring new opportunities for a better life and greater gender equality, both for those
migrating and for those left behind. However, policy interventions to maximise the value of remittances are
required to enhance the development impact. Recent literature has focused extensively on how to reduce
costs of remittance transfers and leverage the development potential of remittances24. In the light of the
findings of this study and the existing literature, this section proposes some gender-sensitive ways to reduce
transaction fees on remittances and leverage their development potential in Indonesia. Although discussed
in the context of Indonesia, many of the proposals would be relevant to other countries which have large
outflows of women migrants.
6.1 Reducing Transaction Fees of Remittances

The literature almost unanimously identifies ‘competition’ as the single most important factor in reducing the
transaction costs of remittance transfers. This report suggests creating a more competitive environment in
Indonesia by encouraging more national and international players to provide remittance services. There is
also a need to expand the access to clearing and settlement systems and to adopt new technologies which
are gender-sensitive and will provide greater efficiency, lower costs and extended outreach. Additionally,
the governments of both host and home countries, international organisations, migrants’ associations, and
micro-finance institutions should coordinate initiatives to reduce the transaction costs. However, it should be
clearly understood that migrant remittances are primarily personal and private transfers, not commercial
or public transfers.
31
The report suggests promoting good practice in remittances. In the line with IFAD (2006), good practice in
remittances include: greater availability and access to remittances in rural areas; more options for linking
remittance services and access to other financial services such as savings, credit and insurance; transparent
service fees and costs in remittance transactions; and solutions that minimise transaction costs.
There has been an emergence of mobile banking and transfer services worldwide, and these are already
being used in countries such as the Philippines, Kenya and Uganda. This report proposes the introduction of
two gender-friendly remittance transfer tools which are not currently available in Indonesia: mobile-to-mobile
remittances and card-based remittances. These two methods of remittance transfers have the potential not
only to reduce the fees for remittance transfers but also to make remittance transfers convenient and fast
for both male and female remitters and recipients of remittances.
6.1.1 Mobile-to-Mobile Transfer Services

In mobile-to-mobile money transfer services, senders remit money by using their mobile phone at any time
of the day. Such ‘mobile banking’ can provide an important alternative to cash in pre-dominantly cash-
based economies, replacing brick-and-mortar infrastructure such bank branches and ATMs. It also brings a
type of financial intermediation to underserved populations in urban and rural areas. The two methods of
delivery which predominate in Africa and Asia are SMS text messaging and SIM chips embedded directly
in the mobile phone (Migrant Remittances, 2007).
See ADB, 2006; World Bank, 2006; Ratha, 2003, 2004, 2007; Agunias, 2006; Alarcon et. al., 1998; Orozco, 2003, 2004, 2005;
24
APEC, 2003; Buch and Kuckulenz, 2004; Buencamino and Gorbunov, 2002; El Qorchi, 2003; Hernandez-Coss, 2005a, 2005b;
ADB, 2004; O’Neil, 2003; Addy et al., 2003; Freund, 2005.
Mobile-to-mobile transfer services are convenient, gender-friendly and cheap. In the Phillipines, for example,
a service operated by Maxis Communications Berhad and the Philippine’s telecommunications company
Globe Telecom allows customers to transfer up to RM500 per transaction at RM5 per transaction and 15
cents for each SMS, which is half the transaction fee of banks. Up to RM10,000 can be transferred per day
at no charge to recipients (AMN, 31 May 2007).
Mobile-to-mobile transfer services are particularly important for Indonesia because mobile telecommunications
have reached the remote rural areas. Currently, there are a total of 75 million subscribers in Indonesia. By
2010, the number of mobile phone users is predicted to reach 122.1 million, up from 66.5 million in 2006
and 46 million in 2005 (The Jakarta Post, 15 June 2007).
However, the question of disbursement must be addressed. In the Philippines this has been solved by
linking up with other already established infrastructure, such as Globe’s G-Cash 6,000 outlets, rural banks,
pawnshops and retail outlets. In some places, recipients can pay for purchases and tuition fees without
even withdrawing the cash. Indonesia could undertake similar initiatives to serve the millions of migrant
workers and their families.
Once the market is opened for mobile-to-mobile transfers, many entrepreneurial activities will come into
being to serve the demand. For example, in Kenya, some entrepreneurial customers even operate ‘human
ATMs’ providing cash for a small fee. Compared to going to a bank, many recipients will be able to save
time and expenses if they can cash out their remittances in the neighbourhood through ‘human ATMs’; pay
32 bills; or purchase irrigation equipment, seeds or other agricultural and industrial products from stores.
6.1.2 Card-Based Remittance Transfers

Prepaid card-based remittance transfers are emerging as another solution for international money transfers, and
have been particularly popular in the remittance corridor between North America and Latin America. Card-based
remittance services can make remittance transfer cheap, fast and convenient for both domestic workers and their
recipient families, and suit the needs of domestic worker families who are largely from the low-incomes groups.
The prepaid card market includes a variety of products, ranging from traditional gift cards to the more recent
reloadable branded spending and payroll cards. A variety of models have developed:
• Card-to-cash model: recipients do not need to have a card of their own, and can retrieve the transferred
funds directly in cash. Establishing partnerships with banks and other entities in the recipient country
can make the model effective.
• Dual-card model: two cards with access to the same account are provided. One is transferred to the
recipient side and the other is kept with the sender. The sender can add cash whenever needed and
the recipient can draw cash from ATMs.
• Recipient-only card model: the sender purchases a prepaid debit card and sends it to the recipient
for their use (for details, see Orozco et al., 2007).
Many of these card-based remittance models are already available in the host countries studied. Indonesia
could coordinate with these host countries and make the necessary arrangements at the government level
to include Indonesia within the coverage of these cards. A regional approach to card-based remittance
transfers could also be pursued, using ASEAN as a platform.
However, card-based remittance services have difficulty in covering the remote places in Indonesia due to
the absence of rich disbursement networks (e.g. ATMs, poor banking infrastructure)—a situation not unique
to Indonesia25. One way to solve this problem is to use branded credit cards (e.g. MasterCard and Visa), as
discussed in section 6.2.3 below.
6.2 Leveraging Remittances for Development

‘Remittances should not be directed to government programmes and official agencies monitoring
remittance use should not infringe on individual privacy. Government should enhance the
opportunities for private citizens—through appropriate regulatory and policy incentives—to
make productive use of remittances’ (Inter-American Dialogue, 2007).
Acknowledging the private nature of the remittances and recognising that excessive intervention may
risk destroying the benefits of remittances, this report suggests a gender-sensitive and incentive-based
‘light-handed’ approach covering four areas: (i) specific programmes, (ii) financial intermediation, (iii) credit
card-based remittances and (iv) promotion of NGO-based development activities at the migrant source
villages.
6.2.1 Specific Programmes

In this study, only 60 percent of the Indonesian domestic workers had bank accounts in Indonesia. Measures
should be taken to ensure that all female (and male) migrant workers leaving the country do have saving
accounts with banks in Indonesia. On the basis of this relationship, other forms of financial relationship (e.g.
selling of financial products) could then be advanced. The report also proposes consideration of five specific 33
measures: (i) a ‘special category of deposit accounts’; (ii) matching funds; (iii) loan schemes for prospective
migrants; (iv) generation of saver-rentiers; and (v) micro-finance which are explained below:
A special category of deposit accounts should be designed for migrant workers with facilities to save cash
directly from overseas. The interest rates for these accounts should be higher than ordinary accounts so that
migrant workers find them economically rewarding.
Matching funds are usually seen in Latin American countries (e.g. Mexico and El Salvador), whereby remittances
are organised and sent collectively by migrant organisations such as Hometown Association (see Goldring,
2004). In this scheme, receiving country governments usually contribute partially to the total amount. For
example, the governments in Mexico and El Salvador allocate $2 or more for every dollar that migrant
organisations remit back to their communities (see Agunias, 2006). The remittances are used for community
development programmes in the migrants’ communities of origin. Goldring (2004) notes that collective
remittances generate more developmental outcomes, especially in the context of community development,
than individual remittances or person-to-person remittances.
In this study, although some of the Indonesian domestic workers in Hong Kong SAR did collaborate to save
and remit money for community development at home, this was initiated at the individual level. What this
report is proposing is that the Government of Indonesia encourage collective remittances by offering financial
25
Bank Rakyat Indonesia’s (BRI) has a long-term plan to use ATMs for transfer transactions and to provide the same service to
international migrant workers in Hong Kong, Malaysia, Singapore and elsewhere (ADB, 2006).
incentives, for example by allocating two or three dollars for every dollar of collective remittances. This would
enable Indonesia to encourage some remittances to be directed towards community development.
A loan scheme for prospective migrants is especially important for Indonesia, as placement fees are quite
high and beyond the financial means of many domestic migrant workers. Indonesia has recently decided
to provide cheap loans to prospective migrant workers to help unskilled workers finance their job searches
abroad (The Jakarta Post, 31 July 2007). The earlier this loan scheme is implemented, the better it will be
for migrant workers.
Generation of saver-rentiers can be a useful policy option, especially for domestic workers (for details see
Agunias, 2006). In general, two types of ‘migrant savers’ are reported in the literature: the ‘rentier-saver’
and the ‘investing-saver’ (Saith, 1989 cited in Brown,1994: 21). Rentier-savers hold their savings as financial
deposits with banks (interest or rent-yielding asset), while investing-savers go for small businesses run on a
self-employment basis. In this study, some domestic workers showed little interest in investing because of
a fear that they may lose their savings. The migrant households were also found to be worried about the
returns from investments in their local economy. Therefore, this report proposes competitive real interest rates
for migrant workers, especially domestic workers.
Micro-finance institutions are increasingly popular form of alternative financial institution. Migrant families in
the Philippines are increasingly using micro-finance institutions for local investment. Micro-finance institutions
in Indonesia should also offer special products targeted at migrant families and extend their operations
34 across the country.
6.2.2 Financial Intermediation

Financial intermediation is “the process by which the financial intermediaries—usually banks or other similar
firms—borrow money from one source to give it to another company that needs funding, investment
or resources”26. To put it simply, financial intermediation means channelling savings into investment. The
importance of linking remittances to financial intermediation as a strategy to harness the development
potential has been stressed in recent literature (Orozco and Fedewa, 2006: 6; World Bank, 2006; ADB, 2006,
2004). This is because financial intermediation of remittance flows can offer both senders and recipients
access to asset building, which, in addition to education and health, is essential to achieving development
(see Orozco and Fedewa, 2006). The ADB has identified several development benefits that may stem from
the intersection between remittances and financial intermediation. Firstly, it increases the benefits for both
senders and recipients because it opens up opportunities to save, borrow and buy other financial services
(e.g. insurance and investments), while helping financial institutions to mobilise savings in local communities
where the money is allocated. Secondly, it works as insurance during times of crisis by helping migrant families
to reduce their dependence on foreign savings through building assets. Finally, increasing household assets
has macro-level effects for the national economy (ADB, 2006: 57).
Despite remittances being a form of foreign savings, remitters and recipients in the countries studied do not
have strong relationships with bank intermediaries (see also ADB, 2006:60). As the task of linking remittances
See, http://finance.factexpert.com/531-financial-intermediation.php
26
to financial intermediation should begin at home, Indonesia should pursue measures to connect remittance
recipients into the financial intermediaries. Some measures have already been taken by some Indonesian
banks to provide services to recipients beyond remittance-transfers, such as saving packages, certificates of
deposits, medical insurance, life insurance, housing loans and small business loans. These will play a role in
making remittances more productive. However, more pro-active policies to reach both recipients and senders
of remittances should be considered. Financial literacy should be enhanced among both groups through
special programmes targeted at recipients and domestic workers overseas. Indonesian embassies and
Indonesian airports, especially departure halls, could play a role in this financial education. Some incentive
programmes could be pursued to reach the target groups, such as waiving passport renewal fees.
6.2.3 Promotion of Credit-Card Based Remittances

Indonesia could also consider credit-card based remittances through partnership with international credit
card companies (e.g. MasterCard and Visa). Not only could credit-card based remittances reduce the costs
of remittance transfers, they could also provide extra coverage to manage risks during times of financial
hardship back home. For example, credit cards can be used to meet the need for cash beyond the usual
amount of worker remittances. Such extra cash may be used in small businesses, to pay school fees, or to buy
agricultural equipment, irrigation tools or seeds. Domestic workers in host countries would be the principal
cardholders while recipients of remittances would be optional cardholders.
There may also be negative consequences arising from credit-card based remittances, such as overuse or
non-payment of bills. However, if appropriate measures are taken to reduce these negative consequences,
they may emerge as a powerful tool for remittance-driven development initiatives. A pilot programme could 35
be pursued to test the viability of this method.
Recently, Visa International and Malayan Banking Bhd (Maybank) established a card-based transfer system
from Singapore to Malaysia (Migrant Remittances, Vol. 4, No. 3, July 2007). It is cheap and easy to manage.
In addition to cash draw, credit cards provide more choices in terms of its uses: shopping, insurance and
so on. Using credit cards to purchase goods will result in less use of cash (therefore less use of ATMs). It has
also ‘‘risk-management” effects at the migrant households discussed in the next section (Massey et al. 1993,
Stark, 1991; Hugo, 1998). However, a detailed cost-benefit analysis of credit cards as a remittance tool must
be undertaken to find out its practicality and viability in the Indonesian context.
6.2.4 Promotion of NGO-based Development Plans

Indonesian NGOs are playing a greater role in the changed socio-political environment in Indonesia.
They are more open to linking their activities to regional networks and they have become more a part
of worldwide public opinion. Leading NGOs that deal with women migrant workers in Indonesia include
Solidaritas Perempuan, LBH Jakarta, the Center for Migrant Workers, and LBH APIK (Social Justice for Women)
(see Pudjiastuti, 2003). Their activities have given impetus to the government machinery and compelled it to
devote more attention towards women migrant workers, and to formulate policies protecting and promoting
the rights and welfare of migrant workers. Although NGOs are already an important ally in promoting and
protecting the rights of women migrant workers (Pudjiastuti, 2003), they could play a much greater role,
especially in managing remittances at the micro-level. Migrant worker NGOs should be invited to develop
remittance management skills among migrant households and implement remittance-induced development
programmes in the migrant source villages.
36
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GENDER DIMENSIONS OF
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REMITTANCES: A STUDY OF
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Gender Dimension of Remittances

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Gender Dimension of Remittances

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GENDER DIMENSIONS OF

UNIFEM Asia Pacific and Arab States

Workers in East and

UNIFEM East and Southeast Asia Regional Office

2. THE INDONESIAN LABOUR MIGRATION CONTEXT ........................................................................................................... 7

4. REMITTANCE RECEIVING: INDONESIA.............................................................................................................................. 21

5. USES AND DEVELOPMENT OUTCOMES........................................................................................................................... 25

Dr. Jean D’Cunha

This study examines the following issues in the context of Asia:

• who decides where to use remittances;

FINDINGS OF THE RESEARCH

Uses and Development Outcomes

Reducing Transaction Fees of Remittances

Leveraging Remittances for Development

Asis, 2003; Abella, 1997; Anggraeni, 2006.

1.2 Migrant Remittances: a Development Tool

1.3 Engendering Remittances

Gamburd, 2002; Arif, 1999; Lopez and Seligson, 1991

Qorchi et al., 2003; Seddon, 2004; UNDP, 2005

4 1.4 Research Questions

1.5 Data Sources

1.6 Limitations of the Research

2. THE INDONESIAN LABOUR MIGRATION

2.1 Indonesian Labour Migration within Asia: an Overview

HONG KONG SAR

2.2 Remittance Flows to Indonesia

For details see http://www.immd.gov.hk/ehtml/hkvisas_5.5.htm accessed at 8.20 pm on 22 August 2007

2.3 Channels and Costs of Remittance Transfers

2.4.1 Formal Remittance Channels in Host Countries

2.4.2 Formal Remittance Channels in Indonesia

3. REMITTANCE SENDING: SINGAPORE, MALAYSIA

3.1 Socio-Demographic Profiles of Domestic Workers

http://portal.unesco.org/education/en/file_download.php/71aab5ac68977a2d997446bc8256bea3table3.8.pdf accessed at 1.41

Table 3.1 Socio-Demographic Profiles of Domestic Workers

3.2 Incomes, Savings and Remittances17

Table 3.2 Earnings, Savings and Remittances from Singapore

Monthly Earnings (US$) % Monthly Savings (US$) % Last Remittance (US$) %

to save any of their earnings.

Table 3.3 Earnings, Savings and Remittances from Malaysia

Monthly Earnings (US$) % Monthly Savings (US$) % Last Remittance (US$) %

Monthly Earnings (US$) % Monthly Savings (US$) % Last Remittance (US$) %

3.3 Channels of Remittances Used

Table 3.5 Channels of Remittances Used in Last Transfer

Formal (banks, post office, MTOs etc) 95 80 65 80

Singapore Malaysia Hong Kong Total

Only formal channels 90 85 55 77

3.4 Relationships with Financial Institutions

Table 3.7 Relationships with Financial Institutions: Host Countries

Singapore Malaysia Hong Kong Total

Table 3.8 Relationships with Financial Institutions: Indonesia

Singapore Malaysia Hong Kong Total

3.5 Gender-Differentiated Patterns in Earnings, Savings and Remittances

4. REMITTANCE RECEIVING: INDONESIA

4.1 Socio-Demographic Profiles of Households

Table 4.1 Socio-Demographic Profiles of the Migrant Family

Person interviewed Country of work

Importance of remittances for Marital status

4.2 Remittance Recipients

Table 4.2 Remittance-Receiving: Household Survey

Recipients of remittances Frequency of remittances (in last 3 months)

Sex of recipients of remittances Channels of remittance

Amount received in last transfer Formal channels used

4.2.2 Domestic Worker Survey in Host Countries

Table 4.3 Remittance-Receiving: Domestic Worker Survey