1Due to various external and internal factors, informal trade and human flows are significant at cross-border areas of Myanmar, especially at the borders with China and Thailand. Although several studies have focused on border areas from the side opposite Myanmar, there are very few studies made on the Myanmar side mainly due to the difficulty of research. Besides, lack of proper information and data lead to a situation where misunderstandings, mismatches, and controversies often occur between what happens inside Myanmar and what it is perceived or concluded outside. This paper is based on empirical research findings of surveys conducted on various stakeholders at two cross-border areas bordering on China and Thailand and also at other areas in Myanmar. This paper focuses mainly on case studies, interview surveys, focus group discussions, and questionnaire surveys of various stakeholders such as local authorities, traders, brokers, facilitators, returned migrants, migrants’ families, and other informal players at the two cross-border areas, as well as an area that is on the way to two active cross-border areas, with a view to study informal/illegal movement of goods and persons and associated costs and benefits.

2In the trade sector, Myanmar achieved a positive trade balance of US$777 million in 2002–03, which increased to US$3.06 billion in 2007–08 due to growth of natural gas exports to Thailand. The average share of external trade in Myanmar’s GDP during the five years from 2003–04 to 2007–08 was 22.6 percent. External trade has been a major foreign currency earner since foreign direct investment was marginalized after 1997, when the Asian financial crisis broke out and the first economic sanction (then mainly on investment) was imposed by the United States.

3As a result of factors such as the external economic sanctions, the internal licensing system, inadequate trade promotion, and absence of value-added industries, Myanmar’s total trade value is very low compared to those of other countries in the Greater Mekong Subregion, like Thailand and Vietnam. The value of Myanmar’s total exports in 2009 was only 3.8 percent that of Thailand and 10.1 percent that of Vietnam, but was 135.6 percent that of Cambodia and 546.0 percent that of Lao PDR (UN Comtrade). The main destinations of Myanmar’s exports are Thailand (accounting for 47.3 percent of Myanmar’s total export value), India (20.1 percent), China (11.0 percent), and Japan (5.8 percent). Myanmar imports products primarily from China (accounting for 35.7 percent of total imports), Thailand (24.4 percent), Singapore (14.1 percent), Korea (6.4 percent), and Malaysia (3.3 percent).

4Since Myanmar is well-endowed with natural resources, resource exports account for over 70 percent of the total value of exports, and the majority of resources, mainly timber and gemstones, are informally traded. The exception is natural gas, accounting for nearly 50 percent of the total value of exports, which is exported legally through cross-border pipelines. Since economic sanctions were imposed by the West, Myanmar’s cross-border trade with its neighboring countries has become more significant and informal practices have proliferated at the border areas. Among the cross-border areas, informal trade is most significant in Muse (bordering on Ruili, China) and Myawaddy (bordering on Maesot, Thailand).

5These informal practices facilitate formal as well as informal movement of goods, leading to the situation where the value of undocumented goods, which mostly flow through cross-border areas, reached over US$1 billion in 2006, highlighting the significance of informal trade in Myanmar. These informal channels for the movement of goods are also found to be safe havens for informal migration, making trade flows and human flows associated with each other to some extent.

6In terms of human mobility, the informal flows of migrants from Myanmar to Thailand are found to be much higher than those to China. There are many cross-border points along the porous borders. Among those points, Bamar (the majority population in Myanmar), Mon and Karen (ethnic groups living in the southern part of the country), and people from Taninthari Division normally take the informal channel through Myawaddy (bordering Maesot, Thailand) and Kawthaung (bordering Ranong, Thailand) whereas most Shan (an ethnic group living in the eastern part of the country) choose different cross-border points, for instance, at Tachileik (bordering Mae Sai, Thailand) and Muse (bordering Ruili, China). Due to many external and internal factors discouraging formal/legal practices, informal practices can be found in all these cross-border areas. Thailand is the largest recipient of Myanmar migrants, with approximately 2 million migrants. Malaysia, the second largest recipient, has received between 0.5 and 1 million Myanmar migrants. The remaining migrants are dispersed in other destinations such as Singapore, Australia, the United Kingdom, the Middle East, Korea, and Japan. Malaysia and Thailand are the main destinations for most unskilled and semi-skilled workers from Myanmar, whereas Singapore, Australia, and the UK are key destinations for Myanmar students. The Middle East, Korea, and Japan attract Myanmar workers with a higher skill level.

7Due to regional integration and the wide economic disparity between Myanmar and other countries (including neighboring Thailand), migration from Myanmar to other countries is likely to increase. Hence, it is necessary to ensure that migration takes place in a safe and secure manner to maximize its positive effects for both the home and recipient countries and to minimize the possible negative impacts.

8Approximately 2 million Myanmar people, most of whom are illegal laborers, live in neighboring Thailand alone, highlighting the significance of informal human flows from Myanmar. It is estimated that around 10 percent of Myanmar’s 55 million people have been out of Myanmar, highlighting the significant degree of mobility. Due to requirements associated with formal channels of mobility, use of informal practices through border routes1 and normal routes2 has soared and migrants who have gone through informal channels are vulnerable to various abuses, creating social problems both in the country of origin and the destination countries.

9The majority of migrants going to Thailand and China take informal border routes through social networks and/or brokers. Those taking informal channels of trade are often smuggled in trucks carrying goods. Depending on the amount of payment made to the brokers, means of transportation for migrants going to Thailand vary greatly. They may have to travel on foot, taking about seven days to reach a safe place where there is no checkpoint, or be transported by truck or private vehicle.

10Analysis of migration in Myanmar reveals that a major impetus of migration from Myanmar is to maximize income as indicated in neoclassical economics. However, this economic-based migration decision is not made by individuals, but, in most cases, by families as a whole as described in the “new economics of migration theory”. In some areas, risk diversification is a main purpose of the family’s decision as explained by the “new economics of migration theory”. However, in other areas, income maximization is a main objective in accord with neoclassical economics. In contrast with the “dual labor market theory”, both pull and push factors play important roles in migration. In contrast to the “world-systems theory”, migration flows from Myanmar are related, to some extent, to differentials in wages and employment.

11Although both pull and push factors are important, the former play a more significant role. Some significant push factors include low investment and employment opportunities and low socio-economic status within the country of origin (that tend to encourage forced economic migration). The main pull factors that encourage simple economic migration through various informal channels include migration of friends and relatives, better socio-economic status of neighboring migrants’ families/households, etc. However, the heightened socio-economic status of migrant’s families (who live in the sending communities) that has been inspiring young people in sending communities to migrate may also be interpreted as a push factor. Significant flows of cross-border migration in some areas then trigger internal migration to replace the lost workforce. Due to high costs associated with formal channels of migration, the majority of people from the study areas (where there are people who have established social networks in Thailand and China) choose to take informal channels to get into the destination countries. As a result, migration tends to have both positive and negative effects on the country of origin, the destination countries, and migrants’ households.

12Although informal activities, ways, and channels are rampant, there has not been much proper study or literature on them and as a result, appropriate policy measures cannot be developed mainly due to lack of proper analysis of cause and effect and of costs and benefits. Hence, this paper aims not only to study the informal and illegal activities related to trade and human flows in Myanmar’s active cross-border areas but also to analyze their causes and effects, costs and benefits, and policy implications.

1 - Objective

13The objective of the paper is to identify informal activities in trade and human flows between Myanmar and China, and Myanmar and Thailand, and the factors behind these activities with a view to discovering ways to develop appropriate policy measures, not to crush informal activities but rather to facilitate and convert them into formal ones that could contribute in a positive way to economic and social development.

14The paper attempts to answer several questions. What are informal practices in the movement of goods and persons? What legal framework and policy measures exist related to cross-border trade and cross-border migration (including trafficking in persons)? What are the main causes and effects of informal practices and activities? What are the consequences (costs and benefits) of these practices and activities? What policy measures should be appropriate to convert these practices into formal, legal, and ethical practices that can contribute in a positive way towards economic and social development?

2 - Methodology

15The main methodologies applied for this research include

• case studies;
• interview surveys;
• focus group discussions; and
• questionnaire surveys.

16The research focused more on case studies and qualitative analyses, although some quantitative analyses were conducted to back up qualitative findings.

17Impacts were analyzed through case-control analysis. While stratified sampling method was applied in selecting study sites, random sampling method was applied in selecting general samples and/or case and control samples in each selected study site. When control samples were necessary, they were acquired from the same area as where case samples were selected or from an area where socio-economic conditions were similar to those where case samples were selected.

18Since the study focused on informal cross-border movement of goods and persons between Myanmar and its neighboring GMS countries, two study sites (Muse and Kawthaung) where informal activities facilitating the informal and illegal movement of goods and persons are active, and one study site (Zinkyeik in Mon state) that is a major source of informal and illegal movement of persons to Thailand, were selected.

19Muse is located in the northeastern part of Myanmar bordering Ruili, China; Kawthaung is located in the southern part of Myanmar bordering Ranong, Thailand; Zinkyeik town is situated in the southern part of Myanmar, which is a major source of informal Myanmar migrants going to Thailand, and is located on the way to two crossborder areas (Myawaddy and Kawthaung). The first two sites were selected with a view to study the informal movement of goods and persons and also to identify informal practices facilitating such informal movement. The third site was selected mainly to find out the impacts of informal movement of persons on their left-behind families.