Executive Summary 1 Public Disclosure Authorized Public Disclosure Authorized Pacific Labor Mobility, Public Disclosure Authorized Migration and Remittances in Times of COVID-19: Interim Report Public Disclosure Authorized 30 November 2020 Dung Doan Matthew Dornan Kenia Parsons Kirstie Petrou Soonhwa Yi Executive Summary 3 LIST OF ACRONYMS 4 ACKNOWLEDGEMENTS 6 EXECUTIVE SUMMARY 8 1. INTRODUCTION 12 2. THE ECONOMIC IMPACTS OF COVID-19 14 3. THE PACIFIC DIASPORA 19 3.1 Pacific Islanders in Australia 21 3.2 Pacific Islanders in New Zealand 26 3.3 Pacific Islanders in the United States 30 3.4 COVID-19 Impacts on the Pacific Diaspora 32 4. SEASONAL WORKERS 35 4.1 Employment, Earnings and Savings 37 4.2 Remittances 41 4.3 Superannuation, Expectation and Satisfaction with Labor Mobility 46 5. DISCUSSION 48 5.1 Remittances to the Pacific in Times of COVID-19 49 5.2 Outlook for Labor Mobility and Remittances 53 5.3 Policy Recommendations 54 6. CONCLUSION 57 REFERENCES 59 Executive Summary 4 LIST OF ACRONYMS List of Acronyms 5 CNMI Commonwealth of the Northern Mariana Islands EPS Employment Permit System FCI Finance, Innovation and Competitiveness FNPF Fiji National Provident Fund FSM Federated States of Micronesia GFC Global Financial Crisis ILO International Labor Organization IMF International Monetary Fund LFSP Labor Force Status LMIP Labour Market Information Portal MTI Macroeconomic, Trade, and Investment NHPI Native Hawaiian and Other Pacific Islanders OECD Organisation for Economic Co-operation and Development OTC Over-the-counter PICs Pacific Island Countries PLS Pacific Labour Scheme PNG Papua New Guinea RMI Republic of the Marshall Islands RSE Recognised Seasonal Employer SPJ Social Protection and Jobs SWP Seasonal Worker Programme Executive Summary 6 ACKNOWLEDGEMENTS Acknowledgements 7 This report is part of a broader analytical work The surveys were implemented by a team of program on labor mobility in the Pacific that the consultants led by Dung Doan that included World Bank has been undertaking with financial Crystal Ake, George Carter, Glenn Finau, Patricia support from the Australian Department of Foreign Fred, Robyn Kingston, Teaiaki Koae, Felix Maia, Affairs and Trade. The report brings together Vani Nailumu, Randall Prior, Aoniba Riaree, Seini analysis of both existing data and primary data Toufa, and Telusa Tu’I’onetoa. The interviews were collected through a series of phone-based conducted by Kirstie Petrou. quantitative surveys on Pacific seasonal workers, The authors would like to thank Carlo Corazza their households and employers, as well as (Senior Financial Sector Specialist, World Bank), qualitative interviews with representatives of Pacific Mauro Testaverde (Senior Economist, World Bank), diaspora groups in Australia and New Zealand. The Kristen Himelein (Senior Economist, World Bank), report also draws on ongoing analyses undertaken Ganesh Kumar Seshan (Senior Economist, World by the Social Projection and Jobs Global Practice Bank), Kim Edwards (Senior Economist, World (GP); the Finance, Innovation and Competitiveness Bank), and the Australian Department of Foreign GP; the Macroeconomic, Trade, and Investment GP; Affairs and Trade for constructive comments and and the Poverty and Equity GP. Section 2 draws on advice on earlier drafts of the report. analysis undertaken by the study team as part of another study, titled “Pacific Island Countries in Philip O’Keefe (Practice Manager until September the Era of COVID-19: Macroeconomic Impacts 2020) and Yasser El-Gammal (Practice Manager, and Job Prospects”. World Bank) provided overall vision and guidance to the team. The team is also thankful for The team would like to thank those who took part in administrative support from Jeremy Webster the surveys and interviews. The implementation of (Team Assistant, World Bank), technical support the surveys and interviews benefited from valuable from Shamita Afrin, Praveen Chakkaravarthy, Rigel support from the Fijian National Employment Colina, and Jane Hume of the Sydney IT Help Centre, i-Kiribati Ministry of Employment and team (World Bank), as well as helpful advice from Human Resource, Tongan Employment Division Hamish Wyatt (External Affairs Officer, World Bank). of the Ministry of Internal Affairs, Timor-Leste The report was copy edited by Angela Takats and Embassy in Australia, ni-Vanuatu Department graphically designed by Heidi Romano. of Labour, Australian Department of Education, Skills and Employment, Australian Department of The cover image is from the Pacific Labour Foreign Affairs and Trade, New Zealand Ministry of Mobility Program album in the photo gallery Foreign Affairs and Trade, New Zealand Ministry of of the Australian Department of Foreign Affairs Business, Innovation and Employment, Approved and Trade, licensed under Creative Commons Employers of Australia, Horticulture New Zealand, (https://creativecommons.org/licenses/by/2.0/ New Zealand Apples and Pears, and Uniting Church legalcode) and accessible at https://www.flickr. in Australia. Leisande Otto (Liaison Officer, World com/photos/dfataustralianaid/38738509150/in/ Bank) and Akka Rimon (Liaison Officer, World album-72157690967086312/. The image has been Bank) provided valuable assistance to facilitate cropped to fit the dimension of the cover page. the implementation of the surveys on ni-Vanuatu and i-Kiribati workers. The team is also thankful for helpful comments on the survey questionnaires and support to contact potential respondents from the Development Policy Centre at The Australian National University. Executive Summary 8 EXECUTIVE SUMMARY Executive Summary 9 Pacific Island countries (PICs) are projected to The crisis has caused broad-based and significant experience a significant economic downturn in reductions in employment and earnings among 2020 due to the COVID-19 crisis, mainly driven Pacific seasonal workers. Close to two-thirds of by sharp declines in tourist arrivals, disruptions workers under the SWP and RSE schemes have to donor-financed infrastructure activities, lower experienced fewer work hours and lower weekly commodity prices and lower remittance inflows. earnings as compared to the period of January and The impact of the pandemic on tourism, which February, according to a phone survey undertaken many PICs rely on, is expected to be five times as part of this study. Among those reporting a larger than that of the 2008 Global Financial Crisis. decrease in income, the average reduction in their The GDP of PICs is expected to shrink significantly weekly earnings was 50 percent (or $A 400) among in 2020, accompanied by unprecedented job SWP workers and 48 percent (or $NZ 364) among losses. Fiji, Samoa, Tonga and Vanuatu are RSE workers. Facing income losses, stranded expected to see double-digit contraction at seasonal workers have been largely unable to -24.7 percent, -12.5 percent, -15.1 percent and access formal social protection systems in host -13.1 percent, respectively; while the GDP of countries while being cut off from safety nets Solomon Islands is projected to fall by 7.7 percent. at home. Further downside risks to growth remain as fiscal Pacific Islanders working under longer-term visas gaps widen. also faced significant risks of employment and COVID-19 has also disrupted labor mobility from the income losses due to the impacts of COVID-19. Pacific and introduced critical challenges to Pacific In all three main host countries – Australia, New migrant workers and the economies that their Zealand and the US – Pacific workers are employed remittances support. Many Pacific workers find in occupations that are predominantly low- and employment in Australia under the Seasonal Worker semi-skilled, with high physical proximity and Programme (SWP) and Pacific Labour Scheme limited capacity to work from home. This makes (PLS), and in New Zealand under the Recognised them particularly susceptible to the effects of the Seasonal Employer (RSE) Scheme. In Samoa, pandemic and associated public health responses. Tonga and Vanuatu, seasonal workers under these Economic hardship among Pacific diaspora groups, schemes account for 6.0 percent, 14.7 percent documented through recent World Bank interviews and 8.1 percent of the workforce, respectively. of diaspora representatives in Australia and New They engage primarily in low-skilled jobs in the Zealand, has been compounded by limited access agriculture sector under short-term contracts of to social protection measures due to migration 6-11 months. International travel restrictions aiming status, language barriers that make accessing to curb the spread of the pandemic have left available assistance difficult, and larger households thousands of seasonal workers stranded in Australia among several Pacific Island groups. and New Zealand while halting the arrivals of new In addition to detrimental economic impacts, the workers under such schemes. At the same time, crisis has caused mental distress among Pacific the Pacific diaspora, concentrated in Australia, migrants, both seasonal workers and members New Zealand and the United States, has been of the diaspora. Concerns and anxiety related to affected by adverse labor market conditions in employment, visas, repatriation uncertainties and those countries. the welfare of family back home were reported as major issues faced by seasonal workers. The diaspora also reported a higher risk of family conflict and gender-based violence due to social distancing measures. Executive Summary 10 Although more resilient than expected, remittances