For Burmese migrants living in Singapore, the small grocery shops in the Peninsula Plaza are the place to go for the tastes, sounds and sense of home. Shelves are laden with traditional Burmese staples such as pickled
tea-leaf salad, pungent spices, felt-and-leather flip-flops and ladies' batik sarongs. Those hankering for their military-ruled country's tightly-controlled pop culture can buy Burmese astrology and celebrity magazines, books, movies, music CDs and - astonishingly - the privately-run but heavily-censored weekly news journals now in vogue in Rangoon.
But while clearly a powerful magnet, the Peninsula Plaza's Burmese shops are not primarily in the business of fulfilling migrants' nostalgic longings. Instead, those who flock to the tatty downtown mall each weekend have another important purpose: to transfer a portion of their Singaporean
earnings to needy families back home.
In a steady flow, young workers - from electricians to engineers - hand over wads of Singaporean dollars and leave, not with bagfuls of groceries but with anonymous-looking receipts recording sums deposited, and names
and addresses of intended recipients in Burma. Indeed, these seemingly humble businesses - working through counterparts inside Burma - will deliver the equivalent amount of Burmese kyat, the local currency, to the designated recipients, usually
within a day or two and sometimes right to the beneficiary's front door.
For many of Burma's 52m people, funds from relatives working overseas are crucial for their basic survival. In an economy crippled by the junta's mismanagement and western sanctions, jobs are scarce and neither salaries nor pensions keep pace with spiralling inflation. "My parents live on
this," says a 30-something engineer as she entrusts a small shop with Sing$200 ($131) for her parents in Rangoon.
Migrants have no real guarantee that these tiny unregulated operators and will send the money to its intended destination. "You trust, you send," one moneyman, operating from a store selling Burmese books and CDs, told the Financial Times. "You don't trust, you don't send."
But send they do - with each individual remittance a small act of defiance against an authoritarian regime that seeks to control every aspect of the economy - and especially access to, and use of, foreign currency. Money sent via this underground system helps finance the purchase of essential
goods for Burma's population, bypassing import restrictions intended to conserve foreign exchange for the junta's priority items, such as military hardware.
"It allows people a degree of freedom from the state," says Sean Turnell, a Macquarie University economics professor. "If this money had gone through the formal banks, there would be all sorts of restrictions about the timing, the amounts, and in what form people could withdraw it."
Dependence on migrant remittances is a common theme among the world's most crippled, tightly controlled economies. Pyongyang, for example, exports labourers and keeps their salaries to fill its own coffers, though some North Koreans are working illegally in China and sending money home to
families. Zimbabwean migrant workers in South Africa earn money that allows them to bypass currency controls and send much-needed goods back home, where everything from food to fuel is in desperately short supply.
Burmese migrants generally steer clear of state banks, which technically are supposed to monopolise international banking services, and instead get their money home through a system known as hondi - derived from a Sanskrit word meaning "to collect". Operating all over Thailand and Malaysia, as
well as in Singapore, Australia, the US and, indeed, any place where people from Burma live, hondi brokers handle transfers ranging from small sums handed over by workers in Thailand's seafood processing industry to tens of thousands of dollars sent by professionals in Singapore.
"The Burmese just don't trust state financial institutions in any form," says Prof Turnell, who edits the journal Burma Economic Watch. "No one sends anything through the official banks."
Entrusting money to an underground financial network may seem risky. Yet hondi dealers have a powerful incentive to keep their customers' faith: the money they collect from migrants is an integral part of the country's trading system, which is always in danger of paralysis due to the regime's
stifling red tape.
Traders use migrant payments to buy foreign consumer goods to send to Burma for sale - a highly lucrative enterprise given both import restrictions and limited domestic production capacity. This money is also sometimes sought by Burmese exporters to meet the onerous foreign-currency
working capital requirements generated by regime demands. "Without this foreign currency in the system, everything will be stuck," said a Singapore-based Burmese trader.
Burma's current trade restrictions are a legacy of nearly total state control of the economy from 1962 to 1988, when Gen Ne Win was pursuing his quixotic "Burmese way to Socialism". While the junta that took power after that has presided over tentative economic reform, it remains deeply wary of private entrepreneurs. The generals' deep-rooted impulse to control the market – mocked by some as a true "command economy" - has been exacerbated by western sanctions, including a US ban on all imports from Burma.
In theory, every shipment in or out of Burma must be sanctioned by a high-level trade council overseen by a top general, and transactions can only go ahead if every detail - including the price - meets regime approval. But requests to import goods that would compete with products from Burma's creaky state industries are generally denied. Traders complain that they face regular demands from officials to obtain higher
selling prices for exports, or pay less for imports, irrespective of real market prices. Burmese traders also confront onerous paperwork and working capital requirements to trade.
Unsurprisingly, Burma's official foreign trade figures are anaemic. In 2006, the country's total exports were recorded at $5bn, 43 per cent of which comes from natural gas exports, with much of the rest generated by timber and gem sales. Official imports were just $2.9bn, of which $676m was accounted for by diesel and petrol. Yet with undocumented migrant
earnings, resourceful Burmese businessmen can work around the crippling restrictions, bringing in supplies ranging from foodstuffs to medicine to spare auto parts, and cushioning the population from the full force of state controls. "It allows the people some consumption space outside the control of the government," said Mr Turnell.
It is impossible to estimate accurately the value of oversees remittances to Burma's economy, given that it flows through decentralised, informal channels, and often never actually enters the country as cash. Even reliable data on the numbers of Burmese workers overseas are unavailable.
Yet even the roughest calculations suggest that the value of remittances to Burma's long-suffering population far exceeds the paltry $200m, or $3.8 per capita, the country receives in foreign aid. It also suggests that the quantity of "black" imports financed by migrant money is quite substantial
when compared to officially sanctioned imports.
The public face of the hondi system varies dramatically depending on the locale. In Singapore, business is conducted from the well-known Peninsula Plaza; in the Thai province of Samut Sakhon - where an estimated 160,000 Burmese are employed in seafood processing plants - sisters Ma Aye, 32,
and Thaw Da Htwe, 28, operate as agents from a tiny room where they also live and sell paan, the betel nut commonly chewed around Asia.
The sisters, who say they are agents for a big businesswoman from their hometown in Burma, earn a Bt20 commission for every Bt1,000 ($31) they collect, then wire the money to a bank account, usually in locations near the Thai border. On the other side, their boss arranges payouts for the families. The sisters say they handle around Bt100,000 in transfers each
month, adding Bt2,000 to their own earnings from paan sales. A Macquarie University survey of 2,500 Burmese migrant workers in Thailand - which has an estimated 1.5m legal and illegal migrants from its neighbour - found each sending home an average of $380-$400 annually.
Burma's ruling generals do periodically try to crack down, arresting and harassing those involved in illegal financial transactions and trade. Yet these crackdowns have merely driven the informal financial system deeper underground, businesspeople say, while also encouraging the fragmentation
and decentralisation of the business. With Burma's urban population already seething at spiralling inflation, frequent power shortages and now rising fuel prices, the regime may well be reluctant genuinely to choke off what has become a crucial safety valve for the public.
"It's the survival margin," Mr Turnell says of the remittances. "It's not going to turn Burma into Thailand, but it does seem key to survival for an awful lot of people. It underlies the extent to which the country can just motor on at a low level of development, and the people, no matter how desperate, can just sort of survive."