The economics of sex

A new ILO report suggests that in spite of Asia's economic crisis, economic and social forces driving the sex industry show no signs of slowing down, particularly in light of rising unemployment in the region. Prostitution in Southeast Asia has grown so rapidly in recent decades that the sex business has assumed the dimensions of a commercial sector, one that contributes substantially to employment and national income in the region.

The report is based on detailed studies of prostitution and commercial sex work in four countries - Indonesia, Malaysia, the Philippines and Thailand. The authors of the ILO report emphasize that the scrutiny of the "sex sector" of these four countries does not suggest that they have a unique prostitution problem or that their social, moral or economic values are especially aberrant. In fact, the national case studies in the report "are illustrative of the situation in many countries", and prostitution and its attendant problems are universal.

"If the evidence from the recession of the mid-1980s is any indication, then it is very likely that women who lose their jobs in manufacturing and other service sectors and whose families rely on their remittances may be driven to enter the sex sector," says Ms. Lin Lim, the ILO official who directed the study.

As to the prospect of a slowdown in the demand for commercial sex services following region-wide declines in personal income, the ILO report notes that "poverty has never prevented men from frequenting prostitutes, whose fees are geared to the purchasing power of their customers". Moreover, after decades of interaction with other economies, the sex industry in Asia is effectively internationalized: overseas demand is likely to be unaltered by domestic circumstances and may even be fuelled as exchange rate differentials make sex tourism an even cheaper thrill for customers from other regions.

Although researched prior to the current crisis, the ILO report warns that the growing scale of prostitution in Asia, combined with its increasing economic and international significance, has serious implications relating to public morality, social welfare, transmission of HIV/AIDS, criminality, violations of the basic human rights of commercial sex workers, and commercial sexual exploitation especially of the child victims of prostitution.

Yet, there is no clear legal stance nor effective public policies or programmes to deal with prostitution in any of the countries.

"The sex sector is not recognized as an economic sector in official statistics, development plans or government budgets."

Governments are constrained not only because of the sensitivity and complexity of the issues involved but also because the circumstances of the sex workers can range widely from freely chosen and remunerative employment to debt bondage and virtual slavery. The countries have, however, taken action to eliminate child prostitution, an activity the ILO report characterizes as "a serious human rights violation and an intolerable form of child labour". Child prostitution risks growing as poverty and unemployment strain family incomes and contribute to the expanding ranks of street children who are an increasingly common sight on the streets of cities worldwide.

Major employment and revenue generator

The report says that although the exact number of working prostitutes in these countries is impossible to calculate due to the illegal or clandestine nature of the work, anywhere between 0.25 per cent and 1.5 per cent of the total female population are engaged in prostitution.

Estimates made in 1993-4 suggest that there were between 140,000 to 230,000 prostitutes in Indonesia. In Malaysia, the estimated figures for working prostitutes range from 43,000 to 142,000, but the higher figure is more probable, according to the ILO analysis. In the Philippines, estimates range from 100,000 to 600,000, but the likelihood is that there are nearly half a million prostitutes in the country. In Thailand, the Ministry of Public Health survey recorded 65,000 prostitutes in 1997, but unofficial sources put the figure between 200,000 and 300,000. There are also tens of thousands of Thai and Filipino prostitutes working in other countries. The prostitutes are mainly women, but there are also male, transvestite and child prostitutes.

Including the owners, managers, pimps and other employees of the sex establishments, the related entertainment industry and some segments of the tourism industry, the number of workers earning a living directly or indirectly from prostitution would be several millions. A 1997 study by the Ministry of Public Health of Thailand found that of a total of 104,262 workers in some 7,759 establishments where sexual services could be obtained, only 64,886 were sex workers; the rest were support staff including cleaners, waitresses, cashiers, parking valets and security guards.

A Malaysian study lists occupations with links to the sex sector as medical practitioners (who provide regular health checks for the prostitutes), operators of food stalls in the vicinity of sex establishments, vendors of cigarettes and liquor, and property owners who rent premises to providers of sexual services. In the Philippines, establishments known to be involved in the sex sector include special tourist agencies, escort services, hotel room service, saunas and health clinics, casas or brothels, bars, beer gardens, cocktail lounges, cabarets and special clubs.

The sex sector in the four countries is estimated to account for anywhere from 2 to 14 per cent of Gross Domestic Product (GDP), and the revenues it generates are crucial to the livelihoods and earnings potential of millions of workers beyond the prostitutes themselves. Government authorities also collect substantial revenues in areas where prostitution thrives, illegally from bribes and corruption, but legally from licensing fees and taxes on the many hotels, bars, restaurants and game rooms that flourish in its wake.

In Thailand, for example, close to US$300 million is transferred annually to rural families by women working in the sex sector in urban areas, a sum that in most cases exceeds the budgets of government-funded development programmes. For the 1993-95 period, the estimate was that prostitution yielded an annual income of between US$22.5 billion and US $27 billion.

In Indonesia the financial turnover of the sex sector is estimated at US$1.2 billion to US$3.3 billion per year, or between 0.8 and 2.4 per cent of the countrys GDP, with much of prostitutes earnings remitted from the urban brothel complexes they work in to the villages their families live in. In the Jakarta area alone, there is an estimated annual turnover of US$91 million from activities related to the sale of sex.

Economic incentives drive the industry

While many current studies highlight the tragic stories of individual prostitutes, especially of women and children deceived or coerced into the practice, the ILO survey points out that many workers entered for pragmatic reasons and with a general sense of awareness of the choice they were making. About one-half of Malaysian prostitutes interviewed for the study said it was "friends who showed the way to earn money easily", a pattern that is replicated in the other study countries.

Sex work is usually better paid than most of the options available to young, often uneducated women, in spite of the stigma and danger attached to the work. In all four of the countries studied, sex work provided significantly higher earnings than other forms of unskilled labour.

In many cases, sex work is often the only viable alternative for women in communities coping with poverty, unemployment, failed marriages and family obligations, in the nearly complete absence of social welfare programmes. For single mothers with children, it is often a more flexible, remunerative and less time-consuming option than factory or service work.

Surveys within sex establishments reveal that while a significant proportion of sex workers claimed they wanted to leave the occupation if they could, many expressed concern about the earnings they risked losing if they changed jobs.

Even so, the surveys also reveal that in the experience of most of the women surveyed, prostitution is one of the most alienating forms of labour. Over 50 per cent of the women surveyed in Philippine massage parlours said they carried out their work "with a heavy heart", and 20 per cent said they were "conscience stricken because they still considered sex with customers a sin". Interviews with Philippine bar girls revealed that more than half of them felt "nothing" when they had sex with a client; the remainder said the transactions saddened them.

Surveys of women working as masseuses indicated that 34 per cent of them explained their choice of work as necessary to support poor parents, 8 per cent to support siblings and 28 per cent to support husbands or boyfriends. More than 20 per cent said the job was well paid, but only 2 per cent said it was easy work and only 2 per cent claimed to enjoy the work. Over a third reported that they had been subjected to violence or harassment, most commonly from the police but also from city officials and gangsters.

A survey among workers in massage parlours and brothels in Thailand revealed that "most of the women entered the sex industry for economic reasons." Brothel workers were more likely to say that they became prostitutes to earn money to support their children, while massage parlour women were often motivated by the opportunity to earn a high income to support their parents. Almost all of those surveyed stated that they knew the type of work they would be doing before taking up the job. Almost one-half of the brothel workers and one-quarter of the massage parlour workers had previously worked in agriculture. A further 17 per cent of the masseuses said they had previously worked in home or cottage industries and 11 per cent had been domestic servants.

The rationale, in Thailand and elsewhere, was that in exchange for engaging in an occupation which is disapproved of by most of society and which carries known health risks, "the workers expected to obtain an income greater than they could earn in other occupations". In nearly all segments of the sex trade, that expectation was fulfilled, and remittances from the women working in the sex industry provide many rural families with a relatively high standard of living. The earnings of Thai sex workers varied widely according to the sector and the number of transactions engaged in, but surveys showed a mean income per month of US$800 for all women, with a mean of US$1,400 for massage parlour workers and US$240 for women in brothels.

Studies of prostitution in Indonesia consistently show relatively high earnings compared with other occupations in which women with low levels of education are likely to find work. The personal incomes of high-range sex workers in large cities (for example call girls working in high-priced discos and nightclubs) can be as high as US$2,500 per month, a level which far exceeds the earnings of middle-level civil servants and other occupations requiring a high level of education. Average monthly earnings in the middle range of the sector were estimated at around US$600 monthly and US$100 at the low end (when the exchange rate was US$1= 2,000 rupiahs).

In contrast, the earnings and working conditions are miserably low at the bottom end of the market; sexual transactions in cheap brothels can be as low as US$1.50 and prices on the streets of slums or alongside market areas and railroad tracks are even lower, with comparatively higher risks in terms of personal safety and exposure to sexually transmitted diseases and HIV/AIDS.

In Malaysia, earnings in the sex sector are higher relative to earnings in other types of unskilled employment. In manufacturing, for instance, average wages per annum in 1990 were US$2,852 for skilled workers and US$1,711 per annum for unskilled workers. In comparison, a part-time sex worker in the cheapest of hotels who received US$4 per client, seeing about ten clients daily and working only once a week for about 12 hours, earned US$2,080 per annum.

One such sex worker explained "I can earn enough to look after my two young children. It is so difficult to get someone to look after them when you work elsewhere. Here I only come when I need the money and it is easy to find a babysitter for just one day."

All four country studies point out, however, that the information was gathered from establishments and individual prostitutes willing to be surveyed. The picture is incomplete for those establishments, especially brothels, which virtually enslave the workers and of those women and children who are the victims of serious exploitation and abuse.

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* The Sex Sector: The economic and social bases of prostitution in Southeast Asia edited by Lin Lean Lim, International Labour Office, Geneva, 1998. ISBN 92-2-109522-3. Price: 35 Swiss francs.

Interview with Dr. Lin Lean Lim, editor of

"The Sex Sector: The economic and social bases of prostitution in Southeast Asia"

World of Work (WoW): Has the sex sector in Asia become an economic sector, and how is it developing?
Ms. Lin Lim: Prostitution in Asia appears to have grown to a point where we can talk about an economic sector providing significant employment and income to large numbers of people who are either directly or indirectly involved in the sector. It also appears to have changed in response to the changing tastes and sophistication of customers, as well as the enforcement of legislation and because there are increasing national and international vested economic interests linked to the sex sector.
WoW: Does this represent a kind of "globalization" of prostitution?
Ms. Lin Lim: Yes, and we can talk about this globalization from two perspectives. The first is the fact that there appears to be growing international trafficking of women and children across national borders into the sex sector. And the second, of course, is the fact that growing sex tourism brings customers from other countries to - in this case - the south-east Asian countries.
WoW: What is the scope of the sex sector, and how is it linked to other sectors?
Ms. Lin Lim: The phrase "sex sector" implies that we cannot just look at prostitutes and individuals who are working as prostitutes, but must recognize the fact that it is a highly organized sector with linkages to some segments of the tourist industry, the hotel industry, the sale of cigarettes and liquor, and other very powerful and vested interests. We emphasize the economic basis of prostitution to draw attention to the fact that to deal with the problem one has to address the organizational structures of the sector. We should also recognize that macroeconomic development policies of governments could indirectly contribute to its growth.
WoW: What are these macroeconomic policies?
Ms. Lin Lim: Let me be clear. In none of the countries we studied is it the intention of the government to promote the growth of the sex sector. In the Philippines and Thailand, prostitution is illegal. Still, policies to encourage the growth of tourism, promote migration for employment, promote exports of female labour for earning foreign exchange have contributed indirectly to the growth of prostitution. Also, by contributing to a rising disparity in incomes between rural and urban areas, development policies in some countries have caused the marginalization of some segments of their labour force. Inadequate economic opportunities for those with low levels of education and, very importantly, the lack of social security or social safety nets for the poor, may also have contributed to the growth of prostitution as a sector.
WoW: How has prostitution in this area evolved over the years?
Ms. Lin Lim: This report was written before the current Asian economic crisis. But earlier evidence from the economic crisis in the mid-1980s suggested that there was an increase in prostitution, particularly among women sending remittances to their rural families, who had come to depend on these remittances for survival. So from that perspective there obviously is a danger that as people lose their jobs, they may be forced into prostitution as a means of survival, not just for themselves, but for their families. The danger, obviously, is that it will not be just relative poverty that will drive an increasing number of people into prostitution, but absolute poverty which is increasing with the crisis.
WoW: What are governments doing?
Ms. Lin Lim: Governments have always faced difficulties in dealing with prostitution because of the sensitivities and complexities of an issue that is economic in nature but carries strong social biases, as well as serious implications related to public morality, social welfare, criminality, and health concerns, in particular for transmission of the human immunodeficiency virus (HIV) which causes AIDS. Other complexities include the large range of vested interests, religious factors and very importantly, human rights considerations. And then there is the "underground" nature of the sector, which also adds an element of complexity. These different perspectives make it hard for governments to take clear legal stands or adopt effective policies and programmes regarding the sex sector.
WoW: Why do women enter the sex sector and what are their working conditions like?
Ms. Lin Lim: There are a range of circumstances. Some enter freely as a form of sexual liberation, or by "choice", as the only economic opportunity available in the case of persons with extremely low education levels. In other cases, women are in the sex sector as a result of debt bondage or have been tricked into it. Depending on the mode of entry into the sector, the working conditions differ from a remunerative and relatively good working situation, to abusive and exploitative conditions involving virtual slavery. What the report emphasizes then is that the policies and programmes have to address differently the needs of the different groups involved in the sector. The emphasis is that adult prostitution has to be treated very differently from child prostitution. In the case of adult prostitution, one could take the stand that where prostitution is legal, proper working conditions and labour legislation should be applied to sex workers, just as they apply to other workers. But the ILO is very firm on the fact that child prostitution cannot and should not be treated in the same way as adult prostitution. Child prostitution is a serious violation of human rights and an intolerable form of child labour that must be eliminated.
WoW: Why do you stress the social bases of prostitution?
Ms. Lin Lim: To draw attention to the fact that in addition to the well-organized aspects of the sector and economic interests, the sex sector is also driven by social forces highlighting the inequality of relations between men and women. In many of these societies - patriarchal societies - there is a different set of moral standards and codes of conduct for men and women. And there are also codes of conduct and social norms that dictate relations between parents and children. Some daughters go into prostitution to help support families as a form of repayment to their parents.
The Child Victims of Prostitution
The ILO stresses that whereas adults could choose sex work as an occupation, children are invariably victims of prostitution. "Child prostitution differs from - and should be considered a much more serious problem than - adult prostitution." Children, in contrast to adults, "are clearly much more vulnerable and helpless against the established structures and vested interests in the sex sector, and much more likely to be victims of debt bondage, trafficking, physical violence or torture. Commercial sexual exploitation is such a serious form of violence against children that there are lifelong and life-threatening consequences."
As with adult prostitution, it is not possible to have precise figures on the extent of child prostitution. A 1997 report put the number of child victims of prostitution at 75,000 in the Philippines. In Thailand, a 1993 estimate was between 30,000 and 35,000 child prostitutes. In Indonesia, a 1992 survey found that one-tenth of the prostitutes were below 17 years of age and of those who were older, more than a fifth said they had started working before the age of 17. In Malaysia, more than half of those "rescued" from various sex establishments were under 18 years of age.
Prostitution and the Feminization of Migration
Significantly, the country studies encountered few, if any, women working as prostitutes in the towns or villages where they grew up. Prostitutes tend to be procured from rural areas or small towns for the cities or, as young, first-time job seekers new to urban areas, are vulnerable to being drawn into the sex sector.
The ILO report also cites available evidence to suggest that there has been a rise in international trafficking of women and children for the sex sector. Underground syndicates operate "ruthlessly efficient " networks, often with official connections, to recruit, transport, and sell women and children across national borders.
An estimated 20,000 to 30,000 Burmese women work in the sex sector in Thailand; nearly all are illegal immigrants at constant risk of arrest and deportation, and 50 per cent are estimated to be HIV positive. In India, some 100,000 Nepalese women work as prostitutes, with an additional 5,000 Nepalese trafficked to the country each year. An estimated 200,000 women from Bangladesh have been trafficked to Pakistan over the past decade and thousands more to India.
The report also identifies the feminization of labour migration as one of the major factors fuelling growth in the sex sector. It says that some 80 per cent of the Asian female migrant workers legally entering Japan in the 1990s were "entertainers", a common euphemism for prostitutes. Most are from the Philippines and Thailand. Thai women work as prostitutes throughout Asia as well as in Australia, Europe and the United States. Flows of prostitutes throughout south and southeast Asia are described as almost "commuter-like" in their regularity and complexity.
What is to be done?
A major hurdle to the formulation of effective policy and programme measures to deal with prostitution has been "that policy-makers have shied away from directly dealing with prostitution as an economic sector". The report states categorically that it is outside the purview of the ILO to take a stand on whether countries should legalize prostitution. While fully acknowledging the complexity of cutting through the many ambivalent, inconsistent and contradictory perceptions swirling around prostitution, the report does, however, offer some recommendations on developing a policy stance:
    * Target child prostitution for elimination.
    * Recognize the variety of circumstances prevailing among prostitutes and eliminate abuses.
    * Focus on structures which sustain prostitution, not just the prostitutes themselves.
    * Carry out official macroeconomic Analysis to assess, for example, the health impact of the sector, the scope and magnitude of labour market policies needed to deal with workers in the sector and the possibilities for extending the taxation net to cover many of the lucrative activities associated with it.
    * Examine the health aspect, not only among prostitutes but also among clients, especially since the chain of transmission of disease from the sex sector to the population involves clients who also have unprotected sex with their spouses or others.

Sex as a sector: Economic incentives and hardships fuel growth

Major employment and revenue generator

Economic incentives drive the industry

"The Sex Sector: The economic and social bases of prostitution in Southeast Asia"