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Managing Labor Migration in the Twenty-First Century
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Occupational Distribution of Employed Workers, March 2002
Occupational Distribution of Employed Workers, March 2002
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January 2012 Volume 19 Number 1

Southeast Asia


Cambodia. Cambodia, along with Jordan and Haiti, explicitly links exports with labor standards, with the ILO and buyers checking factories to monitor compliance. There has been a proliferation of unions, over 2,300, in the 400 Cambodian factories that account for most exports, meaning that there can be 10 or more unions in one factory. A proposed law would reduce the number of unions allowed in each workplace.

Indonesia. Indonesia and Malaysia agreed to resume the deployment of Indonesian domestic workers to Malaysia on December 1, 2011; some 117 Indonesian recruiters are authorized to send workers to Malaysia. Deployment was suspended in June 2009, and the two countries have been working on an agreement to improve worker protections since.

The new MOU includes 11 protections for domestic workers, including the right to retain their passports and receive a minimum wage of M$700 ($225) a month in Malaysia. Private Indonesian recruiters that send domestic workers to Malaysia promised to improve protections by covering all recruitment costs.

The Indonesian government is also trying to improve protections for domestic worker migrants in Middle Eastern countries, where reports of abuse are common. In November 2011, several Indonesian ambassadors reportedly complained about the Indonesian women they are supposed to protect, saying that the presence of Indonesian domestic workers in Saudi Arabia and other Gulf countries prompted locals to "disrespect" the female staff of Indonesian embassies and consulates.

Indonesia suspended labor migration to Saudi Arabia in November 2011 despite a May 28, 2011 bilateral agreement that aimed to improve migrant worker protections. Several Indonesian domestic workers have been beheaded for killing their employers, prompting the deployment ban. If enforced, about 30,000 Indonesians a year will not be going to Saudi Arabia.

Most of the six million Indonesians employed abroad are domestic workers; about 650,000 leave Indonesia each year. There are also an estimated 11 million domestic workers in Indonesia, where two-thirds of middle and upper class households employ them. The Manpower and Transmigration Ministry said in January 2011 that it would stop sending domestic workers abroad in 2017.

Remittances topped $6 billion in 2011, including $2 billion from Malaysia. President Susilo Bambang Yudhoyono extended a migrant workers task force charged with helping Indonesian migrant workers sentenced to death abroad, including 37 in Saudi Arabia and 14 in Malaysia.

Indonesia, the largest economy in Southeast Asia and one of the top 20 economies globally, is growing rapidly. Over half of the 240 million Indonesians are considered middle class, spending $2 to $20 a day. Foreign investors have poured into Indonesia to take advantage of growth and low wages, but a wave of strikes in 2011 may threaten the low-wage, labor-intensive export-led growth model. Regular workers are entitled to severance pay and a range of other benefits if laid off. Many of the firms owned by foreign investors hire workers via temp agencies, making them easier to lay off.

Malaysia. The government planned to register 1.2 million foreign workers under the Illegal Immigrant Comprehensive Settlement Programme (6P). Under Phase 1 in August 2011, authorized agents or management companies who obtained authorization letters from employers registered foreign workers on remote plantations. Phase 2 from October 10, 2011 to January 10, 2012 used government One-Stop Centers and 321 authorized agents to complete the process, with over 90 percent of cases in metro Kuala Lumpur. The government promised a new enforcement campaign beginning January 11, 2012.

In August 2011, Home Ministry secretary-general Tan Sri Mahmood Adam said that 2.3 million workers were registered. Migrants, who were less than five percent of Malaysian workers in the mid-1990s, were a quarter of Malaysian workers in 2010. Indonesian workers are concentrated in agriculture, construction and domestic workers, most Bangladeshis are employed in manufacturing, and most Vietnamese work in construction and manufacturing.

Many manufacturers in Malaysia use outsourcing agents or contractors to obtain workers. Typical labor costs are M$60 to M$80 a day ($19 to $25), with the agent acting as the worker's employer and paying about half of the payment received from the manufacturer to the worker in wages.

Migrant advocates decry outsourcers, alleging that they weaken protections for migrant workers. By making contractors rather than factory operators responsible for workers, advocates say that the Malaysian government tolerates contractors holding worker passports, not paying migrants regularly, and charging migrants for housing and food.

Some 267,800 irregular Bangladeshis registered with Malaysian authorities in Fall 2011, including 86 percent who did not have Bangladeshi passports. The Bangladeshis must obtain passports in order to legalize their status before a January 10, 2012 deadline.

Malaysia is an economic success story; per capita incomes increased eight times in the half century since independence. However, since the 1997-98 Asian financial crisis, investment and economic growth have slowed, and the government is having difficulty shifting away from its current economic engine, which relies on foreign investors to create jobs for Malays and migrants. In order to compete with lower-wage countries such as China and Vietnam, Malaysia will have to improve the quality of its labor force, which may be held back by Bumiputera or Bumiputra preferences in employment and universities.

Philippines. Philippine President Benigno S. Aquino III greeted returning migrant workers on December 22, 2011, recognizing their contributions to the economy.

The Philippine Overseas Employment Administration (POEA) can deploy Filipino migrant workers only to countries certified by the Department of Foreign Affairs as having laws that protect migrant workers. In Fall 2011, DFA announced that 41 countries did not protect migrants, including Lebanon and the US Virgin Islands, preventing lawful deployments. After protests from migrants about to depart and some of the countries on the list, the POEA suspended the deployment ban for 90 days.

Some Filipino recruiters warned in November 2011 that fewer highly skilled migrants are being deployed. POEA reported that an average 11,000 Filipina nurses a year went abroad over the past decade, and that there were 300,000 nurses in the Philippines who were unemployed or underemployed; 68,000 passed nursing exams in 2011.

The POEA wants to send more Filipino nurses to Australia. Most Filipino nurses require a three-month bridging course in Australian to satisfy Australian nursing requirements. POEA is exploring the potential of "fly now, pay later" schemes to allow Filipino nurses who do not have the funds to pay for training in Australia to travel and get the required training.

The number of migrants departing who were classified by POEA as highly skilled workers and professionals fell from 75,450 in 2001 to 41,850 in 2010.

The Philippines has more call-center employees, 400,000, than India, 350,000, largely because Filipinos speak American English and are more steeped in American culture. Monthly wages for call-center workers are higher in the Philippines, $300 a month, compared to $250 a month in India. Entry-level call center agents in the US earn about $20,000 a year, five times more than in the Philippines and six times more than in India.

Singapore. A sixth of households in Singapore have foreign domestic workers. A web site, http://singaporemaid.blogspot.com, allows employers to post comments and seek advice about domestic workers.

Singapore in December 2011 abolished an English-language test for newly arrived domestic workers that went into effect in 2005, saying that it would introduce a settling-in program instead. Some Indonesian legislators predicted that the result would be more communication problems between Indonesian domestic workers and their Singaporean employers.

Singapore has the world's highest-paid government officials. After the People's Action Party won only 60 percent of the vote in 2011 elections, Prime Minister Lee Hsien Loong promised to take a pay cut, from about S$3 million a year to S$2.2 million or $1.7 million a year, more than four times the $400,000 a year paid to the US president. Entry-level cabinet ministers will receive half the PM's salary. The PAP argues that high public sector salaries are necessary to deter corruption.

Thailand. Floods in central Thailand killed over 600 people and prompted the closure of factories that employed almost a million Thais and migrants from Burma, Cambodia and Laos. Some migrants in the process of completing nationality verification, which ends with a passport from the worker's country of origin, reported that they were harassed or arrested by Thai police when they tried to leave flooded areas because their temporary Tor Ror 38/1 cards restrict them to a particular province (at least 500,000 migrants had cards restricting them to one Thai province in Fall 2011).

Some factories that were closed by floods in October-November 2011 did not pay workers, leaving migrants dependent on loans and donations. Many Thai employers keep the passports of their legal and registered migrant workers for "safekeeping." Some employers disappeared, and some registered migrants were arrested because their employers or brokers had their documents.

At least 200,000 Burmese migrants tried to return to Burma to wait for flood waters to recede in Thailand. Migrant advocates complained that Thai police sometimes arrested Burmese migrants trying to return to Burma over the Mae Sot-Myawaddy bridge, charging them 2,500 baht ($81) to cross. There were many reports of Burmese brokers and Thai police cooperating to extort money from Burmese migrants displaced by flooding. In December 2011, the Thai government discussed flying an additional 100,000 Burmese migrants to Thailand to help clean up after the floods.

Thai authorities continue to debate how many migrants are in the country, their impacts, and how to improve migration management. About 62,000 migrants, 90 percent Burmese, are registered in Phuket, but most estimates suggest there are 200,000 migrants on the island. The number of registered migrants in Phuket has been declining, indicating that many migrants and their employers do not see the need to pay the equivalent of a month's wages for work permits and health insurance.

The number of migrant workers in Thailand almost doubled between 2004 and 2007, when migrants were about five percent of Thai workers. Estimates suggest that the 1.8 million migrants among Thailand's 36 million workers contribute one percent to Thailand's GDP; the low GDP contribution is due to migrants being concentrated in low-productivity industries that include agriculture, construction and fisheries. As in other countries, adding migrants reduces wages and wage growth more for already-present migrants than for local workers, and may raise the wages of skilled Thai workers.

The Thai government, which does not require that migrant workers have workers compensation insurance, is trying to require employers to pay 500 bath per worker to a private insurance company to provide protection in the event of workplace injuries. However, only 3,000 legal workers were covered at the end of 2011 by private workers compensation insurance. Legally registered migrants pay for health insurance but not workers compensation insurance.

Beginning in 2011, employers were supposed to deduct 2,400 baht from the wages of legal Burmese and Lao guest workers (2,100 baht from Cambodians) as contributions to a fund that covers the cost of removing unauthorized foreigners. The Thai government delayed the start of contributions to encourage more employers to register their migrant workers, and in 2012 announced that it would delay deportation fund contributions until 2013.

Vietnam. There are about four million Vietnamese living in 100 countries, including 400,000 migrant workers abroad. Remittances totaled $9 billion in 2011, up from $8 billion in 2010 and almost eight percent of GDP.

The Vietnamese labor force expands by about 1.6 million a year. Many rural youth migrate to industrial parks surrounding major cities to work for two million dong ($96) a month, a wage that workers complain is too low to cover basic living costs.

Hill, Hal, Tham Siew Yean, and Ragayah Haji Mat Bin. Eds. 2011. Malaysia's Development Challenges: Graduating from the Middle. Routledge.
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