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April 2005, Volume 12, Number 2

Malaysia, Singapore, Thailand

Malaysia. Malaysia has 10 to 20 percent foreign workers, with the uncertainty due in part to the large number of illegal workers; there are a million legal foreign workers and perhaps another million unauthorized foreigners. Unauthorized foreigners are subject to M$10,000 ($2,600) fines and two-year prison terms, while Malaysian employers face up to a year in jail and a fine of up to M$50,000 for each illegal worker hired, with those hiring more than five also liable to caning.

Caning is a standard punishment for more than 40 crimes in Malaysia, ranging from sexual abuse to drug use. Administered with a thick rattan stick, it splits the skin and leaves scars.

Some 380,000 unauthorized foreigners left during an "amnesty" that began in Fall 2004 and was extended several times. During amnesties, unauthorized foreigners can leave without paying fines for being illegally in the country. On March 1, 2005, some 300,000 policemen as well as the 560,000-strong Peoples Volunteer Corp began searching for the remaining unauthorized foreigners under Operation Tegas; the volunteers receive M$100 for each foreigner arrested.

Some Malaysian employers apparently withheld wages due to unauthorized migrants, assuming that they would not have to be paid if the migrants went into hiding or were deported. Critics noted that, under the government's plan, unauthorized foreigners would be allowed to re-enter Malaysia after paying for health checks and work permits, so that the exercise might wind up benefiting transport companies and hospitals while imposing costs on migrants.

Critics also noted that the Indonesian government did little to assist returning unauthorized migrants. In September-October 2002, some 350,000 migrant workers were deported from Sabah, Malaysia, to the Indonesian frontier town of Nunukan, East Kalimantan under such poor conditions that at least 85 died and thousands were near starving.

The "roundup" is popular in Malaysia. Many Malaysians blame foreigners for crime and other social ills, and the government says that foreigners do not pay tax and put a heavy burden on state services, such as education and health care.

By mid-March 2005, when 3,000 unauthorized foreigners had been apprehended, there were complaints of shortages of up to 400,000 workers, half in manufacturing. The Malaysian government announced that it would import additional legal foreign workers in a way that minimized dependence on Indonesians, mentioning recruitment in Pakistan, Vietnam, Burma, Sri Lanka, Bangladesh, China, India and Cambodia. On March 18, the government announced it would recruit 100,000 male Pakistanis to work in all areas including construction, manufacturing and services.

The government charges employers a levy or tax on each foreign worker employed, and most employers deduct the M$365 to M$1,200 a year levy from migrant wages. In 2005, the Home Ministry wants to require Malaysian employers to pay at least 30 percent of the levy and penalize those employers who recoup this portion of the levy from workers. Employers who hire migrants in a low-levy sector such as plantations, but have them work in a higher-levy sector such as manufacturing, are to be penalized, as are employers who hire migrants from other Malaysian employers (sub-contracting).

Malaysia and Indonesia announced that they would develop one-stop shops to issue passports (for $16) and work permits to Indonesians heading legally to Malaysia. A May 2004 Malaysia-Indonesia MOU sets out procedures for Indonesians to work in Malaysia; it allows Malaysian employers to hold workers' passports and other documents for "safekeeping."

However, the Association of Labor Exporters to the Asia-Pacific Region (Ajaspac) complained in March 2005 that the Indonesian Manpower and Transmigration Ministry was aiming to make money off migrants returning to Malaysia by charging excessive fees. According to Ajaspac, Malaysia-bound migrants are charged Rp 120,000 (US$13) to apply for a passport, Rp 250,000 for a health check, and Rp 100,000 for a Malaysian work visa- all fees in excess of cost, since Malaysia does not charge for work visas.

Singapore. Singapore, a city-state of four million, had about 600,000 foreign workers and 750,000 foreign residents in 2003; foreigners are about 30 percent of the labor force. The government makes a sharp distinction between unskilled and skilled foreigners. Unskilled foreigners (generally those earning less than S$2,500 a month) receive work permits and cannot bring their families, and their Singaporean employers must pay monthly levies or taxes to the government for the privilege of employing them.

About 20 percent of the foreign workers are considered skilled, and they receive employment passes that permit them to bring their families to Singapore. However, only about half of the employment pass holders are expatriates receiving housing and other benefits from their employers. Indeed, the employment pass system has become multi-layered since July 1994: P-passes are available to those earning S$3,500 a month or more, and they have more rights than S-pass holders, who must satisfy education, work experience and job requirements in Singapore criteria. If S-pass holders earn at least S$2,500 a month, they can bring their dependents to Singapore, but their employers must pay a levy that varies with market conditions, and S-pass holders cannot be more than five percent of a company's labor force.

Singapore's leaders have consistently said that the resource-poor country needs foreign talent to compete globally, and most studies suggest that foreign workers complement Singapore workers and speed economic growth. However, since white-collar workers have suffered more-than-usual unemployment since 1997, public attitudes toward even skilled foreign workers have become more skeptical. But with leaders proclaiming that foreign talent is necessary, and with employment passes issued quickly and in a transparent manner, there is little prospect for major changes in Singapore's two-track foreign worker policy.

Thailand. Thailand had an estimated 2.2 million foreign residents in 2003, including 800,000 unregistered and thus illegal foreigners, 514,424 registered migrant workers from Myanmar, Laos and Cambodia, 409,258 overstayers (legal entries who did not depart), 288,780 displaced persons from Myanmar, and about 192,500 legal foreign residents and workers.

In 2004, the Thai government allowed all unauthorized foreigners in the country before November 2003 to register, and 1.5 million did so by November 2004. They included 72 percent from Myanmar, 15 percent from Cambodia, and 13 percent from Laos. However, in order to get work permits to stay in Thailand and work for up to four years, registered migrants had to get health checks. By December 2004, only 814,000 had done so; they were 75 percent from Myanmar, 13 percent from Cambodia and 12 percent from Laos.

These 814,000 now legal guest workers were concentrated in agriculture, 22 percent; domestic helpers, 16 percent; fisheries, 16 percent; and construction 14 percent. The remaining migrants who registered have until June 2005 to get health checks and work permits. In the meantime, there are active efforts to locate and remove unauthorized foreigners; some 204,000 were removed in 2004.

The Thai government wants to manage migration, and aims to do so by preventing illegal entries and employment and putting national and provincial quotas on the number of migrant workers allowed. The Deputy Minister of Labor chairs a committee to the Administer (Illegal) Alien Workers program, and for 2005 the national quota is 1.5 million migrants, which is also the number of foreigners who registered in 2004. Thailand has signed Memoranda of Understanding with the governments of Myanmar, Laos, and Cambodia which calls on these countries to issue their nationals in Thailand who do not have ID documents the IDs necessary to get work permits.

Others. Indonesia has a labor force of 103 million, with 40 percent employed in agriculture. However, agriculture generated only 15 percent of GDP in 2004 and, except for oil palm and rubber, there are limited prospects for developing a significant plantation-based agriculture that can compete in global markets.

Vietnam's Ministry of Labor, War Invalids and Social Affairs urged labor export firms to target new markets for migrants, including European and African countries. Some 67,450 migrants were sent abroad in 2004, according to the Ministry's Overseas Worker Management Department.

A January 2005 Asian Development Bank study of poverty distinguished income poverty from access poverty- do the poor have access to essential services? In the Philippines, there was little poverty reduction since 2000 despite economic growth. Almost half of the rural residents were poor, as were 20 percent of urban residents. However, the worst outcomes were in access- two-thirds of all children finish elementary school, but only a third of poor children.

Asean has been moving towards allowing the freer movement of skilled workers between its 10 member countries, but it has yet to address the much larger movement of unskilled workers.

"Malaysia to hire 100,000 Pakistanis to plug labor vacuum," Agence France Presse, March 18, 2005.