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July 2014, Volume 21, Number 3

Southeast Asia

The ASEAN Economic Community (AEC) plans to lower barriers to the free movement of goods, capital and workers in 2015, but few workers are expected to take advantage of freedom of movement among the 10-ASEAN member states. One reason is that labor migration will be liberalized in top-down fashion, with accountants, architects, dentists, doctors, engineers, nurses, surveyors and tourism industry workers allowed to move freely in 2015.

Experience in other free-trade areas suggests that few professionals move for several reasons, including training that is country-specific and difficulty having their credentials recognized abroad. Professionals seeking to work for wages abroad may not speak the local language, reducing the willingness of employers to hire them.

Most of the workers moving between ASEAN member states are low-skilled and unauthorized, such as Indonesians in Malaysia or Burmese in Thailand. Their migration and status is not addressed by the AEC, but the 2007 ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers obliges ASEAN member state governments to protect low-skilled migrants. However, there is no framework to implement the 2007 ASEAN Declaration.

ASEAN nations are introducing visa-free travel. Many ASEAN member states allow nationals of other ASEAN countries to enter and remain for 30 days, but not to work. Vietnamese are reportedly taking advantage of visa-free entry to Thailand and going to work for wages that are often five times higher than at home. By traveling from Thailand to Laos every 30 days and then returning, Vietnamese in Thailand can maintain a legal presence. However, since they lack work permits, they are violating the terms of their visas by working.

Burma. There are an estimated two million Burmese workers in Thailand, making them three-fourths of the foreign workers in Thailand. The Myanmar Association in Thailand noted in June 2014 that the Thai military government that took power in May 2014 targeted unauthorized Cambodian migrants rather than unauthorized Burmese.

The Burmese government is defensive about the conditions of Muslim Rohingya in the western state of Rakhine bordering Bangladesh, where attacks by majority Buddhist on the minority Rohingya have led to the creation of camps that the UN describes as very inadequate. The government calls the Rohingya Bengalis, suggesting they are illegal immigrants from neighboring Bangladesh, but many Rohingya have lived in Burma for decades.

In Mandalay, Burma's second-largest city, a nighttime curfew was imposed after Buddhists attacked Muslims. So-called radical Buddhists are pressing the government to restrict religious conversions and to require women to obtain permission before marrying outside of their religion.

Burma is preparing for elections in 2015, and the government may bow to the demands of radical Buddhists to win votes. Most senior government officials are former military officers, and the military continues to dominate the economy via two holding companies.

Cambodia. The government in June 2014 reduced the cost of passports from the usual $124 to $4 for migrant workers and students in a bid to encourage more Cambodians to leave the country legally; the $4 fee applies to those with confirmed jobs and student places abroad. The government said that only 90,000 of the 400,000 Cambodian migrant workers in Thailand have valid passports and visas, and that over 220,000 returned to Cambodia after rumors that Thailand's new military government was expelling unauthorized foreigners.

In June 2014, the government announced that Cambodian recruiters could charge migrants a maximum $49 for a passport, visa, worker ID card and transportation to the Thai border, emphasizing that Thai employers are supposed to pay all recruitment costs. Recruiter Top Manpower said that it previously charged migrants one month's Thai salary for a two-year contract or about five percent of expected Thai earnings.

The Somaly Mam Foundation (Afesip) was rocked by assertions in May 2014 that Somaly Mam lied about being trafficked for sex as a young girl. Somaly Mam raised millions of dollars from celebrities to fight sex trafficking, saying that she was sold into slavery as a teen and worked in a brothel for a decade. Mam said that most sex workers were victims like herself.

However, Somaly Mam graduated from high school in the village of Thloc Chhroy, Cambodia. Her stories led to a 2008 Law on Suppression of Human Trafficking and Sexual Exploitation that, critics allege, allows Cambodian police to harass and abuse sex workers. Mam's former husband said that donors create incentives for groups like Afesip to inflate the problems they are confronting and distort the truth to obtain aid. He said: "If you have no story, you don't have money? What is surprising to me is that it took 10 years for people to discover that it was a joke."

Malaysia. Malaysia is a country of 30 million with about 2.4 million legal foreign residents and a goal of achieving a per capita income of $15,000 by 2020.

Almost all legal foreign residents, 2.3 million, are foreign workers, and registered migrants are 16 percent of Malaysia's 14.1 million labor force. There may be an additional one million irregular foreign workers, which would mean a total of 3.3 million foreign workers and make migrants 26 percent of Malaysia's workers.

The three major sectors of employment for migrants in Malaysia are manufacturing, about 35 percent; agriculture, 25 percent; and construction, 20 percent. About 35 percent of all workers in manufacturing, agriculture, and construction are foreigners, and the migrant share is even higher in some subsectors. For example, 70 percent of workers on plantations are migrants, and the Ministry of Plantation Industries and Commodities recommends one migrant for each eight hectares of palm oil or four hectares of rubber or 3.6 hectares of cocoa.

Migrant quotas in manufacturing are informal, such as up to three foreign workers for each local worker employed in export-oriented manufacturing firms.

The composition of the foreign workforce in Malaysia has changed. In 2000, three-fourths of low-skilled migrant workers were Indonesians, but by 2013 Indonesians were only 45 percent of migrants in Malaysia, followed by Nepalese, 17 percent of migrants, and Bangladeshis, 14 percent of Malaysia's migrants.

The Malaysian government in 1995 said that accepting foreign workers was "an interim solution to meet excess demand for low-skilled labor." As it admitted migrant workers, the government said it was pursuing "a longer-term strategy to increase productivity and expand the supply of skilled labor." This policy has not changed even as the dependence on migrants of key sectors of the Malaysian economy has increased.

Malaysian employers can receive permission to hire migrants if a labor market test demonstrates that local workers are unavailable. This labor market test involves posting vacant jobs in the Job Clearing System for a specified period of time, such as one week for plantation jobs and a month for manufacturing jobs.

Low-skilled foreign workers receive visit passes for temporary employment (PKLS) while high-skilled foreigners receive employment passes. PKLS are issued for one year to migrants between 18 and 45, and can be renewed up to three or five years, while "expatriates" who earn at least RM5,000 ($460) a month can receive two-year visas. Low-skilled foreigners are no longer allowed to adjust their status from visitor to worker in Malaysia.

The cost of a PKLS is RM3,000 to RM5,000, and there are no clear guidelines on the relative shares of this cost paid by migrants and employers. Multinationals typically pay all recruitment costs and do not deduct them from migrant wages.

Employers pay an annual levy of RM590 ($183) for migrants employed on plantations and RM1,250 ($388) for migrants employed in manufacturing and construction. Since the introduction of a minimum wage of RM 900 ($280) a month in 2013, employers may deduct their levy payments from migrant worker wages. Before the minimum wage hike, most migrant workers were paid RM450 to RM600 a month plus overtime and provided with housing.

The government mandated the use of outsourcing companies in 2006 for Malaysian firms that hired fewer than 50 workers in an effort to better police recruiters. However, the 250 outsourcing companies have a very mixed reputation, with many accused of overcharging migrants that they recruit abroad and, in Malaysia, provide with housing and transport to and from their jobs.

With more workers wanting to come to Malaysia than there are jobs, outsourcing companies were soon paying Malaysian employers for job offers and passing the cost on to Bangladeshi and other migrants. Outsourcing companies were banned at the end of 2013 in response to US and multinational pressure to end their use, but outsourcers with quotas can still bring migrants into Malaysia until these quotas are exhausted.

Malaysia and Bangladesh signed a G-to-G agreement that anticipated large flows of Bangladeshi migrants to Malaysian plantations. However, between April 2013 and May 2014, only 4,000 Bangladeshi migrants went to Malaysia, far fewer than the projected 10,000.

Sabah in Borneo is a special case. The number of Sabah residents rose from 600,000 in 1970 to 3.5 million in 2013, in part because Filipinos migrated to Sabah in the 1970s and settled. Half of workers in Sabah are registered migrants, and there are additional irregular foreign workers.

Philippines. The Philippines received $23 billion in remittances in 2013, triple the $7.6 billion of 2003. Remittances pay for health care, education and other basic services in recipient families.

A sixth of the residents of Pozorrubio, a city of 66,000 north of Manila, are abroad. Remittances have transformed the city, giving it painted houses and shopping malls. Migrants have contributed to public services such as street lights and parks. After meeting basic needs, remittance investments are often devoted to building three-story houses that are empty for much of the year because their owners are abroad.

Manila's airport charges departing passengers 550 pesos ($12.50), but exempts Filipinos leaving to work abroad, who are estimated to be half of those departing. The airport wants to include the departure tax in the price of the airline ticket, a move opposed by Filipino recruiters who say they buy a million tickets a year.

Singapore. The government in May 2014 announced plans to slow the construction of government infrastructure projects to reduce the number of foreign workers. PM Lee Hsien Loong said that the number of foreign workers had to be held to "a level that is sustainable, and which we can physically accommodate in Singapore in the long term."

There were 1.55 million foreigners among 5.4 million Singapore residents in 2014, and 1.32 million with employment or work-passes in Singapore's workforce of 3.5 million.

Over half of the foreign workers, 770,000, were low-skilled work permit holders. Of those, half were Malaysians who commute daily to jobs in Singapore, and some of the other 390,000 who lived in Singapore and were employed in manufacturing and services rented apartments. Over 90 percent of the other work-permit holders, especially those employed in construction, lived in dorms that are often operated by non-employers of migrants.

The government in 2010 announced a 10-year plan to increase productivity and reduce the share of foreigners in the workforce from the current 38 percent to 35 percent.

On December 8, 2013, a bus killed an Indian migrant in Singapore's Little India, sparking a riot that injured 54 police officers. A Committee of Inquiry in June 2014 concluded that misunderstandings about how the Indian was killed and drunken migrants led to the riot. The committee said that poor living and working conditions were not the cause of the riot, asserting that migrants "were happy with their jobs and living quarters in Singapore." However, dorm operators where migrants live were encouraged to improve recreation facilities for migrant worker residents.

Singapore is tightening regulations to better protect low-skilled migrant workers. Singapore's 1,000 recruiters cannot charge migrants more than two month's of Singapore wages for their services, but Singapore does not regulate fees charged by recruiters in the workers' countries of origin.

Critics allege that some employers continue to pay migrant workers in cash, which makes it hard to resolve wage disputes. The Migrant Workers Center wants the government to require employers to pay migrants electronically in order to make it easier to resolve claims of unpaid wages and to ensure that some of each worker's pay is remitted to families at home.

Employers post a S$5,000 bond for every low-skilled and non-Malaysian worker they hire, and they forfeit this bond if the migrant does not depart at the end of the contract. To get their S$5,000 back, some employers use repatriation companies that physically take migrants from their dorms to the airport and ensure that they board flights. Some employers allegedly terminate injured workers and have them repatriated rather than provide continuing care in Singapore.

Many Singaporean households have domestic workers from poorer countries. Most domestic workers in Singapore earn S$500 ($400) a month, and Singapore-based recruiters can charge the domestic workers they place up to two months Singapore salary or S$1,000. However, many in summer 2014 were charging only S$300, reflecting competition between agents, who often allow Singaporeans to specify the age, nationality, marital status, religion, and other characteristics of domestic workers (www.homekeepermaidagency.com/index.php/find-a-helper).

Domestic workers pay far more in their countries of origin, often $2,000 to $4,000, which is recouped in deductions from their wages. One result is high turnover, with less than half of the domestic workers staying with their Singapore employer at least a year despite two-year contracts.

Singapore is requiring firms seeking permission to hire foreign professionals on Employment Passes to post their job ads on a new a jobs bank (www.jobsbank.gov.sg) for at least 14 days so that Singaporeans have a chance to apply.

Singapore has two casinos. A year after they opened in 2010, gambling revenues in the city-state surpassed those on the Las Vegas strip. Singapore's casinos offer the world's highest minimum bets, S$1 million ($800,000) and are the world's most profitable.

Thailand. The Thai government deals with migrant workers primarily by having Thai employers register the migrant workers they periodically employ. Most migrants arrive illegally, find jobs, and their employers register them by paying fees equivalent to about a month's wages for a one-year work visa. Most employers deduct registration fees from migrant wages.

Some 400,000 migrant workers are employed on Thai fishing boats, but only 7,000 were registered in April 2014. Thai employers are reluctant to register migrant workers because, they say, migrants often move from one boat to another before the employer recoups registration fees in wage deductions. Employers want the government to allow registration in the fishing industry on a three-month basis, which would lower the fees.

The Thai military staged a coup in May 2014 and threatened to deport unauthorized migrants from Burma, Cambodia and Laos, saying: "We see illegal workers as a threat because there are a lot of them and no clear measures to handle them, which could lead to social problems." However, the military government added that "The clean-up process of illegal workers will take place gradually, with the intention not to affect Thai businesses that rely on foreign workers."

Some 40,000 illegal Cambodian migrants were reportedly deported during the first month of the military government, prompting over 200,000 Cambodians to leave Thailand in June 2014. When interviewed on the Thai-Cambodian border, some Cambodians admitted that they did not know exactly why there were leaving in haste, but said they were urged to leave Thailand immediately by their relatives who reported that the Thai military government was shooting unauthorized workers. The Cambodian government sent military trucks to border posts to transport the migrants to their home villages.

Most of the Cambodians who left Thailand were employed in construction or agriculture. By July 2014, many of the Cambodians who left Thailand were reportedly returning.

Most of the 2.2 million legally registered migrants in Thailand are from Burma (1.7 million), followed by smaller numbers from Cambodia (395,000) and Laos (96,000); another 800,000 foreign workers are unauthorized. Of these, 1.8 million migrants entered Thailand illegally and were later registered by their employers, while 374,000 arrived under MOUs that Thailand signed with neighboring countries a decade ago. High fees encourage most migrants to arrive illegally.

According to the government, 228,650 Cambodians arrived under the MOUs, 91,800 Burmese, and 54,300 Laotians.

General Sirichai Disthakul, chair of the National Council for Peace and Order's (NCPO) sub-committee on transnational labor, traveled to Samut Sakhon province in June 2014 to reassure employers and migrants in seafood processing that there was no crackdown on migrant workers. The government opened a one-stop center in Samut Sakhon to provide migrants with TR 38/1 work permits after they undergo medical checkups and obtain temporary passports.

TR 38/1 cards cost 1,305 Baht, including 80 Baht for the TR 38/1 card, 500 Baht for a medical check-up, 500 Baht for three months of health insurance, and 225 Baht for work permit cards. Migrants use their TR 38/1 cards to obtain passports and work permits within two months or they become unauthorized.

Thailand and Malaysia in June 2014 were downgraded to Tier 3 on the US Department of State's ranking, meaning that the US thinks they are doing too little to combat human trafficking. Both countries were on a "watch list" for four years before the downgrade.

DOS cited "forced labor and debt bondage" among migrants in Thailand, especially in fisheries, that the government is doing little to tackle. Several Thai firms have filed criminal defamation cases against activists and journalists who allege abuse of migrants, and Malaysia was cited for allowing "deceit and fraud in wages, passport confiscation, and imposition of significant debts by recruitment agents or employers."

During a June 2014 meeting with Thai recruiters, the government warned the 224 registered recruiters not to overcharge migrants and to report government officials who request bribes to process work permits. Some recruiters said that recruiters in sending countries charge migrants high fees to provide funds to pay Thai employers if the migrant runs away before the end of his or her contract.

Vietnam. Several Chinese migrants and Vietnamese border guards died in April 2014 trying to illegally enter Vietnam. The Chinese who died are believed to be Muslim Uighurs from Xinjiang, where there are tensions with the dominant Han Chinese. Some Uighurs are leaving China for southeast Asian countries, from which some hope to go to Turkey and other European countries.