Author: Evelyn Devadason, ANU
Malaysia has a total of 1.9 million registered migrant workers, constituting approximately 21 per cent of the workforce, making Malaysia the largest importer of labour in Asia.
Despite the large presence of migrant workers in the economy, the policies and laws regulating in-migration are chaotic. Policies built on the concept of a short-term remedy for labour shortage problems have exposed the failure on the part of policymakers to recognise the critical contribution of migrant workers over the longer term. The problem is compounded by the absence of a comprehensive policy on in-migration as an integral part of national strategies for economic growth.
The inflows of migrants in the various economic sectors have generally been governed informally, although the government has signed Memorandums of Understanding with several designated countries, including Indonesia, the Philippines, Bangladesh, China, Vietnam, Pakistan and Thailand. Following this, the private sector was permitted to set up employment agencies to officially recruit migrant workers from these countries. However, after failing to combat the increasing inflows of illegal migrants, the government, in 1995, put a stop to private sector recruitment agencies and replaced them with a Task Force on Foreign Labour. The frequent pre-1995 sanctions on the importation of migrant workers persisted into the post-1995 period, suggesting that the special Task Force had also failed to stem the employment of illegal workers. The Task Force was then disbanded in 1997, and in 2002, recruitment procedures were subject through G to G agreements.
Apart from the changes in the recruitment process, frequent bans have been imposed to cut back the intake of migrants. These measures are generally short-lived, lasting not more than a year. Retrenchments and deportations of legal workers following any economic downturn have been reversed soon after employers’ problems with labour shortage.
In the course of regulating the use of migrant workers across the various economic sectors, the government has also sought efforts to deter the recruitment and retention of legal migrants by instituting market-based measures, such as the levy system in 1991 (with subsequent upwards revisions made in 1995, 1998 and 2005), the mandatory contributions to the Employees Provident Fund (EPF) in 1998 and the reduction in the maximum limit of the work permit in 2001. However, these policies backfired as employers switched to hiring illegals and under-reporting migrant wages to reduce their contributions to the EPF. As a result, the levies were lowered in 1999, the mandatory contribution to EPF was revoked in 2001 and the limit of the work permit was revised to five years from three years.
Though the laws of Malaysia do not discriminate against migrant workers, in practice, the rights of migrant workers are not protected: workers suffer from non-payment of wages, wrongful deduction of wages to cover work permits, long working hours, sub-standard living conditions, no insurance coverage, travel documents withheld by employers and unfair dismissal.
There are also provisions in existing labour laws with inherent biases against migrant workers. The Workmen’s Compensation Act (which covers migrant workers) provides benefits that are by far inferior to that as provided by the SOCSO (Social Security Organisation) scheme to local workers. Apart from observed differences in the compensation for migrant vis-à-vis local workers, there is no assurance that the injured migrant worker is compensated for under the Act, as this requires the worker to be adequately insured by the employer.
A recent announcement by the Malaysian government requiring employers to buy health insurance coverage for migrant workers effective this month is positive. Yet, this mandate, though it ostensibly benefits migrant workers, is being implemented mainly because of the high amount of unsettled public hospital bills by employers, totaling RM18 million (US$5.8 million) as at November 2010. To date, the details of the health insurance, apart from the annual premium of RM120, have not been made known to the public.
There are three main policy contexts in which migrant inflows are affected through the ‘price’ (labour cost encompassing wages, non-wages and other intangible benefits) effect.
The provisions outlined in the specified Acts that are applicable to migrants need to be reviewed to ensure equal protection for the former with that of their local counterparts. Of importance are the compensations meted out under the Workmen’s Compensation Act 1952. The compensation packages, offered to foreigners in the event of workplace injuries, need to be revised upwards as the payment is too low in comparison with the SOCSO plan for local workers. Equal treatment of migrants with that of local workers will tax away any undesirable cost saving gains borne by employers.
The government is also studying a proposal to increase the levy for migrant workers, with differing rates across skills and sectors. The current annual levy system suffers from several shortcomings. In the case of manufacturing, an annual levy of RM1200 and RM960 (based on the latest revision in August 2005) is imposed on migrant workers in Peninsular and East Malaysia respectively. A blanket levy for manufacturing is not feasible given that the dependence on migrant workers varies considerably across industries.
The final policy issue also under consideration is minimum wages. The Malaysian Trade Union Congress has been pressuring the government to introduce a minimum wage of RM900, plus cost of living allowance of RM300, to attract local workers and reduce the dependence on migrant workers. The key challenge is to identify the appropriate rate for minimum wages as the proposed rate matches up to a basic wage of a semi-skilled worker in Malaysia, lest displacement of jobs may post a greater problem as higher wages relative to neighbouring countries attract more migrant inflows. The argument that a minimum wage will reduce the dependency on migrant workers is debatable and can somewhat be counterproductive given that: first, migrant workers may increase instead of decrease unless transaction costs (such as work permits and levies) are increased sufficiently to render them unattractive; second, local workers may still not be willing to undertake 3-D (dirty, difficult and dangerous) jobs, and even if they do, workers’ productivity with minimum wages becomes another concern; third, the problem of non-compliance and abuse by the various stakeholders which has plagued in-migration in Malaysia to date may worsen as unscrupulous employers resort to illegal workers to undercut cost of competitors.
The core problem is a lack of a comprehensive migrant worker policy and weak governance structures. The Malaysian case is a classic case of the failure of decentralisation in the recruitment and placement of migrant workers, in addition to lack of enforcement of existing regulations by various stakeholders.
Evelyn Devadason is Visiting Fellow at the Australian National University and Associate Professor at the University of Malaya.
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Policy chaos over migrant workers in Malaysia
COVID-19 Vaccine Roll Outs in ASEAN Live Updates by Country
Thailand is currently expecting vaccines to be delivered in mid-2021. The doses would cover 13 million people in a population of about 69 million. Thailand’s National Vaccine Institute signed a non-refundable advance market commitment contract worth 2.38 billion baht (US$79 million) with AstraZeneca to reserve the supplies
ASEAN coronavirus Covid-19 live updates by country
Brunei has joined the global Covax scheme and is expecting to have the COVID-19 vaccine in Q1 2021, having sourced enough supplies to cover 50% of the population. Discussions are on-going with other suppliers.
- Brunei recorded one new case on May 8, bringing the total to 330 cases amid three deaths.
- Brunei saw one new case on May 7, taking the total to 229 cases amid three deaths.
- Brunei recorded one new case on May 4, taking the total to 228 amid three deaths.
Cambodia is expected to import vaccines from both China and Russia. China’s vaccines are still undergoing clinical trials while Russia has already commenced production. Australia has offered financial support to aid vaccine coverage in several southeast Asia countries including Cambodia.
- Cambodia recorded 538 new cases on May 8, bringing the total to 18,717 cases amid 114 deaths.
- Cambodia recorded 558 new cases on May 7, taking the total to 18,179 cases and 114 deaths.
- Cambodia reported 650 new cases and four deaths on May 6, bringing the tallies to 17,621 cases and 114 deaths.
Indonesia has commenced vaccinations with just over nine million doses being given to front line workers from last month. China’s Sinovac is in discussions with Indonesia to provide supplies, however, the Government faces difficulties with a large population of 268 million and price sensitivity at Sinovac’s estimated costs at 200,000 rupiah (US$20) a dose.
Indonesia’s Health Ministry’s Disease Control and Prevention Director-General Achmad Yurianto said that vaccinations would only be provided to citizens aged 18-59. The vaccine has also been required to pass halal certification prior to use and it is uncertain how the country can source enough vaccines to reach a sizeable part of its population. Australia has stated it will also provide financial support to solve these issues.
- Indonesia recorded 6,130 new cases and 179 deaths on May 8, bringing the totals to 1,709,762 cases and 46,842 deaths.
- Indonesia saw 6,327 new cases and 167 deaths on May 7, bringing the tallies to 1,703,632 cases and 46,663 deaths.
- Indonesia reported 5,647 new cases and 147 deaths on May 6, bringing the totals to 1,697,305 cases and 46,496 deaths.
Laos has been trialing the Russian Sputnik V vaccine and is also in discussions with China about acquiring supplies.
- Laos recorded 28 new cases on May 8, bringing the total to 1,233.
- Laos saw 28 new cases on May 7, taking the total to 1,205.
- Laos saw 105 new cases on May 6, taking the total to 1,177.
Malaysia is to provide vaccines free of charge to its nationals, but foreigners will need to pay for the treatment, according to the Malaysian Minister of Health, Tan Sri Muhyiddin Yassin, who has signed a deal with Pfizer for 12.8 million doses.
These will be administered in two stages of 6.4 million people each, with the program to commence in Q1 2021. The country aims to inoculate between 80-100% of its citizens.
- Malaysia reported 4,519 new cases and 25 deaths on May 8, taking the tallies to 436,944 cases and 1,657 deaths.
- Malaysia saw 4,498 new cases and 22 deaths on May 7, bringing the tallies to 432,425 cases and 1,632 deaths.
- Malaysia recorded 3,551 new cases and 19 deaths on May 6, taking the totals to 427,927 cases and 1,610 deaths.
Myanmar is seeking assistance from the Gavi and Covax programs to acquire vaccines, while Australia is also providing financial relief. At present, the Government aims to treat 20 percent of the ‘most at risk’ in the country with vaccines. The Government is struggling with finances and logistics and is also under US sanctions, while cases are surging. The Government has banned the celebration of Christmas and other seasonal celebrations.
- Myanmar recorded 31 new cases on May 8, taking the total to 142,934 amid 3,210 deaths.
- Myanmar saw 29 new cases on May 7, taking the total to 142,903 amid 3,210 deaths.
- Myanmar recorded 16 new cases and one death on May 5, bringing the total to 142,874 amid 3,210 deaths.
The Philippines aims to commence vaccinations from June 2021 and expects to inoculate about 25 million people (about 25 percent of its population) over the course of the year. The country has been badly affected by the virus and has the second-highest rate in Southeast Asia.
The business community has reacted, more than 30 local companies signed an agreement to purchase at least 2.6 million vaccine doses from AstraZeneca in the country’s first such deal to secure coronavirus vaccines, ten days ago. They plan to donate a large part of the doses to the government for its planned vaccination program and use the rest to inoculate their employees.
- The country saw 6,979 new cases and 170 deaths on May 8, taking the totals to 1,094,849 cases and 18,269 deaths.
- The Philippines reported 7,733 new cases and 108 deaths on May 7, bringing the tallies to 1,087,885 cases and 18,099 deaths.
- The Philippines saw 6,637 new cases and 191 deaths on May 6, bringing the totals to 1,080,172 cases and 17,991 deaths.
Singapore has been working on producing its own ‘Lunar’ vaccine, in a joint venture between the US company Arcturus together with the Duke-NUS medical school. It is a single dose, mRNA shot, developed from genetically engineering COVID-19 genes into an otherwise harmless virus. This technique is marginally safer than other vaccines which rely on dead Covid-19 material to provoke an immune response. The vaccine is expected to be available from Q1 2021. High-risk personnel will receive the vaccine first in a process to be determined by the government.
- Singapore recorded 20 new cases on May 8, taking the total to 61,331 cases amid 31 deaths.
- Singapore saw 25 new cases on May 7, taking the total to 61,311 cases amid 31 deaths.
- Singapore saw 18 new cases on May 6, bringing the total to 61,286 cases amid 31 deaths.
Thailand is currently expecting vaccines to be delivered in mid-2021. The doses would cover 13 million people in a population of about 69 million.
Thailand’s National Vaccine Institute signed a non-refundable advance market commitment contract worth 2.38 billion baht (US$79 million) with AstraZeneca to reserve the supplies. Discussions are also on-going with Oxford University in the UK to secure a vaccine that could be available in Q1 if trials are completed in time.
- Thailand reported 2,419 new cases and 19 deaths on May 8, taking the tallies to 81,274 cases and 382 deaths.
- Thailand recorded 2,044 new cases and 27 deaths on May 7, taking the totals to 78,855 cases and 363 deaths.
- Thailand reported 1,911 new cases and 18 deaths on May 6, taking the tallies to 76,811 cases and 336 deaths.
Vietnam’s National Institute of Hygiene and Epidemiology (NIHE), a division of Vietnam’s Ministry of Health, has signed an agreement with Medigen Vaccine, a Taipei, Taiwan-based vaccine company to secure the supply of 3 million to 10 million COVID-19 vaccine doses in 2021. Medigen is currently conducting Phase II studies of the vaccine, co-developed with the USA’s National Institutes of Health (NIH), in Taiwan and Vietnam with a view to a Q1 2021 rollout.
Vietnam is also working on producing its own vaccine, with the Institute of Vaccines and Medical Biologicals (IVAC) in Nha Trang City, partnering with New York City-based Icahn School of Medicine and the global health non-profit organization PATH. Phase 1 trials are already underway in Vietnam, while Phases 2 & 3 will be conducted at the beginning of 2021. The institute plans to submit documents for approval to the health ministry as early as April next year and claims to be capable of producing 30 million doses a year, expecting that a national vaccine could be distributed to the general population in October 2021.
- Vietnam saw 15 new cases on May 8, taking the total to 3,152 cases amid 35 deaths.
- As of May 7, 2021, Vietnam’s Ministry of Health confirmed a total of 3,091 cases of COVID-19. However, 2,560 of the affected patients have recovered and been discharged from hospitals. Vietnam has also recorded 35 deaths due to the pandemic. The latest community transmission cases have been reported from Hanoi, Vinh Phuc, Thai Binh, Bac Ninh, and Da Nang among others. 16 local cases are linked to the National Hospital of Tropical Diseases in Hanoi’s Dong Anh district.
- As of May 6, 2021, Vietnam’s Ministry of Health confirmed a total of 3,030 cases of COVID-19. However, 2,560 of the affected patients have recovered and been discharged from hospitals. Vietnam has also recorded 35 deaths due to the pandemic. The latest community transmission cases have been reported from Hanoi’s outskirts district of Dong Anh.
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