Indonesia concerned about workers’ safety . . .
Indonesia has announced a temporary freeze on sending its citizens to work in neighbouring Malaysia. Jakarta claims that Malaysia's continued use of its Immigration Department's Maid Online System (MOS), a platform for attracting and hiring foreign domestic workers, violates an agreement signed by both governments in March. That agreement stipulates that both countries should use the One Channel System, another online worker placement mechanism with improved worker tracking, zero recruitment fees, wage transparency, and employer vetting. Labour and immigrant activists argue the MOS facilitates trafficking and forced labour because it does not require prospective employers or recruitment agencies to account for workers' working conditions, contracts, and general safety. The system also allows questionable recruiters to easily switch an Indonesian worker's tourist visa into a working visa without verification of the worker's age or prospective labour conditions. The worker freeze announced Wednesday is the second Jakarta has imposed in six months.
Malaysia faces critical labour shortage . . .
The labour freeze is a significant blow to Malaysia, the world’s second-largest palm oil producer (behind Indonesia) and an export-oriented economy well integrated with global supply chains. The country faces a critical labour shortage and needs approximately 1.3 million foreign workers, about 30 per cent of its workforce, to meet current demand. According to private sector reports, Malaysia requires at least 600,000 workers in manufacturing, 550,000 in construction, 120,000 in the palm oil industry, and 15,000 in semiconductor fabrication. The labour crunch has led to dire losses for Malaysian firms, with palm oil plantations and semiconductor makers refusing orders.
Widespread impacts on Malaysia’s economy . . .
After a pause during the pandemic, Malaysia started allowing foreign workers again in February. However, the influx of migrant workers remains a trickle. Sluggish government approvals and drawn-out bilateral negotiations with Indonesia and Bangladesh – Malaysia’s top two migrant labour source countries – over labour protections and generally poor treatment of migrant workers have slowed the return of foreign workers. Protracted labour shortages will undoubtedly slow down pandemic recovery and prevent Malaysia from taking advantage of international investors seeking diversification away from China.
- Malay Mail: Amid migrant labour crunch, experts warn Malaysia increasingly unattractive to foreign workers
- Reuters: Indonesia imposes temporary freeze on sending migrant workers to Malaysia
- South China Morning Post: Malaysia losing billions in sales as firms turn down orders due to migrant labour shortage