Crises and Crackdowns: The Economic Downturn and Migrant Workers in Malaysia and Thailand

Posted by admin on Oct 1st, 2010

By Charles Hector and Pranom Somwong, Published on: October 01, 2009, Leftturn

Globally, the impact of this “global economic crisis” has been the loss of jobs, pay-cuts, and growing unemployment. Its effects seem to have impacted all aspects of the economy and social life, and the worst affected have been the poor. Amongst workers, the worst affected is the migrant worker. During such difficult times like this, discrimination and xenophobia are so easily cultivated and flourished, and often, it is that foreigner—that migrant worker—that is made the target of discrimination and suffers most. This financial crisis has not spared the economies of East and Southeast Asia. This year Singapore’s economy is expected to contract by as much as eight percent, Hong Kong and Japan by six percent, Thailand by five percent and Malaysia by three percent.

Countries around Asia rely heavily on cheap foreign migrant labor, particularly women migrant workers from Southeast and South Asia, and especially in those very sectors that are now most adversely impacted by this crisis: electronics, manufacturing, food processing and domestic work. The collapsing demand for manufactured goods in the developed world will mean factory closures and the downsizing of most export-oriented manufacturing establishments in Thailand and Malaysia.

In Thailand, where the economy depends on exports of goods and services for 73 percent of its GDP, thousands have lost jobs in manufacturing grounded in automotive and electronics exports, although they are cushioned by a modest social security net for up to six months. The economy is set to shrink by up to three percent this year.

Malaysia predicts that 4.5 percent of its workforce will be jobless this year, up from 3.7 percent in 2008. Unemployment is forecasted at 4.5 percent by the end of the year. Official figures show that from October 2008 until June 2009, about 36,000 have permanently lost their jobs and about 45,000 have been temporarily laid-off, or are facing pay-cuts.

Migrants and the Crisis

There are about five million or more undocumented migrants in Malaysia, while in Thailand there are about four million migrant workers, most of whom are undocumented. The country of origin for most of them is Burma, while there are also large numbers of migrants from Cambodia and Laos in Thailand, and the Philippines and Indonesia in Malaysia. The industries these workers are employed in range from agricultural and fisheries to manufacturing and domestic work.

The poor living and working conditions of Burmese migrants in Thailand and Malaysia and the systematic exploitation and discrimination they face have been documented in many reports around the region. In the face of the current economic situation, the governments of Malaysia and Thailand have clearly been more concerned about their own companies and citizens, to the detriment of foreigners and migrant workers.

In Malaysia, the national response to the economic situation has included increased police crackdowns on and deportation of migrant workers who have been “stealing our jobs and affecting our incomes”—the usual response when the situation in the country is bad. A similar, large- scale crackdown took place in 2005. Of course, this is a hypocritical move since the very reason why the Malaysian government started allowing the employment of the cheaper migrant workers, was because they advocated keeping wages low, and hence attracting investment in Malaysia.

In 2008, the Deputy Chief Minister of Sabah state advocated intensifying the crackdown on migrants by saying: “We must be really serious in protecting our citizens and sovereignty of our country.”

In Thailand, meanwhile, the Prime Minister stoked fears of another crackdown when he said in January 2009: “We have to solve the illegal immigrant problem otherwise it will affect our security, economy and the opportunities of Thai laborers…We will push them out of the country.” Migrants in Thailand have faced similar, often high-profile crackdowns in the past—a “war on illegal foreign workers” was declared by the country’s deputy national police chief in 2003, for example. In a particularly shameful operation in 2004, almost 10,000 pregnant Burmese women were deported from Thailand, in what the government billed as a humanitarian measure to prevent their children from “being born stateless.”

All workers in the Mekong have been deeply concerned that their wages are falling below a living wage, and even below a subsistence level; however, for migrants the impact of a further reduction may have particularly severe repercussions. The survival and well-being of the workers and their families in Burma, as well as the settling of debts incurred during the migration process, will of course depend on their wages.

Two Destinations, One Origin

In response to their situation, migrants from Burma in Thailand and Malaysia met in June 2009 and discussed the impact of the global economic crisis on Burmese migrant workers at the second annual Two Destinations One Origin conference. The conference was attended by several migrants from both countries and was organized by local and regional organizations such as the MAP Foundation, Workers’ Hub for Change (WH4C), and the Network of Action for Migrants in Malaysia (NAMM).

Through their discussions at this meeting, migrants gained not only an insight on the origins and the cause of this “global financial crisis,” but also looked in particular at the impact and response from migrant workers to this crisis. They also looked at their own responses to the actions taken by the Malaysian and Thai governments with regards to this economic crisis.

From the experiences shared at the meeting, it was clear that the Malaysian government’s response showed concern mainly for the companies and the employers. When it came to workers, the government’s first concern was for local workers, with migrant workers a very distant second, and undocumented migrants barely registering as a concern.

In fact, along with the state’s crackdowns against migrants, there has also been an explicit freeze on the employment of new migrant workers. The Malaysian Human Resource Minister clearly stated in January 2009, “We want industries to stop recruiting foreign workers and offer jobs to Malaysians instead.” Backing up this statement, the government cancelled the work visas of migrant workers who had yet to arrive in Malaysia, a move that affected at least 55,000 Bangladeshi workers. There was no talk about compensating these workers for the (in some cases significant) money that they have already spent in preparation for going to Malaysia for work.

The Minister’s very direct statements and moves against new migrants only echo the official stance taken in Malaysia’s Employment Act, which states that the employer “shall not terminate the services of a local employee unless he has first terminated the services of all foreign employees employed.” This clause has become notorious in the country, known as the Foreign Workers First Out (FWFO) policy.

Another major issue for migrants in Malaysia, as in many parts of Asia, has been the levy imposed on employers who hire migrant labor. The rationale behind the US $331 – $500 charge has always been to discourage people from employing foreigners. In April 2009, there was talk of doubling this levy in order to further discourage the employment of migrant workers.

However, the reality of the policy has been that employers, with the permission of the Malaysian government, deduct the levied amount from the wages of migrant workers. Hence, the proposed doubling of foreign workers levy would bring far greater suffering on the migrant workers than on their employers. After angry protests from smaller businesses, the government eventually withdrew the plans to increase the levy.

There was still further use of the levy policy to encourage employers to lay off foreign workers—as of February 2009, employers can now be refunded the unused levy from the firing of a migrant worker within a month of termination. Prior to this, the bosses had to wait several years before they could have that money refunded.

In 1998, after the last major economic crisis that affected this country, the Malaysian Trade Union Congress (MTUC), the biggest body representing over 500,000 unionized workers, proposed the setting up of a National Retrenchment Fund, a fund that would be able to assist workers that lose their jobs during such an “economic crisis.” But, the Malaysian Government was not interested. On the other hand, the government set up a Human Resource Development Fund, a fund that employers can resort to during bad times.

The retrenchment fund proposal, however, did not include migrant workers. Sadly, during bad times local workers unions also pay less interest to the plight of migrant workers—their fellow workers from a country not their own.

Continuing the struggle

Aside from migrant workers coming together in venues such as the Two Destinations conference, there have been other local and regional responses by organizations to the economic crisis and their respective government’s actions.

In March 2009, a major statement from fifty-nine local and regional labor organizations, groups and networks stated that they were “appalled at Malaysia’s unjust, discriminatory and unconstitutional anti-worker policy, known as the ‘Foreign Workers First Out’ (FWFO) policy.” They also pointed out that “this ‘Foreign Workers First Out’ (FWFO) policy and practice is unconstitutional, as it goes against Article 8 of the Malaysian Federal Constitution, which states ‘All persons are equal before the law and entitled to the equal protection of the law.’” There is nothing in the Constitution, they said, that permits discrimination against non-citizens.

In Thailand, the Thai Labour Solidarity Committee [TLSC], a major national network of labor organizations, have since 2008 also been raising the concerns of migrant workers. Migrant foreign domestic workers in Thailand, for example, have participated in many TLSC events and campaigns, and have raised the specific issues of discrimination and lack of protection for workers in their industry. A report and petition were also submitted by TLSC to the Thai Labour Department, outlining the issues that were arising concerning migrant workers and calling for the removal of unjust laws and government policies targeting migrants. The group has been raising the issue of better protection for all workers, including migrant workers.

And in Cambodia, a major labor-sending country, trade unions marched on May Day. Facing a heavy police presence, they lamented the economic recession, poor wages and increasing food and transport costs in their country. They called on their government to stimulate the employment market, and to improve working conditions, provide the living wages in all sectors.

As we can see, the mix of official and systemic discrimination, exacerbated by the current political and economic climate, has meant that migrant workers are some of the hardest hit by the “global economic crisis.” But there have been responses and efforts by migrant workers and their supporters in our region to address these issues. Migrant workers have shown that their resolve is strong, and they will not crawl into a corner and give up. They will continue the struggle for human rights and worker rights.

Charles Hector is a Malaysian lawyer and a workers’ and human rights activist. He is co-founder of the group Workers’ Hub For Change. You can read more of his writings at Charles Blogspot

Pranom Somwong is a Thai activist and long-time organizer among Burmese migrant workers in northern Thailand. She is currently based in Malaysia and is a co-founder of the Workers’ Hub for Change.

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