Malaysia is one of Asia's biggest employers of foreign labour. But recently, cases of deaths, abuse and forced labour have come to light. What is going on? Who is protecting these migrant workers?
BY JENNIFER GOMEZ
Reducing remittances by foreign workers to their home countries is an unfair move which not only hurts their families but Putrajaya as well, stakeholders said of a proposal aimed at stemming the outflow of the ringgit.
Instead, the government should tackle Malaysia’s dependence on foreign labour, a trade union group said, while a money services association warned of the loss of federal revenue if foreign workers opted for informal remittance channels.
These groups were responding to a report by Sin Chew Daily last week that Putrajaya was considering a mechanism to reduce remittances by foreign workers.
It would be managed by the Home Ministry and could possibly entail a scheme requiring workers to pay a part of their monthly salaries into a fund.
Alternatively, their salaries could be deducted directly as a remittance to the fund, in a manner similar to the Employees’ Provident Fund (EPF) contributions, it was reported.
But the Malaysian Employers Federation (MEF) said it was not right for the government to control their remittances.
“These are the wages of foreign workers, it just does not seem right that they come here to work in order to feed their families and the government controls their remittances,” said MEF executive director Datuk Shamsuddin Bardan.
He also expressed concern that any proposal for part of their wages to be paid into a fund would increase the cost of hiring them.
Malaysian Trades Union Congress secretary-general N. Gopal Kishnam agreed with Shamsuddin, calling the proposal “fundamentally wrong” and unfair to foreign workers.
As it is, migrant workers have to fork out about RM100 a month in levy to the government, when this should actually be paid by employers. Some workers also pay another RM50 a month for accommodation out of their own pockets.
“The levy should at least be borne by employers, but the government loves employers so much they make the migrant workers pay,” Gopal said.
He said most foreign workers earned RM900 a month, and slogged up to 14 hours a day working overtime to increase their salary by a “couple of hundred”.
Neither were they spared the rising cost of living in Malaysia, he added.
Gopal said instead of putting restrictions, Malaysia should look at shifting its economy from being labour-driven to being technology intensive, adding that South Korea and Singapore have been able to do this.
“At the end of the day, the government is responsible for allowing so many labour-intensive industries to exist and continuing dependence on foreign labour.”
Shamsuddin agreed, saying that the government must look at reducing reliance on foreign workers and instead ensure jobs at supermarkets and restaurants were taken up by locals.
“There is no reason a local person would not want to work in the retail sector, where you currently see counters in these outlets managed by foreign workers.
“So much so that when a local applies even for a temporary or part-time position, there is no vacancy.”
Shamsuddin said getting more locals to work these jobs would also boost the economy as locals would spend their money here, while foreign workers would not spend as much.
Malaysian Maid Employers Association (Mama) president Engku Ahmad Fauzi Engku Muhsein, however, welcomed the proposal as a positive step to reducing the outflow of funds but said there must still be enough for foreign workers to send home.
“It is all right if there can be a system where we keep that money as savings for them, but they need to be able to send back enough to meet their family’s needs back home,” he told The Malaysian Insider.
Ahmad Fauzi suggested that Malaysia study models used in other countries, such as Singapore’s Central Provident Fund.
“Whatever we implement, it must not be too harsh to foreign workers, at the same time, the proposal is good as we need to protect the interest of the country.”
Impact on remittance business
The proposal could hurt Putrajaya in other ways, especially revenue collection from the goods and services tax (GST) when using formal remittance services.
The Malaysian Association of Money Services Business (MAMSB) said the federal government would stand to lose revenue if foreign workers used informal channels to remit money home.
It would also negate efforts by Bank Negara Malaysia to promote the use of formal remittance channels and reduce vulnerability to money-laundering risks, the association said in an email interview.
Remittances by legal foreign workers have been on the increase since 2007 when legal non-banking institutions were allowed to provide such services, MAMSB said. As a result more foreign workers had access to formal and legal channels to remit funds.
“This allowed for better collection of data on the transactional patterns of this segment which was heretofore relatively unknown.
“Any restriction on foreign workers’ repatriation of funds may inadvertently drive them to informal channels to remit their funds which will be counter-productive to the traction gained thus far through various efforts,” MAMSB said.
It was also unfair to foreign workers, the association added, as the drop in the ringgit’s value against the US dollar has resulted in lower amounts sent home to their families.
“To illustrate the point, a year ago, the ringgit to the Bangladeshi taka was 26. Today, the exchange rate has reduced to an average of 18 taka for each ringgit.
“Any plan to impose restrictions on their income may further aggravate matters and have far-reaching socio-economic impact on their families in their home countries,” MAMSB said, adding that in the absence of greater details, the proposal had more negatives than positives.
It was reported that between January and September last year, foreign workers remitted about RM23.07 billion out of Malaysia through some 113 million transactions.
A government study also found that foreign workers remitted about 80% of their salaries back to their home countries.
Official figures put the number of legal migrant labourers in Malaysia at 2.2 million, although MTUC has estimated that there are seven million foreign workers in total, the rest of them illegal. – October 28, 2015.
Source: The Malaysian Insider
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