Malaysia look to limit foreign manpower, Bangladesh likely to bear brunt

Bangladesh may soon lose one of its biggest sources of remittance inflow if Malaysia limits importing foreign workers to their labour market.

Malaysian Prime Minister Mahathir Mohamad recently announced the country would review its labour laws to cut an "over-dependence" on foreign labour and address other issues, amid simmering discontent against overseas workers who make up 46% of the labour force.

Malaysia is Bangladesh's third largest manpower export destination, behind Saudi Arabia and the United Arab Emirates, going by Bangladesh Manpower Export and Training Bureau (BMET) statistics for FY2018-19. The country received $1.09 billion remittance from Malaysia, which is 6.86% of the country's total remittance earning.

"These reforms are crucial, not only in developing human capital to support our future economic growth but also in addressing job mismatches which contribute to graduate underemployment, unemployment, and slow wage growth as well as over-dependence on foreign labour," Mahathir had said.

Malaysia's unemployment rate stood at 3.3% in 2019, up from 3% in urban areas and 2.8% in rural areas in 2014.

Sources at the statistics department of Malaysia said that in the last five years, the rate of participation of Malaysian nationals in the workforce also came down to 68.3% from 86.8%. During this period, dependence on foreign workers also increased.

A total of 1,056,511 labourers went to Malaysia with legal work permits till December 2018, of whom, 175,927 workers went in 2018 and 99,787 workers in 2017.

The Malaysian government has already proposed a draft law on employment and labour force, to replace the Employee Act, 1955.

Articles 57 and 60 of the draft law, titled Employment and Labour Law, 2019, gives guidelines about foreign labour import, their salaries, safety standards, and work categories, but it includes no provision regarding the ratio of local to foreign workers in the country's labour force.

Benazir Ahmed, president of Bangladesh Association of International Recruiting Agencies (BAIRA), said: "Due to various complications, Malaysia has not been taking workers from Bangladesh for a long time. In this situation, if the new law comes into effect, it will impact our labour market the most."

Prof Dr Tasneem Siddiqui of Refugee and Migratory Movements Research Unit (RMMRU) at the Dhaka University said: "If the Malaysian government wants to limit the number of foreign workers, they need to fix the ratio of local and foreign workers in all firms.

"They can reduce the number of foreign workers in important sectors such as service, manufacturing and plantation," she told The Business Standard, adding Bangladesh will face problems as Bangladeshi labourers are lagging behind in terms of skills in these sectors, compared to those from other countries.

However, Bangladesh's Expatriates Welfare and Overseas Employment Minister Imran Ahmed disagreed: "Although the Malaysian government has announced cutting down on the number of foreign workers, the real picture is quite different.  In about 1.5 years till December 2018, about 200,000 workers have been sent to Malaysia."

He added that the Bangladesh government has spoken to its Malaysian counterpart and that they are interested in taking more workers from Bangladesh soon.

According to the Department of Statistics of Malaysia, at present 15 million workers are employed in the service, manufacturing, plantation, agriculture and construction sectors. Of them, about 7.5 million or 48% are foreign workers.

Bangladeshi labourers are ahead of all other countries in the Malaysian workforce, except for Indonesia, Philippines and India, according to the Manpower Development Ministry of Malaysia.  

The Malaysian Human Resources Department alleged that at present, 550,000 workers are working legally in the country, while over 200,000 are working without permits.

Growing discontent with Bangladeshi workers

The Malaysian government has been hesitant to import Bangladeshi labourers since as early as 2009.

Although Bangladesh wants to increase manpower exports through various agreements and memoranda of understanding (MoUs) with Malaysia, they often cancel them after raising allegations of corruption and social crimes against workers already residing there.

On November 26, 2012, both nations signed a G2G (government to government) bilateral agreement for sending workers to Malaysia through government initiatives instead of manpower exporting agencies.

However, it did not produce the expected level of manpower export.

In 2016, the two countries signed a G2G Plus (government to private) MoU for manpower exports to Malaysia, but it too did not last long.

Following bilateral meetings that ended in December 2018, about 250,000 Bangladeshi workers were allowed into Malaysia.

However, Malaysia again stopped manpower import from Bangladesh at the beginning of 2019.

Migration experts think that Bangladesh has been lagging behind in manpower export to Malaysia mainly because of weak diplomatic relations with the country, compared to the Philippines, India, Indonesia and Pakistan.