The Impact of the Economic Crisis on Migrant Labor in Malaysia: Policy Implications
The regional crisis will increase employment and income inequalities within and between countries, thereby further increasing emigration pressures and drawing into sharper focus the disjunction between capital movement, State sovereignty and migration. Malaysia, with one of Asia's largest foreign labor pools, is a case in point. The financial crisis has hit most sectors, but migrants in construction and services are particularly affected. Official retrenchment data do not include the tens of thousands of documented migrants whose permits were not renewed on expiry, or the undocumented migrants repatriated. Though security concerns appeared to override market factors soon after the crisis broke out, demand for labor, employer pressure, and the prospect of higher revenues from migrant levies and pension fund contributions encouraged the State to change its stance and adopt a more flexible policy on migrant recruitment. Nationally, there is an urgent need for a clearer social consensus, culminating in a more consistent, predictable and detailed program to reduce foreign labor dependence. Regionally, governments have to create more jobs and reduce poverty so that migration pressures are eased.