Malaysia - Managing Foreign Labor - Research Paper Example

Malaysia Introduction. Country background Malaysia is a very interesting country to analyze. It is situated in Southern Asia. The neighboring countries of Malaysia are Thailand, Indonesia and Brunei from the land and Singapore, Vietminh and Philippines from the sea. The territory of the country is 127,320 sq. mi. The population of the country amounts to 22.2 million people. Malaysia is a federal constitutional monarchy and the head of the state is a king Yang di-Pertuan Agong. The king is elected by and among the nine hereditary heads of royal families. The political party in power is Barisan Nasional. The executive power is the Cabinet and the current Prime Minister is Najib Razak. Legal system is based on common law. Malaysia is a market economy. GNP is $67 billion, GDP is 6%. The renewable natural resources are palm oil, timber, rubber, the nonrenewable natural resources are oil and tin. Major exports are petroleum, timber, tin, palm oil, major imports are electrical devices, steel, food. The specific aspect on which the paper will concentrate is foreign labor; it will discuss the rights and the programs aimed at managing labor. The paper will prove that it is necessary Malaysian government should provide necessary changes as labor policy appear to be too strict. Business proposition Malaysia provides limitations through age and nationality restrictions. Workers should be between 18 and 45 years of age, and no resettlement of dependents in Malaysia is allowed. Only citizens of Philippines, Indonesia and Thailand are issued passes for domestic/ household employment; for the manufacturing, construction, plantation and service sectors, the list of eligible nationalities is extended to include Bangladeshis and Pakistanis. (Blau, 1996) The legislation and opportunities in the sphere of foreign employment and giving foreign workers opportunities for professional growth and promotion is even stricter than that of Singapore, because even skilled professional workers are not allowed for permanent residence, and though they are able to receive visas for their dependents, the list of the key posts which they can hold in the organizations which hire them is very narrow and depends on the level of the enterprises foreign paid-up capital. (Kiong-Hock, 2002) It appears, that the Malaysia view foreign labor as the threat to the employment of its native population and thus does not see any need in giving them opportunities for employment, while the same opportunities can be used by the local citizens. The country seems to refuse accepting the reality, in which it rapidly grows, and thus foreign labor becomes the integral part of its growth, especially taking into account that its cost is relatively cheaper and thus is a beneficial option for the Malaysian employers. Moreover, foreign seekers of employment agree to accept poorer conditions of work and living for the same jobs, in which local population would not work. “Foreign workers in both Malaysia and do not benefit from the same social protection in terms of the pension savings scheme requiring employer and employee contributions for Malaysian nationals, effectively lowering the cost of foreign labor further”. (Sowell, 2005) There are certain objectives to the both systems, and while the country stems the situation with foreign labor through permit system and strict limitations, and while we see that Singapore exercises a slight analogue of affirmative actions for the professional skilled workers, and Malaysia has none, it becomes evident that both countries require close re-consideration of this situation. The management of the foreign labor is performed not through the prism of equal opportunities, but through the prism of controlling and directing labor force flows, creating the structure of labor which is the most desirable for the states economy. Malaysia is a big country with diversified population structure, which is able to provide itself with the necessary local workers and thus needs serious regulation to decrease unemployment among local population. The high level of unemployment is explained by too strict foreign labor policy. Evidence It should be noted that the policy of Malaysia is not mainly aimed at implementation of affirmative actions, but is rather aimed at managing foreign labor. Chew & Chew (2003) write, that “Malaysian foreign labor management relies on immigration regulations”. This means that Malaysia closely watches the situation with the incoming foreign workers, and regulates their number, qualification and wages; the affirmative actions of Singapore are mainly aimed at ensuring that foreign labor is brought to the country officially, which ultimately defines the welfare of the foreign workers and works against abuse and their discrimination. (Soon & Tan, 2003) The central aspect of the Malaysian labor affirmative regulation is promoting skilled workers with opportunities of getting satisfactory salaries and prospect for permanent residence; non-skilled counterparts are deprived of many benefits in Malaysian labor market; in this way Malaysia tries to encourage local firms to hire local employees and to decrease the portion of the foreign labor in the country. “Unskilled workers, who fall below a maximum salary cap equal to US$1,190 per month, are eligible for work permit. Additional restrictions to dissuade permanent settlement of unskilled foreign workers include limits to personal freedoms such as prohibiting reunion of workers dependents, marriage to a Malaysian national and pregnancy” (Sowell & Tan, 2003) The fact of such serious discrimination of unskilled workers is supported by the law, which makes all unskilled foreign female workers subject to obligatory pregnancy tests; in case the results are positive, women are deported from the country. Professional skilled workers are given permit for employment in Malaysia in the strictly limited number of industries, the list of which is also regulated at the state level – these are construction, harbor and marine craft sectors, and this category of workers is not limited in their freedoms and is allowed for permanent residence. The Malaysian affirmative action policies work for the support of skilled workforce. Sowell (2005) writes that “services to ease the settlement and assimilation of workers into Malaysian society are provided by government established Social Integration Management Service to encourage permanent integration of workers with the desirable skills into the labor force”. (Sowell, 2005) This means, that the policies which theoretically should provide every foreign worker with equal opportunities, in this country are meant to provide these opportunities only in limited volumes and only for those workers, whose skills are supposed to be necessary to the economy of the country. For this category of employees the government gives additional incentives, providing them with free access to healthcare, education and related programs (Chew & Chew, 2003). . Conclusion While the globalization is known for promoting equal opportunities for everyone, especially in the sphere of employment, Malaysia have been seen as having none of such policies, and on the contrary, working for strict limitation of the foreign labor presence within its market. The policies invented by the government, which are meant for the proliferation of the good and safe employment opportunities, in reality appear to work against the state economy due to their imperfection and serving for the spreading of non-skilled workforce in the country. The government of the country should review the foreign labor policy that is too strict and prevents the country’s economy from growth. Foreign labor, if not regulated so strictly, could work for benefit of Malaysia. Malaysia is a big country with a great amount of population, which is able to provide itself with the necessary local workers and therefore its regulation has to be changed in order to decrease the level of unemployment. Works Cited Blau, D. (1996). Self-employment, earnings and mobility in Peninsular Malaysia, World Development, 14(7): 839-852 Chew, S. & Chew, R. (2003). Immigration and foreign labor in Singapore, ASEAN Economic Bulletin, 12 (2): 191-200 Kiong-Hock, Lee. (2002). Contract labor in Malaysia: Perspectives of principal employers, contractors and workers. International Labor Review, 135(1): 75-82 Soon, T. & Tan, C. (2003). Singapore: Public policy and economic development. Washington D.C. Sowell, T. (2005). Affirmative action around the world: An empirical analysis. Yale Read More