Author: M Niaz Asadullah, University of Malaya
Many ASEAN nations saw a sharp decline in the number of coronavirus fatalities after more than a month in lockdown. New infections in Thailand dropped to single-digit figures and Vietnam has already reopened its economy. The Philippines and Malaysia have conditionally permitted most sectors to resume business.
The earlier nationwide movement control order (MCO) throughout the ASEAN region was necessary. Most of the ASEAN-5 nations saw high infection rates and are considered high-risk countries. Geographic proximity also increases the risk of imported transmission. The recent infections among Malaysians returning from Indonesia is a case in point.
In his speech at the special ASEAN Summit on COVID-19, Malaysia’s Prime Minister Muhyiddin Yassin correctly called for ‘a coherent, multi-sectoral, multi-stakeholder, whole-of-ASEAN approach’ to ensure an effective response to the pandemic. Yet missing from the statement was any reference to the millions of migrant workers in the ASEAN region.
Financially, MCOs have been costly for all ASEAN countries. While Malaysia’s US$365 billion economy remains closed, RM 2.4 billion (US$550 million) is lost each day. But existing regional imbalances in policy provisions could increase the risk of imported transmission as ASEAN members look to officially lift MCOs.
There is growing concern over a new wave of infection when businesses fully resume because 30 per cent of the workforce in Singapore and Malaysia comprise foreigners. A rising proportion of the new COVID-19 cases in Kuala Lumpur and Singapore are migrant workers. A more inclusive policy targeting migrant workforces are needed as these countries prepare to economically re-open.
There are three reasons for protecting the migrant workforce.
First, the economic stakes are high. For decades, these workers have supported local businesses by filling domestic labour shortages. Foreign workers will remain critical to Malaysia’s efforts to restart the economy once MCOs are removed. Without these workers, many small- and medium-sized enterprises may face closures. Every 10 new migrant workers helps create five new jobs for Malaysians and adds a 1.1 per cent net increase to GDP.
Second, Malaysia will look to regain its competitive edge in the unsettled international market once the economy fully reopens. Disruption to global supply chains may present opportunities for Malaysia to venture into new industries post-COVID-19. Continued access to the existing pool of skilled migrant workers is critical in this regard.
Third, border controls are essential to most countries’ COVID-19 response. While migrant workers are important to Malaysia’s economy, they are very capable of entering and crossing borders illegally for jobs when the economy re-opens. Full and fair access to health care and COVID-19 testing facilities in the country of origin within the ASEAN bloc is critical to combat this potential spread.
Malaysia’s RM250 billion (US$83.6 billion) economic stimulus package includes a wide range of support for different categories of businesses and one-off cash payments to low and middle-income households. But there is little in this package for the country’s migrant workers from other ASEAN nations.
The stimulus package exempts employers from bearing the cost of mandatory COVID-19 tests. The cost can be up to RM650 (US$150), almost two-thirds of the monthly minimum wage most migrant workers receive. But in a recent directive, Defence and Security Minister Ismail Sabri Yaakob announced employers would be bearing the costs of COVID-19 tests for foreign workers in Selangor and Kuala Lumpur. Provisions for workers in other parts of the country are still unclear. If all registered foreign workers are tested, the total cost to employers would be RM1.15 billion (US$264 million). The Malaysian Employer Federation insists that the government should bear the full cost of testing, should it become mandatory.
In a positive move, the government recently introduced the COVID-19 test free of charge even for migrant workers registered with the Social Security Organisation (SOCSO) scheme. But provisions for those outside the SOCSO scheme remain unspecified.
Migrants are also disproportionately represented in sectors like construction and tourism that remain closed. Many were forced to take unpaid leave and foreign workers are not eligible for financial assistance.
There is also no state provision to cover the country’s undocumented migrant workers, a population that ranges between 2 and 4 million people. They are most vulnerable to infections and yet reluctant to visit government health facilities as they fear deportation. Despite government assurances, hundreds were taken into custody in early May following immigration raids in Kuala Lumpur.
Without foreign workers, ASEAN countries like Singapore and Malaysia will struggle to bounce back. Migrants face risks that are unique to their living and working conditions, with most residing in crowded shared quarters that lack basic sanitation facilities. Self-isolation and social distancing are not options. Inadequate policy provisions mean that most workers remain untested and uncared for — Malaysia has tested less than 20,000 migrant workers so far, a negligible total.
COVID-19 has exposed a lacking unified social protection system in the ASEAN bloc to protect and nurture its 350.5 million person workforce. The International Labour Organization classifies workers in the informal sector including migrants as a vulnerable employment population. For host nations, the potential social cost of excluding vulnerable workers from safety net provisions is much larger than the immediate fiscal burden of protecting them. Regional policy coordination is vital given poor border control and interconnected labour markets.
Unequal policy provisions across the region may cause an exodus of migrants — the promise of universal care in one country may attract workers from other ASEAN-5 countries. This is why national efforts to suppress the spread of the virus must include regional dialogue and consultation. A well-coordinated response ensuring basic social safety net provisions can go a long way in preparing all member states for post-pandemic recovery.
M Niaz Asadullah is Professor of Development Economics in the Faculty of Economics and Administration at The University of Malaya.
This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.