Southeast Asia's Foreign Workers

Professors studying labor migration in Asia say countries in the region will scuttle to protect their economies from the global financial crisis but avoid edging out foreign workers as a global financial collapse seeps into real sectors, relatively good news for Indonesia and the Philippines, which have millions of workers overseas.

One of them is Dr. Yap Mui Teng of the Lee Kwan Yew School of Public Policy under the National University of Singapore, who says that while Singapore will experience a "sharp economic downturn that is the most severe in the country's history," the Southeast Asian financial hub will still need foreign workers.

As countries across the world grapple with the effects of the crisis, nation-states are witnessing the decapitation of their respective labor markets.

Teng says it is unavoidable that companies cut costs and fire foreign workers first and nationals last: Singapore companies forecast a minus 5 percent gross domestic product growth rate for this year. What's currently happening in Singapore, he says, is that more foreign workers are complaining of unclaimed salaries, being subjected to "no work, no pay" situations. He adds there are some instances of repatriation if manpower agencies cannot place these foreign workers.

Teng affirmed forecasts of analysts that an expected 50,000 foreign workers will lose their jobs this year, especially those in the manufacturing and construction sectors. An estimated 143,000 highly-skilled foreign workers in Singapore hold employment passes. In addition, an estimated 757,000 semi-skilled foreign workers hold work permits. The latter category include domestic workers.

A recent World Bank report on its outlook for East Asia and the Pacific region affirms Teng's views, saying that "As unemployment in the region and around the world begins to climb, migrant workers, wherever they are, are likely to be among the first to lose their jobs."

Report writer Ivailo Izvorski added this "will mean lower remittance flows to the poorest countries in the region and, if the migrants return home, a worsening unemployment in those countries as well as further downward pressure on real wages, especially in the informal sector that would directly affect the poor."


Near Singapore is Malaysia, which Dr. Vijayamukari Kanapathy says is also feeling the pinch. Kanapathy said migrant workers will be among the 400,000 workers that her country's employer federations forecast to be laid off this year. The situation is especially glaring for Malaysia's manufacturing sector, whose biggest market is recession-hit United States.

The policy responses of Malaysia's government for migrant workers is that they will be terminated first, that there's freeze hiring of migrant workers, and that the deportation of undocumented migrants will be fast-tracked, Kanapathy said.

A bright spot, Kanapathy adds, is that the crisis may possibly see the government regularizing some of the undocumented workers in Malaysia's informal sector. But Malaysia is "extremely cautious," she says, in dealing with migrant workers as it has a "soft policy" to encourage these foreign workers to leave Malaysia. And since migrant workers hold an annual work permit, "it is easy for Malaysian employers to retrench them." .

As of September 2008, Kanapathy says Malaysia has retrenched an estimated 5,5867 migrant workers — the majority of them in manufacturing. She said she didn't have the data on which country these workers came from.


Thailand is both a sending and a receiving country of migrants and refugees. Dr. Supang Chantavanich of the Asian Research Center on Migration based in Chulalongkorn University said she expects increased hiring of construction workers and domestic workers amid the crisis. It is only these two sectors' migrant workers who will not be affected by the crisis "due to increasing needs for them," she added.

Chantavanich said Thailand currently has 76,206 foreign construction workers and 53,933 foreign domestic workers. It is likely, however, that the Thai government will not extend the work permits of some 200,000 documented migrant workers come the year 2010, and that Thai nationals will be hired first. If foreign workers wish to extend their work permits, "they have to apply through Thai line government agencies," she added.


The global economic crisis, for economist Park Young Bum of Hansung University, has further "polarized" the Korean labor market as some 6,707 foreign workers have been retrenched as of December 2008. These retrenchments are due to the bankruptcy and shutting down of small- and medium-sized enterprises in Korea, Park said. The government has suspended the issuance of work visas (called the E-9 visa) to foreign workers until the year 2010, with the Korean government having an annual quota of 72,000 issuances of these work visas until February this year.

But don't expect an increase of the E-9 visa quota for the country soon, said Park, due to the "shrinking labor market"

Korea's government will also try to subsidize small and medium enterprises who will replace foreign workers with Korean workers, to the tune of 1.2 million won per newly-hired local worker. Since November 2008, Korea has also sent back home some 8,000 undocumented migrant workers. Again, no breakdowns by nationality were given.

As of October last year, the estimated undocumented migrant workers in Korea numbered to 219,596, down from 224,965 in January 2008. Yet Park thinks that the country will likely depend on unskilled foreign labor as a massive repatriation of foreign workers "is not possible".

These situations affecting foreign workers in East and Southeast Asia are familiar territory for these countries, especially so that the region had experienced the Asian financial crisis in 1997. Thus, Scalabrini Migration Center director Dr. Maruja Asis thinks that repatriation, more border controls, punitive penalties for undocumented migrant workers, and no new or higher levels of employment in host countries will be the same scenes this year as in 1997.

For countries like the Philippines that send out labor to overseas markets, expect increasing documented and undocumented overseas migration, rising numbers of returning migrant workers, and the increasing role of remittances this year as in 1997, Asis said.

Singapore, Malaysia, Thailand and Korea are among the target destination countries for Filipino migrant workers.

Figures of deployed migrant workers in 2007 from the Philippine Overseas Employment Administration (POEA) show that the four countries received 76,565 new-hired and re-hired Filipino workers. As of January, 74 OFWs who worked in Korea's electronics sector have been retrenched. There are no reported displaced OFWs from Singapore, Thailand, and Malaysia thus far.

In her paper titled "The Impact of the Global Financial Crisis on Employment," Labor Undersecretary Rosalinda D. Baldoz said 6,406 workers were displaced as of March 12, 2009. Some 4,197 came from Taiwan while 1,357 were at the United Arab Emirates. The 74 Korea-based OFWs are part of the 5,036 displaced OFWs reported by the POEA, said POEA director Liberty Casco during a multi-sector workshop on the global financial crisis that the Department of Labor and Employment convened last January 30.

De La Salle University professor and migration analyst Stella Go told participants to a workshop organized by the Scalabrini Migration Center and the International Labor Organization that despite the crisis, international labor migration "hasn't adversely affected" the Philippines, owing to increasing deployment to old and new labor markets, and because of rising remittances.

What worries Go, however, is that the crisis might increase the risks facing OFWs who work in "vulnerable occupations" such as domestic help and construction.

"They might be exposed to wage cuts and less-ideal work conditions," she added.

Jermiah M. Opiniano and Isagani De La Paz write for th OFW Journalism Consortium