07/14/2022, 18.08
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Labour shortages threaten economic recovery in Malaysia and Thailand

by Steve Suwannarat

Indonesia’s decision to stop its workers from going to Malaysia because of the latter’s failure to respect a bilateral labour agreement could negatively impact Malaysia’s palm oil production. The Thai Chamber of Commerce estimates that the country needs at least 500,000 foreign workers for its post-COVID recovery.

Bangkok (AsiaNews) – A shortage in foreign labour in manufacturing and agriculture is threatening the economic recovery of Southeast Asia countries.

Restrictions on cross-border movements due to the pandemic and inadequate or outdated regulations are the cause, especially in Thailand and Malaysia

The two countries, respectively the second- and sixth-largest economies in the region, have traditionally relied on immigration.                                                                     

On Wednesday Indonesia temporarily closed its borders to stop its own citizens from going to Malaysia, ostensibly because of the latter’s failure to respect a bilateral labour agreement.

This kind of dispute recurs periodically, and is compounded by the fact that many Indonesian migrants lack proper papers. For Malaysia’s palm oil production, this could have serious repercussions.

Indonesia and Malaysia are the world’s first and second top palm oil producers respectively. Currently Malaysia needs an estimated extra 1.2 million workers.

As many as 20,000 Malaysian companies, half in the agricultural sector, have requested foreign workers, usually provided by Indonesia, Bangladesh, and Nepal. 

An online recruitment platform for domestic workers came in for scrutiny for its alleged links to human trafficking and forced labour.

Indonesian authorities are particularly concerned that recruitment practices have not been upgraded to take into account recruitment agreement signed by the two countries back in April.

Thailand too is experiencing major labour shortages. According to the Thai Chamber of Commerce, the country needs at least 500,000 foreign workers, especially in the construction industry, agriculture, fishing, and tourism.

At the same time, Thai workers are hard pressed finding employment outside the country.

According to the Thai Chamber of Commerce, Thailand’s economic recovery needs three to four million foreign workers. The country’s Department of Employment estimates that some 2.5 million foreign workers live in the country, mostly from Myanmar, Cambodia and Laos.

Their number could rise to at least three million by the end of the year by letting migrants currently working illegally, many from Vietnam, to regularise their status and live and work legally in Thailand until February 2025.

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