KUALA LUMPUR (Oct 9): To maximise the benefits from labour mobility, Malaysia could adjust its migration policies to its economic needs by revising current levy system and deepening coordination with sending countries, said the World Bank.
In a statement today, the bank said its simulations showed a 10% net increase in low-skilled immigrant workers raises Malaysia's real GDP by 1.1%.
Malaysia, along with Singapore and Thailand, has been turned into regional migration hubs since intra-regional migration in ASEAN rose significantly between 1995 and 2015.
The three countries alone account for 6.5 million migrants or 96% of the total number of migrant workers in Asean, according to the bank's report Migrating to Opportunity.
Low-skilled, and often undocumented, the World Bank noted that ASEAN migrants move in search of economic opportunity, mainly in the construction, plantation, and domestic services sectors. While it noted higher-salary jobs are available, workers are not always able to take advantage of these opportunities.
Though the ASEAN Economic Community has taken steps to facilitate mobility, the bank said these regulations only cover certain skilled professions — doctors, dentists, nurses, engineers, architects, accountants, and tourism professionals — or just 5% of jobs in the region.
"With the right policy choices, sending countries can reap the economic benefits of out-migration while protecting their citizens who choose to migrate for work.
"In receiving countries, foreign workers can fill labour shortages and promote sustained economic growth, if migration policies are aligned with their economic needs. Inappropriate policies and ineffective institutions mean that the region is missing opportunities to gain fully from migration," said Sudhir Shetty, World Bank Chief Economist for the East Asia and Pacific region.
But overall, it said migration procedures across ASEAN remain restrictive, as barriers such as costly and lengthy recruitment processes, restrictive quotas on the number of foreign workers allowed in a country, and rigid employment policies constrain workers' employment options and impact their welfare.
These restrictive policies are partly influenced by the perception that an influx of migrants would have negative impacts on receiving economies, though the bank said there is evidence to the contrary.
Malaysia and Singapore, its report highlighted, have the lowest international labour mobility costs in Asean, which reflects their openness to globalisation, their efforts to develop migration systems that meet labour market needs, and their geographic centrality in the region.
Easing restrictions on labour migration can boost workers' welfare and deepen regional economic integration, said the bank.
Some US$62 billion in remittances were sent to ASEAN countries in 2015. Remittances, it said, account for 10% of GDP in the Philippines, 7% in Vietnam, 5% in Myanmar, and 3% in Cambodia.
"No matter where workers wish to migrate in ASEAN, they face mobility costs several times the annual average wage. Improvements in the migration process can ease these costs on prospective migrants, and help countries respond better to their labour market needs," said World Bank Economist for the Social Protection and Jobs Global Practice Mauro Testaverde, the lead author of the report.