This article first appeared in The Edge Malaysia Weekly on April 20, 2020 - April 26, 2020

THUS far into the Covid-19 pandemic, the government has not said much about the plight of migrant workers in this country. Yet, this community is almost 10% of Malaysia’s total population of 32.6 million. The exact number of migrant workers is not clear but legal workers are documented at about three million. Undocumented migrant workers, according to some estimates, number anywhere between three and four million.

In the short term, some measures will have to be taken — first, to ensure that the virus does not become widespread in this community and, second, to provide some form of aid to the jobless migrants to prevent their plight from developing into social disturbances that may threaten internal security.

More importantly, the crisis has provided an opportunity for this country to reformulate policies and put in reforms to reduce our dependence on foreign labour. This time around, it may be easier to achieve better results, boosted by two key factors — technology as an enabler and companies being pushed by the crisis to rethink work processes to cut cost and raise productivity to stay in the game.

Given their long-time presence in this country, there is no lack of awareness of the adverse impact of this over-reliance on migrant workers in the long term. But in the past, when the economy was humming along nicely, this issue was placed on the back burner because there was little urgency to seriously address the problem. After all, migrant workers are mostly in jobs that the locals may not want, and they do have a role in the local economy.

However, things have changed today, unlike during past economic and financial crises, where the impact was muted. In 1997/98 and again in 2008/09, the number of migrant workers was not as sizeable as today, and many could still go home when they lost their jobs.

The current pandemic and the economic fallout have brought this issue into focus again. And the one blind spot in the government’s efforts to mitigate the impact of the crisis, both from the health and financial perspectives, seems to be the migrant worker community.

Singapore made the same mistake in the early days of its attempt to control the Covid-19 pandemic, some news reports have noted. The migrant community was off its radar during the early stages of its response to the pandemic and today, infections among the migrant workers are rising. According to the latest news reports, as at April 14, out of the 3,252 cases, 1,625 were linked to the outbreak in the migrant worker community.

In Malaysia, while infections among migrant workers are not reported, the economic fallout is already being felt. So, this elephant in the room, so to speak, must be addressed sooner rather than later.

The Covid-19 induced economic crisis isn’t likely to end anytime soon, and many companies that do not have the financial strength to stay afloat may have to call it a day. Already, global institutions like the International Monetary Fund (IMF) have warned that the global recession that looms will likely be the worst since the Great Depression years of the 1930s. On the domestic front, the view of an increasing number of experts is that the economic recovery, when it comes, will not be the V-shaped kind seen after the Asian financial crisis in 1997/98 and the global financial crisis in 2008.

The problem of migrant workers is complex. The thing is, foreign workers, who once were predominantly found in the agriculture and construction sectors, are now present across a broad spectrum of the economy — from agriculture to construction to services and manufacturing. They have become an integral part of Malaysia’s workforce.

The pandemic has crippled economic activities and unemployment is on the rise as companies struggle to stay afloat. Industry observers say the situation has not reached a critical stage yet, but if the Covid-19-induced recession drags on for longer than expected, this group may be the one of the most vulnerable.

Wong Chen, MP for Subang, says that in the short term, the government needs to feed migrant workers who do not have any income and at the same time, provide them with health services. It is a daunting task but it is something that needs to be handled immediately. “No Malaysian is safe if we are surrounded by infected illegal migrant workers that are off the public health radar.”

But of course, it is not just from a health perspective that we should be worried about. Illegal migrant workers are now caught in a bind — they have no income and they cannot go home because of the lockdown. They do not pay tax and are not eligible for government subsidies. Inevitably, many of them will resort to theft, looting, rioting, robberies and the like, creating social unrest and disturbances, making it less safe for people to walk in the streets.

Dr Yeah Kim Leng, economics professor at Sunway University Business School, believes that the foreign worker situation has not turned into a crisis but there will likely be one if the Movement Control Order (MCO) is extended further.

What can the government do given its limited resources? More immediately, it might want to consider coming up with a humanitarian package, suggests Yeah, which can be channelled through some of the non-governmental organisations that are involved in helping these people.

Over the longer term, when the dust settles on the Covid-19 pandemic and the damage left behind, there is a need to really focus on reducing the country’s dependence on cheap foreign labour. Perhaps, a silver lining from the ongoing crisis is that it is exposing the magnitude of the problem. With Malaysia facing a severe downturn, it has created an opportunity for a reformulation of government policies.

For sure, there have been efforts in the past to curb the inflow of migrant workers but these have obviously not worked. This is mostly because the migrant worker business has become very lucrative for those involved. Some of the agencies are connected to powerful politicians, and corruption is rampant.

It requires political will to wean Malaysia away from this dependence. It should be a multi-pronged approach, including tightening rules on new admissions and legalising workers who truly contribute to the economy. At the same time, these efforts must be combined with incentives for employers and industries to move up the value chain — automate, embrace technology, provide upskill training and so on to improve productivity with less manpower.

It is a wake-up call to employers as well. Relying on cheap foreign labour is no longer tenable in the current global environment and with the advent of Industry 4.0, they have to embrace technology or they will be unable to compete in the world markets.

There is no doubt that the world will change after Covid-19. Wong Chen opines that a likely trend is a drop in the diversified global supply chain, and more focus will be given to the completion of goods and services at local levels. “So, we have to move up the economic ladder and not be a cheap producer of goods dependent on a cheap foreign workforce.”

There will be transition pain but companies, especially in the small and medium-sized sector, may no longer have a choice in a global economy that is increasingly being driven by technology. The likes of robotics, Internet of Things and artificial intelligence will feature more and more in work processes. Additionally, new industries will spring up (such as e-hailing services, e-commerce and so on), providing jobs that do not need foreign labour input.

Malaysia cannot remain competitive in world markets so long as we do not move away from our reliance on the cheap cost of foreign labour. All over the world, new technology is making it possible to raise productivity with less manpower. To reduce dependence on foreign labour, both the private sector and the government must work together.

Anna Taing is managing editor at The Edge

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