Effective immigration policy as a new paradigm to mitigate the dependency of foreign labour in the Malaysia palm oil sector.
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Grant Category, Year: Small Research Grant, 2021
Abstract
Emerging economies are hosting more than one-third of migrant workers, where a significant portion of them is low-skilled. Many emerging economies have adopted various measure to reduce the dependency on low-skilled foreign workers. Malaysia hosts more than 2.2 million foreign workers, where 45% is unskilled. On average, 47% of low-skilled foreign labours are found in the palm oil plantation, which host largest population of foreign labour in a single sector. Notably, Malaysia has set a goal to maintain up to 15% of low-skilled foreign workers into the total labour force to reduce its dependency. Although the country officially achieved the goal by implementing several policies, including quota, levy, and minimum wage systems, a significant number of undocumented workers casts doubt regarding the actual achievement of the goal. Due to cheaper wage rates, many Malaysian firms or industry prefer foreign labours over local supply, which eventually creates a dependency on it. Therefore, the Malaysian government undertook several policies, including quota, levy, and minimum wage systems, to limit the low-skilled foreign workers into the total labour force. Apparently, the country achieved limiting 15% of low-skilled foreign workers concerning documented foreign labours. Nevertheless, estimated that Malaysia hosts around 1.46 million undocumented migrant workers.
It is evident that the Malaysian government has practised diverse policy instruments in the past 38 years (1982–2020) when it comes to managing the admission and employment of foreign labour. Moreover, the hurdle in assessing foreign workers policy has begun since Peninsular Malaysia, and East Malaysia (Sabah and Sarawak) adopted an independent migration policy. Despite the momentous approaches and strategies, including amnesty and regularisation programmes for irregularities, this study will mainly scrutinise three mechanisms: the quota, levy, and minimum wage.
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