Migrant workers: Last ones in, first ones out

By Manolo Abella And Geoffrey Ducanes Ilo


THE rapid growth of migration and remittances is ending.

Some of the countries that absorbed many Asian migrant workers, particularly the United States and Europe, have reported the sharpest economic downturns in the current global financial meltdown.

More than 4 million South and Southeast Asian workers in seven countries of the Organization for Economic Cooperation and Development (OECD) are expected to significantly decrease in 2009.

Substantial numbers come from the Philippines (1.2 million, mainly in the US and Canada) and India (1.1 million mainly in the US, the United Kingdom and Canada).

When the dust has settled, many Asian workers are expected to be laid off in these countries.

Much lower demand for migrant workers is expected in Asian destination countries like Singapore, Malaysia and Thailand. The jobs most likely to be affected are those in construction, finance, trade-related industries (such as export manufacturing and shipping), travel and tourism.

Contracts are unlikely to be renewed or even prematurely terminated. Migrant workers who have just recently arrived in countries of employment are going to be particularly affected since the last ones in are likely to be the first ones laid off.

Malaysia has more than 2.1 million registered foreign workers. Most of those retrenched are from manufacturing, which together with the services sector, is expected to be the hardest hit by the crisis.

About 30 percent (900,000) of Singapores workforce are foreigners, including 143,000 professionals from all over the world. The rest are low-skilled workers, mainly from Southeast Asia, China, India and Sri Lanka.

Thailand has some 1.8 million foreign workers mostly coming from neighboring Myanmar, Laos and Cambodia.

South Korea has more than 400,000 foreign workers. In December it suffered a decline in total employment for the first time in more than five years while small and medium-sized companies have gone bankrupt or shut down.

Upside

The situation is not as dire for all workers or in all destinations. The demand for health sector jobs, for instance, will likely remain strong. Foreign engineers are still very much in demand in some countries like Saudi Arabia.

Public investments in the Gulf States are foreseen to remain strong in spite of the severe drop in oil prices.

The economies of major labor-importing countriesSaudi Arabia and Kuwait along with Qatarare expected to have stable growth, although that of the United Arab Emirates (UAE), which had earlier experienced rapid growth is now expected to decline.

The Philippines has large numbers of workers in the Gulf Statessome 2.18 million workersrepresenting 43 percent of the 5.1 million Filipinos working on temporary contracts abroad. The Philippines also has substantial number of workers in North America (700,000), Europe (668,000) and East and Southeast Asia (one million).

The number of Filipino contract workers abroad continued to increase reaching a total of 1.377 million in 2008, an increase of some 28-percent over the previous year.

This means a daily deployment of some 3,772 documented migrant workers.

In recent years Asia experienced unprecedented rates of growth of recorded migrants remittances. Double-digit rates of growth were recorded for Asian countries, notably Nepal, Indonesia, Bangladesh, Pakistan and the Philippines.

In the Philippines, the annual growth of migrants remittances averaged almost 16-percent over the previous six years. For 2009, the central bank predicts that remittances are still likely to grow but at a slower rate of from 3 percent to 6 percent.

Although remittances slowed down in the latter half of 2008, overall growth for the first 11 months was 15 percent, reaching $15 billion.

According to the Department of Labor and Employment (DOLE), reported displacements up to January 20 affected 4,000 Filipino workers mainly in Taiwan (3,494), UAE (297), Brunei (69) and Macau (45).

The most common reasons cited for the displacement were bankruptcy of companies and a slowdown in operations.

Downside

There are concerns that the brunt of adjustment to the economic crisis will fall hardest on migrant workers.

Layoffs have already been reported for industries most directly affected by the crisis. But other forms of adjustments such as work-sharing and reductions in wages and benefits are not yet reflected in any formal statistics.

More foreign workers in Singapore complain about pay cuts, not being paid on time, having their working days reduced, and not being provided food, shelter and healthcare, which employers are legally obliged to provide.

Many Malaysian firms adjust to the crisis by reducing the number of working days, hours of overtime work and in some instances forcing workers to use their annual leave.

Many countries have stopped issuing new work permits to or renewing work permits of foreign workers. Some are even providing companies incentives to replace foreign with native workers.

Singapore is urging companies to avoid lay-offs by finding means to cut costs. In case of unavoidable retrenchment, foreigners will be laid off first.

Malaysia has issued a freeze on the issuance of work permits for foreign workers and has instituted a policy to terminate foreign workers first.

South Korea has stopped issuing new visas and it is unlikely that the quota for foreign workers will be increased. It is encouraging small and medium-sized companies, the primary employers of foreign workers, to hire more locals.

Thailand has announced that no new work permits will be issued and that the planned registration of undocumented foreign workers will now be put off till after 2009.The work permits of about 500,000 foreign workers will not be renewed for 2010 and authorities have threatened to deport undocumented migrant workers.

Countries have responded by close monitoring, providing immediate assistance and looking for alternative employment for those who have been displaced.

The Philippine Overseas Employment Administration (POEA) has established help desks in provinces to help match the skills of retrenched (or aspiring) migrant workers with available jobs within the country and abroad, as well as to advise them on self-employment.

President Gloria Arroyo has ordered the Overseas Workers Welfare Fund to set aside P250 million for livelihood support to displaced migrant workers. DOLE has already sent special missions to Taiwan and Dubai to assist Filipinos who have lost their jobs or are expected to lose their jobs in reintegration.

The POEA is also providing legal assistance to displaced workers seeking refund of plane ticket expenses, placement fees, etc. from recruiting agents or their employers.