Impact of the Global Economic Crisis on Asian Migrants

Impact of the Global Economic Crisis on Asian Migrants

Manolo Abella

Too early to say magnitude of the impact on international labor migration

Too early to say magnitude of the impact on international labor

migration

Too early to say magnitude of the impact on international labor

migration

• Decline in global demand for labour• Stock of migrants declining ?• What adjustments are taking place in labour markets of destination states?

Determinants of impact on migrationDeterminants of impact on migration• Industries where migrants are employed• Skill/Occupations of migrants• Immigration status – regular vs irregular• Employment - project-tied vs continuous • Labour market institutions•Quality of governance

In Asia, available data to date suggest • Crisis hitting native workers in export manufactures

•Slowdown of new migration admissions

•Insignificant returns

6

Malaysia - Basic InformationMalaysia Malaysia -- Basic InformationBasic Information

Population•27.73 million

Area •330,252 square metres

Per Capita Income•RM25,796 [USD7,738]

GDP•2008: 4.6%•2009: –1% to 1%

7

GDP growth…decliningGDP growth…declining

5.5 5.7

6.77.3 7.4

6.7

4.7

0.1

5.3

0

1

2

3

4

5

6

7

8

Q4 2006 Q1 2007 Q2 Q3 Q4 Q1 2008 Q2 Q3 Q4

Growth Rates (%)

8

External Trade … decliningExternal Trade … declining

100,11577,856

663,494

605,153588,965

57,77881,289

521,611480,772

504,813

20,07818,826

141,883100,339108,193

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2006 2007 2008 Jan - Feb 2008 Jan - Feb 2009

RM million

Total Exports

Total Imports

Balance of Trade

9

Employment Trend

11,159

11,39811,525 11,500

377.1

442.8 544.5

385.5

10,600

10,800

11,000

11,200

11,400

11,600

11,800

12,000

12,200

2006 2007 2008 2009fYear

Labour Force ('000 persons)

UnemploymentEmploymentLabour force grew by

4.1% in 2004- 2005, but slowed down to 2.2% in 2006, 2% in 2007 and 1.6% in 2008.

Employment showed similar trend i.e. grew by 4.1% in 2004 – 2005, but slowed down to 2.4% in 2006, 2.1% in 2007 and 1.1% in 2008.

Unemployment from 2006 – 2007 was low at 3.2% of labour force; but the rate increased to 3.7% in 2008 and is expected to rise to 4.5% in 2009.Women participation in labour force - 46%

10

Employment of Foreign Workers by SectorEmployment of Foreign Workers by Sector

SectorSectorNo. of Foreign WorkersNo. of Foreign Workers %%11 Total Total

EmploymentEmployment

20032003 July 31, July 31, 20082008 20032003 July 31, July 31,

20082008 20082008ee

ManufacturingManufacturing 355,400355,400 751,500751,500 32.532.5 35.635.6 3,337,0003,337,000

Service Service (excluding (excluding domestic maid)domestic maid)

81,90081,900 211,900211,900 7.57.5 10.010.05,911,4005,911,400

Domestic maidDomestic maid 237,700237,700 300,800300,800 21.821.8 14.314.3ConstructionConstruction 269,900269,900 312,600312,600 24.724.7 14.814.8 757,000757,000Plantation*Plantation* -- 349,300349,300 -- 16.616.6

1,389,0001,389,000AgricultureAgriculture 147,500147,500 183,900 183,900 13.513.5 8.78.7TOTALTOTAL 1,092,4001,092,400 2,110,0002,110,000 100.0100.0 100.0100.0 11,398,00011,398,0001 as percentage of total foreign workers * Not segregated in 2003 e Estimates

The Government intends to reduce the number of foreign workers to 1.95 million in 2010 and 1.61 million in 2015.

MALAYSIA Policy Responses Affecting Migrants- Policy to terminate foreign workers

first- Freeze on Intake of Foreign Workers- Fast-track deportation of

undocumented migrants- Regularizing undocumented workers- Longer-term Plan to Cutback on

foreign labour dependence

12

Majority of those retrenched were in manufacturing.

Statistics do not support that women were the first to be retrenched.

Employees were more likely to be laid-off or have their pay cut.

1 1.1.2009 to 2.4.2009

Retrenchment by Gender

Retrenchment 2006 - 2009Retrenchment 2006 - 2009

Year Male Female2006 9,085 6,2752007 6,541 7,4942008 15,002 9,02720091 9,207 8,454

13

Findings of FMM Survey – 1Q09Findings of FMM Survey – 1Q09Business Response to Manage Economic CrisisBusiness Response to Manage Economic Crisis % Respondents% Respondents

Reduce operation costReduce operation cost 86.086.0

Increase productivityIncrease productivity 61.661.6

Reduce capital investmentReduce capital investment 54.754.7

Lower productionLower production 48.848.8

Enter new marketsEnter new markets 47.747.7

Introduce new productsIntroduce new products 45.345.3

Renegotiate supply contractRenegotiate supply contract 44.244.2

Reduce employmentReduce employment 33.633.6

Renegotiate sales contractRenegotiate sales contract 26.726.7

RestructureRestructure 24.424.4

Lowered/cut R&D budgetLowered/cut R&D budget 16.316.3

Hire new talents/skillsHire new talents/skills 15.115.1

Diversified into other sectorsDiversified into other sectors 12.812.8

Left certain marketsLeft certain markets 9.39.3

Seek merger/acquisitionSeek merger/acquisition 5.85.8

14

Findings of FMM Survey – 1Q09Findings of FMM Survey – 1Q09Types of Employment Initiatives Types of Employment Initiatives % Respondents% Respondents

Cut overtimeCut overtime 66.366.3

Freeze recruitmentFreeze recruitment 55.855.8

Freeze replacementFreeze replacement 39.539.5

Extend shutdown especially during festivitiesExtend shutdown especially during festivities 36.036.0

Cut contract workersCut contract workers 31.431.4

Workers take unpaid/annual leaveWorkers take unpaid/annual leave 27.927.9

Cut shift workCut shift work 25.625.6

Cut work weekCut work week 22.122.1

Repatriate foreign workersRepatriate foreign workers 11.611.6

Retrench workersRetrench workers 10.510.5

Separation schemesSeparation schemes 9.39.3

Temporary layTemporary lay--off at half payoff at half pay 7.07.0

Impact of the Crisis on Foreign Labour in MALAYSIA

Number of Migrant Workers2.2 million with work permits1 million undocumented

- Three-fold increase in migrant worker population from 799 thousand in 2000 to 2 million in 2007

16

Retrenchment [in the period 1.1.09 to 2.4.09]Retrenchment [in the period 1.1.09 to 2.4.09]

TypeLocal Foreign

Total Male Female Male FemaleRetrenched 3,659 4,035 2,798 2,360 12,852VSS 2,192 1,939 558 120 4,809Total 5,851 5,974 3,356 2,480 17,661Lay off 7,478 13,752 1,315 3,536 26,081Pay cut 6,658 7,291 3,175 2,027 19,151Total 14,136 21,043 4,490 5,563 45,232Check Out Memo1 95,542

Source: Labour Department1 Immigration Department from 1.10.2008 to 11.1.2009.

Impact of Global Economic Crisis on Taiwan’s Economy

Impact of Global Economic Crisis on Taiwan’s Economy

Small economy of 23 million people highly dependent on exports to drive the economy– Exports account for 65 per cent of GDP

Exports plunged by 41.67 % in January and 22,27 % year on year in FebruaryUnemployment (624,000) nears 6% the highest ever recorded

GDP forecast to contract from 3% to 6% in 2009

Response of Taiwan ICT Industries to Global Economic Crisis

Response of Taiwan ICT Industries to Global Economic Crisis

• Cut-down production– Flextime– Forced leaves– No work, no pay*– No overtime– Lay-off

* Migrant workers are entitled to minimum wage of NT$17,280 regardless of hours worked

Filipino Workers in TaiwanFilipino Workers in Taiwan

As of Feb 09 MALE FEMALE Subtotal % of

No. % No. % No. %Manufacturing 23,543 23,760 47,303 66.47

Food 1,251 1.76 359 0.50 1,610 2.26Textile/Garments 2,579 3.63 1,311 1.84 3,890 5.47Fabricated Metal 3,037 4.27 348 0.49 3,385 4.76

Electronics 7,315 10.51 20,230 28.42 27,545 38.93Other

Manufacturing 9,199 36.71 1,860 4.03 11,059

Caretaker 436 0.61 21,307 29.84 21,743 30.55Domestic Helper 11 0.02 1,053 1.48 1,064 1.50All Others 1,054 1.49 0 0 1,054 1.49

Source: CLA

Filipino Women Workers in TaiwanFilipino Women Workers in Taiwan• PROFILE OF THOSE EMPLOYED IN

ELECTRONICS– Age Range: 23-35– Median Age: 26– At least Tertiary Education– Not head of family– Usually employed in “backend” of chip making (test,

assembly and packaging), motherboard and PCB assembly and LCD panel assembly

– Hiring of Filipino women migrant workers specified by employer to broker

Lay-offs of Filipino workers in Taiwan since October 2008

Lay-offs of Filipino workers in Taiwan since October 2008

CATEGORY MALE FEMALE TOTALFactory 1797 3060 4857Caretaker 0 0 0Nursing Aide 0 0 0Household Worker

0 0 0

Fisherman 0 0 0Construction Worker

0 0 0

TOTAL 1797 3060 4857Source: DOLE

Deployments of Filipino workers to Taiwan since October 2008

Deployments of Filipino workers to Taiwan since October 2008

CATEGORY MALE FEMALE TOTALFactory 1301 1585 2886Caretaker 0 1638 1638Nursing Aide 22 226 248Household Worker

0 215 215

Fisherman 604 0 604Construction Worker

6 0 6

TOTAL 1933 3664 5597Source: DOLE

SRI LANKA 2008 OUTFLOWS BY MONTH

SRI LANKA 2008 OUTFLOWS BY MONTH

January 20518February 20793March 20947April 19632May 23151June 22632July 22388August 20314September 24970October 20225November 19239December 16811Total 251620

Origin country response : Philippines Origin country response : Philippines

1. Seek new markets 2. Livelihood Support Fund: P250 million of

OWWA funds for livehood support; 3. POEA/OWWA provincial help desks to match the

skills of retrenched or aspiring OFWs with available jobs in the country and abroad.

Government Response Government Response

4. Reintegration Services for OFWs through the National Reintegration Center for OFWs:Provides business & investment counseling, referral to banks & microfinance credit facilities, financial management & investment opportunities & livelihood support.

• Inter-agency OFW Assistance Center at the Airport• Missions abroad to assist those disocated

Government Response Government Response

5. Legal Assistance and Referral to Agencies through POEAAs of January 20, 2009 POEA provided:

• Legal assistance to displaced OFWs for refund of plane tickets, placement fees,

• Referrals to agencies for redeployment6. Livelihood projects and interest free loans to

OFWs and their families through OWWA• Groceria Project