The blocking of the flow from Indonesia due to a dispute over procurement threatens to bring Malaysian palm oil producers to their knees. But even in Bangkok the Chamber of Commerce estimates a shortage of at least 500,000 foreign workers in the post-Covid phase.
Bangkok () – The economic recovery of the countries of Southeast Asia, with a strong manufacturing and agricultural orientation, could be compromised or slowed down by the shortage of labor due to the difficulty in obtaining the necessary number of immigrant workers. The restrictions on cross-border movements due to the pandemic, the new situations that it has created for various productive sectors, and inadequate or outdated laws are some of the causes. The problem mainly affects two countries, Thailand and Malaysia, the second and sixth largest economies in the region, traditionally dependent on immigration.
The July 13 notification that Indonesia temporarily halted the flow of its migrant workers to Malaysia is reportedly due to non-compliance with recruitment agreements between the two countries. It is a dispute that is repeated periodically, along with the problem of many immigrants who arrive in Malaysia from the archipelago without the corresponding documentation. The measure now threatens to bring palm oil production to its knees, of which Malaysia is the world’s second largest producer (after Indonesia), and the labor shortage in that country is estimated at 1.2 million people. Some 20,000 Malaysian companies, half of the agricultural sector, have applied for foreign staff, mostly from traditional labor providers: Indonesia, Bangladesh and Nepal.
They point out that the main culprit would be the Internet contracting system for domestic workers, which in the past would have been used by gangsters for exploitation and illegal recruitment. Above all, the Indonesian authorities claim that the form that is still used does not take into account an agreement in April to better protect this particularly vulnerable category.
Thailand -which imports labor to supply the construction, agriculture, fishing and tourism sectors, but also exports it for various items- must face a new situation. The National Chamber of Commerce has indicated that more than 500 thousand immigrants are missing, which is equivalent to a quarter of its foreign labor force, the majority coming from Myanmar, Cambodia and Laos. The same agency found that between 3 and 4 million workers would be needed for the economy to recover, but for the moment, confirms the Employment Department of the Ministry of Labor, there are only 2.5 million registered in the country.
The number is expected to increase to at least three million by the end of the year and there will be greater facilities for the regularization of all foreigners who are in the country illegally, including many from Vietnam, which would allow them to reside and work. in Thailand until February 2025.
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