By DASHVEENJIT KAUR / Pic By BLOOMBERG
MALAYSIA, Thailand and Singapore are the top choices of country for the migrants from the Asean region, says the World Bank.
In its new report titled “Migrating to Opportunity: Overcoming Barriers to Labour Mobility in South East Asia”, the Washington-based lender said Malaysia, Singapore and Thailand are the top three leaders in becoming a regional migration hub.
“These countries combined are home to 6.5 million Asean migrants alone. Malaysia and Thailand are among the few developing countries that have already become the two major destinations for migrants,” it said.
“Thailand has the largest number of total migrants, with more than 3.9 million in 2015, about 50% more than Malaysia and Singapore’s 2.5 million.
“In Malaysia, 70% of the migrant stock originates from Indonesia and 16% from Myanmar. The story is different for Singapore, where 85% of Asean migrants are from neighbouring Malaysia.”
The report also stated that Malaysia and Singapore have the lowest international labour mobility costs in Asean while emphasising that barriers to labour mobility, measured by labour mobility costs, are preventing Asean countries from reaping the full benefits of international migration.
“Improvements in the migration process can ease these costs on prospective migrants, and help countries respond better to their labour market needs,” World Bank economist for the social protection and jobs global practice Mauro Testaverde said in a statement.
“The lower costs of international mobility in Malaysia reflect its openness to globalisation. Their effort is to develop migration systems that meet labour market needs based on their geographic centrality in the region,” he said.
World Bank suggested that Malaysia could adjust its migration policies to the country’s economic needs, including by revising its current levy system and deepening coordination with sending countries.
“Overall, migration procedures across Asean remain restrictive. Barriers such as costly and lengthy recruitment processes, restrictive quotas on the number of foreign workers allowed in a country, and rigid employment policies constrain workers’ employment options and impact their welfare,” it added.
The report estimated that reducing barriers to mobility would improve workers’ welfare by 14% if only targeting high-skilled workers, and by 29% if including all workers.
Malaysia’s relatively open immigration policy has allowed investors to benefit from Malaysia’s advanced infrastructure and reliable business environment, while also having access to low-cost labour.
Additionally, the report noted that such restrictive policies are partly influenced by the perception that an influx of migrants would have negative impacts on receiving economies.
The World Bank also said migration can have positive impacts on the employment and wages of workers in destination countries, although these effects are generally small.
In terms of wages, the World Bank highlighted that there is a huge gap in wages in the region.
“Average wages in high-income Singapore are at least five times those of other Asean countries, while a Cambodian migrant can earn three times more by moving for work to Thailand,” it said.
On the other hand, Malaysia’s average monthly wage is triple that of Indonesia, the Philippines and Vietnam.
“Migrants earn 50% of their local counterparts in Brunei and 65% of their local counterparts in Malaysia,” it added.