By Arno Maierbrugger/Gulf Times Correspondent/Bangkok
Indonesia’s ban to send any more unskilled domestic workers to various Middle Eastern countries — to come into force in three months’ time — not just illustrates once again the various problems connected to migrant labour, but also the changing character of this industry.
Labour migration between developing economies in Asia and richer countries in Asia-Pacific, Europe and the Middle East since the 1980 has mainly been a supply of unskilled or semi-skilled workers to wealthier nations that were not able to find people able or willing to do low-skilled and low-paid work, but this system is now in transition. Transforming demographics in Asian source countries and the fact that a number of these economies have been climbing up the income ladder in the past decades towards becoming middle-income nations means that such countries move from supplying low-skilled labour to receiving it. A good example for that process is Malaysia which underwent this transformation in the 1990s, Thailand is half-way through this process and Indonesia is obviously starting it now.
Furthermore, with the exception of India and the Philippines, most Asian countries are seeing their domestic workforce declining while their economies grow, which results in fewer people coming for more jobs. With rising income levels, better education and more entrepreneurial opportunities, fewer workers are willing to take on low-level jobs regardless whether they are being offered at home or abroad.
On the other hand, countries that are employing most of these low- to medium-skilled migrant workers are also in need of a re-orientation. Saudi Arabia, for example, the country with the Middle East’s largest number of migrant labourers on its soil, is itself facing a huge youth unemployment rate of close to 30% which is seen as its biggest social challenge over the next decade amid sinking oil prices and the entry of millions of young people into its limited economy.
In the Saudi case, migrant workers are definitely taking away local jobs and even more if they are on a higher skills level for which most young Saudis are insufficiently prepared due to an inept education system. Around 1.9mn Saudis will enter the country’s job market over the next decade, where they are confronted with around 7.2mn migrant workers.
Saudi Arabia is just one example. Europe, with its weakened economy and its current average jobless rate of 11.2%, is also struggling to revive its own labour market, with low-skilled people who are currently migrating to the European Union in great numbers facing a near-zero chance of landing a halfway decent job.
The countries that are still benefiting from low- and semi-skilled labour migration are those with small population numbers and partly declining youth population such as Hong Kong, Singapore and Brunei, as well as Japan and South Korea and — in the Middle East — the UAE, Qatar, Oman, Bahrain and Kuwait. But there also, salaries are expected to go up as more skilled jobs have to be filled and low-skilled jobs tend to become more and more automated.
In this context, Vietnam, a 90mn-people country that sends out just around 100,000 workers a year — as opposed to the Philippines with approximately the same population where five times more people leave every year for an overseas job — has set a good example how to transform labour export into an added-value industry.
Domestic agencies are training the workers in a variety of specialised jobs before they leave Vietnam on a foreign assignment, with the result that they can command higher wages for their skills. That way, Vietnam has earned a reputation of supplying the world with skilled welders and mechanical engineers.
One of the most satisfying results of that strategy was that Germany in 2013 launched a project to recruit such engineers from Vietnam for monthly salaries of no less than $2,000 — around 15 times the minimum wage at home.
