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Asia’s Captive Market for Migrant Labor

As the experience of Malaysia and Bangladesh shows, the main beneficiaries of the region’s manpower-recruitment syndicates appear to be a handful of politicians, public officials, and business elites. Ensuring a competitive manpower industry is the best way to minimize migration costs and protect workers’ rights.

KUALA LUMPUR – COVID-19 has disrupted labor markets virtually everywhere, pushing millions of migrant workers into poverty. In high-income Asian countries, the pandemic has highlighted these workers’ vulnerability to redundancy, pay cuts, and exclusion from vital social safety nets. The authorities in Singapore and Malaysia have deported some of those who spoke out against inadequate provisions or mistreatment in the workplace.

But, as global supply chains are restored and economies reopen, employers are facing an acute labor shortage. In the Global South, many countries have again turned to foreign migrant workers to fill the void, even removing earlier immigration restrictions.

Unfortunately, the reopening of labor markets increases the risk of human trafficking – and potentially death – and the exploitation of illiterate job seekers by unscrupulous intermediaries. Many aspiring workers from low-income economies must make large unofficial payments, turning migration to richer Asian countries into an expensive undertaking, with intermediary fees often accounting for more than 75% of the overall migration costs.