Wage competition among SAARC nations harming migrant workers

In early June, Nepali authorities announced that they would not issue work permits to outbound workers if employers did not bear the cost for visa and air ticket. The Ministry of Labor and Employment (MoLE) maintained that the provision was meant to prevent economic exploitation of workers in the name of recruitment fee and eventually ensure cost-free outbound migration.

Shortly after the Nepali authorities made this announcement, Malaysian Home Minister Datuk Seri Ahmad Zahid Hamidi announced to bring 1.5 million workers in Malaysia from Bangladesh in next three years to meet the demands of employers from various sectors.

This could not have been a mere coincidence. Bangladeshi workers, who are considered cheapest laborers, remain banned in Malaysia except for the plantation sector since 2007 despite continued diplomatic efforts by Bangladesh to lift the ban.

The case in point demonstrates how South Asian countries, which remain major sources of foreign workers in the Gulf countries and Malaysia, compete among each other to send their workers there, but also employers are making a choice among the workers of these nations.

“Although the 18th SAARC Summit in Kathmandu agreed to collaborate and cooperate for the well being of their migrant workers outside the region, it is difficult to bring the agreement into implementation as long as there exists a situation of one country’s loss as another country’s gain in the same region,” observed former Nepali ambassador to Kuwait Madhuban Paudel, who also served as Nepali diplomat in the UAE.

Taking up the issue of migration for the first time in the SAARC forum, the South Asian nations in Kathmandu Declaration agreed to work together for the benefit of their migrant workers outside the region. “They [SAARC countries] also agreed to collaborate and cooperate on safe, orderly and responsible management of labor migration from South Asia to ensure safety, security and wellbeing of their migrant workers in the destination countries outside the region,” states the Article 21 of the Kathmandu Declaration.

SAARC Secretary General Arjun Bahadur Thapa said SAARC Secretariat is coordinating with Nepal to bring the agreement into implementation. “Nepal is currently preparing a concept note to expedite the process,” Secretary General Thapa told Republica. Sources said the concept note, among other things, proposes holding SAARC labor ministerial meeting on a regular basis and discussing ways to work together for the well-being of the workers from the region working mainly in Gulf and Malaysia.

But many challenges lie ahead.

There is often competition, for instance, between Nepal and Bangladesh to send unskilled workers to various labor destinations while Indian and Pakistani workers are in senior positions where unskilled workers from other SAARC countries go to work in Gulf countries and Malaysia. At times, Indian and Pakistan nationals themselves are found operating recruitment agencies.

Also, some countries within the SAARC region including Bangladesh are ready to send workers in the Gulf and Malaysia even for minimum wages unlike other SAARC countries.

Although the idea of collective bargaining is good, the big question, according to experts, is whether prospective employers in the labor destination countries entertain such bargaining. Many labor destination countries prefer to have bilateral government-to-government agreement to import workers in these labor destinations.

Seven SAARC countries except for Bhutan and Maldives send their workers in various Gulf countries and Malaysia for work.

Labor migration expert Dr Ganesh Gurung believes that the historic agreement in the SAARC Declaration offers a great opportunity for the SAARC nations to engage in collective bargaining for better pay and better perks and facilities for the migrant workers in the labor destination countries. “All that requires is political will of the SAARC leaders. Although this may not yield 100 percent result, this is going to help raise salary and other perks and facilities of the migrant workers from the SAARC region,” said Dr Gurung.

Experts believe that labor destination countries will be pressed to review their salary and other perks and facilities once SAARC countries make a collective voice given the fact that ASEAN nations like Laos, Cambodia, Philippines and Indonesia have already raised the pay ceiling of their workers substantially. “Gulf countries and Malaysia will have to depend either on workers from SAARC or ASEAN countries. We will benefit if the SAARC countries are able to set common minimum wage for workers from the region,” Dr Gurung further said.

(Originally published in the Republica, Nepal.)