Malaysia's export development paradigm is threatened by allegations of labour mistreatment

[ASEAN NOW Content Team]

 

Experts warn that unless Malaysia's government and businesses handle rising charges of workplace exploitation of migrant workers who fuel the country's economy, the country's export-reliant economic model would be jeopardised.

Malaysia has relied on migrant workers to power its staple manufacturing and agriculture for decades, becoming an important element of the global supply chain for semiconductors, iPhone components, medical gloves, and palm oil.

However, as the reliance on foreign labour has grown, so has the number of complaints about harsh working and living circumstances for employees, most of whom are from Indonesia, Bangladesh, and Nepal.

 

Inquiries regarding modifying Malaysia's labour rules were not answered by the labour department, and questions about prospective investment losses were not answered by the commerce ministry.

M. Saravanan, Malaysia's Human Resources Minister, admitted earlier this month that "forced labour concerns" have "damaged foreign investors' confidence in Malaysia's product supply."
He asked businesses to safeguard workers' rights and well-being.

According to Rosey Hurst of London-based ethical trade consultancy Impactt, "Malaysia has become the poster child" for forced labour issues.
"And this has a negative impact on the economy.
Real change is required."

 

Global investors, particularly asset managers and private equity firms, have been inquiring about Malaysia's labour practises, according to Hurst.

Other Asian manufacturing hubs, such as China and Thailand, have been accused of similar labour violations.
However, analysts warn that recent scrutiny of Malaysia has piqued investors' curiosity, which could effect future foreign direct investment and supply contracts.