Earlier this year, the Ministry of Economic Development got the mandate to administer expatriate employment amid allegations of corruption and with the assurance of reform. Predictably, there are no changes forthcoming to legislation or regulation which is needed to resolve the underlying issues in expatriate employment. This blog critically evaluates the existing policy of quota-based expatriate employment and considers an alternative which could be implemented instead.
Several issues can be directly linked to the existing system of quota-based expatriate employment. Basic economics of this system leads to sub-human treatment of expatriate workers. For example, businesses are required to provide housing for the expatriates in their employment which is usually taking form as space in an ill-ventilated, unhygienic and unsanitary room. This is an understandable outcome as every business will opt for cost-effectiveness to remain competitive in the market and to make a profit.
Secondly, the rapid changes in government policy and criteria for issuing quota create an unfair advantage for some businesses and interfere with market competitiveness. A few years back a construction business could get a general quota but now quota is issued only to construction projects with one or more years of duration. Those businesses with general quota have the unfair advantage of having labour at their disposal, cheap or otherwise.
Evidently there is a severe shortage of manpower creating economic opportunity for migrant workers. The number of illegal expatriates in the country is a strong indicator that this is the case. Since this is an economic issue, current legislation and policy on employment should be reformulated with economics in the mix. Any new policy should be drawn up to include the following:
1. Establish a process to identify the manpower and skills needed for the economy at regular intervals (i.e. annual).
2. Create and maintain a manpower pool by issuing work visas to migrant workers and creating adequate and affordable housing facilities. Restrictions and conditions (such as sufficient deposit and time limit) on the incoming migrant workers.
3. Enforce terms of employment (including pay and allowances) equally on local and migrant employees.
A key change in new legislation should be the elimination of the existing quota-based system and establishment of a competitive labour market. A competitive labour market will ensure equal opportunity for all businesses and remove any unfair advantages. It will encourage new ideas and innovation while discouraging the exploitation of employees (delaying salary payment and forced overtime). A competitive labour market will also discourage spontaneous and impulsive business startups which will avoid waste of economic resources and unwanted market saturation.
An important social benefit of a competitive labour market will be that the local workforce will not have to compete with expatriates on wages. Market forces will ensure that wages remain competitive at par with local standards.
The socio-economic issues arising from the current system of expatriate employment have existed for at least two decades, sustained by corruption and self-greed of a few. Hopefully, the change will be sooner rather than later.
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Source URL: Medium