De-commercialization of the Labor Migration Industry in Malaysia

Abstract

This paper focuses on irregularities as a result of the privatization of migrant worker recruitment and the unregulated activities of outsourcing companies, created by the institutionalization of the outsourcing system. Using Malaysia as its case study, this paper examines the strategies utilized by the government to de-commercialize the migration industry by phasing out intermediaries and turning to a government-to-government (G2G) approach. Eliminating the business aspect of the industry signifies a fundamental change in the government’s conceptualization, that is, labor migration should be framed as a long-term economic development issue rather than a national security threat. Enforced since 1995 and updated in 2010, the official policy to phase out agents has not eliminated employers’ and workers’ dependence on intermediaries, a historically rooted practice. The findings show that attempts to de-commercialize recruitment in Malaysia have led to monopolization of the industry and an increase in employers’ hiring costs and migrant workers’ application processing fees.