Bangladeshis feel the pinch
As Malaysia's economy starts to slow down in the face of falling oil prices and political uncertainty, Bangladeshi workers in the Southeast Asian nation are starting to feel the crunch.
The value of the ringgit has gone down to a 17-year low against the US dollar amid political uncertainty. This has started to eat away the Bangladeshi migrants' savings and the amount they can send home every month.
Now it takes more than 4.2 ringgits to buy one dollar. It was a little over 3 ringgits six months ago.
Migrants say their living cost is higher now and their savings are dwindling. Now, a ringgit is worth just above Tk 18. It was Tk 24-25 just a few months ago.
“I usually send 1,000 ringgits a month to my family back home. Now it is worth less than Tk 20,000. It used to be around Tk 25,000 before,” said Mohammad Ilias, 30, who works as a salesman at a furniture factory in Kuala Lumpur's Ampang area.
The ringgit has fallen further since he spoke to The Daily Star on August 13.
A six percent goods and services tax (GST) from April this year has pushed up commodity and service prices as well, he said.
Ilias said his salary, including overtime, was around 1,500 ringgits only six months ago but it slowly came down to 1,200 ringgits and overtime work is few and far between.
He said he would not be able to send even 1,000 ringgits this month to his family in Haluaghat of Mymensingh.
A strong Malaysian economy is rather important for Bangladesh. About six lakh Bangladeshis work there and send money home.
In 2014-15, they sent almost $1.4 billion, which is over nine percent of the remittance Bangladesh received in the entire fiscal year.
Malaysia is Bangladesh's third largest labour destination after Saudi Arabia and the UAE.
Malaysia's economy has been dogged by concerns that slumping oil prices will harm growth in the oil-exporting country, says an August-11 AFP report.
Prime Minister Najib Razak also is struggling to fend off corruption allegations related to his links with the debt-ridden state investment firm 1Malaysia Development Berhad (1MDB).
Chua Hak Bin, an economist with Bank of America Merrill Lynch, said, "Political uncertainty and 1MDB are also hurting consumer and business confidence."
There has been about 10,000 job cuts in Malaysia as of July this year, Shamsuddin Bardan, executive director of Malaysian Employers' Federation, told The Daily Star over the phone recently.
As regular migrant workers see a decline in their income, condition of the undocumented ones are even worse.
Mohammad Shahjahan is one such worker with no steady job.
Shahjahan, from Shibganj in Bogra, said he went to Malaysia in 2007 as an electrician. When his work permit came up for renewal, he gave a broker money to do it for him. The broker vanished, leaving him without a work permit.
He has work for 15 or 20 days a month when he is fortunate. He gets to work for 10 days or less during lean periods.
“Last month I worked for a week only. So I had to dip into my savings,” he told The Daily Star on August 13.
The minimum living cost for a worker is 500 ringgits, according to him, but his monthly income swings between 300 to 1,000 ringgits.
“So, my savings are very little or even zero. It is difficult to send home a decent amount,” Shahjahan said.
Zaid Bakht, former research director at the Bangladesh Institute of Development Studies, said families of the migrants would receive less, as the taka was appreciating against the ringgit.
“This will also contribute to the negative growth in migrant remittance,” the economist told The Daily Star.
Malaysia is a net petroleum exporter but its price is unlikely to rise in the near future, he said.
“If the trend continues, future labour recruitment under private sector may not be feasible. Our government needs to be cautious about it,” Zaid Bakht said.