Evelyn Shyamala A P Paul Devadason

Policies and Laws Regulating Migrant Workers in Malaysia: A Critical Appraisal

This paper reviews policies and laws governing migrant inflows and their presence in the Malaysian economy. This study finds that policy failures are basically built on the ad hoc management of in-migration, lack of enforcement of existing regulations and abusive practices of various stakeholders. Likewise, work and provision of basic rights for migrants under specific laws are found to be somewhat discriminatory and arbitrary. Hence, the immediate challenge for policy makers is to ensure effective management of migrant workers, beginning with a clear policy on recruitment, placement, monitoring and finally the return of migrant workers to their homeland. Furthermore, amendments to specific laws are needed to ensure that migrant workers are accorded equal labour standards and basic rights as those of locals.

ASEAN–China Trade Flows: moving forward with ACFTA

There are claims that Chinas influence on ASEAN is direct in that she has encouraged more exports to flow into her huge markets and changed trade flows amongst member countries. Demand and supply are deemed to have therefore become more China-centred. This paper looks at the plausibility of China as a ‘factor’ that influences bilateral intra-ASEAN trade flows through demand (exporting country) and supply (partner country). The key finding of the study is that Chinas trade association with the region increases intra-ASEAN exports. China is therefore the most practical choice for the ASEAN+1 FTA to initiate deeper trade integration within the region. China, as the ‘core’ country of the ACFTA can provide complementarities in the export performance of ASEAN.

Leveraging trade opportunities with non-traditional partners: the Malaysia–GCC perspective

Abstract This paper examines the impact of economic factors on bilateral trade flows between Malaysia and the GCC through estimations of panel data using a gravity model. In particular, the paper compares the determinants of bilateral trade and trade potentials between Malaysia and two regions, the non-traditional Gulf alliance and the traditional ASEAN counterpart, to provide insights for leveraging opportunities through trade with the former. The gravity estimates imply the importance of size effects, similarities in GDP and differences in factor endowments as drivers of trade flows between Malaysia and the GCC, underlying the fact that inter-industry trade dominates these flows. The opposite holds in the case for the Malaysia–ASEAN trade. Though export potentials for industrial products per se appear exhausted in trade with both regions, the Gulf region provides opportunities for Malaysia to export quantity-based final (end-use) products and to diversify its exporting strategy away from quality-based parts and components.

Malaysia-China Network Trade: A Note on Product Upgrading

Abstract This article addresses the importance of network trade between Malaysia and China and assesses the extent of product upgrading in components traded. The study brings to the fore the following points. First, China is emerging as an important market for component imports relative to component exports. As such, the increase in two-way flows of parts and components for further processing and development, implying a shift away from assembly-end operations, remains insignificant. Secondly, network trade appears to have improved the quality of exports destined to China (reflecting a “moving up of the value chain”), but the gaps between the unit values of export and imports have narrowed in the recent past, implying less product development.

The Trans-Pacific Partnership (TPP): The Chinese Perspective

The Trans-Pacific Partnership (TPP) was accepted by the Asia Pacific Economic Cooperation (APEC) as one among other pathfinders, including the ASEAN 3, ASEAN 6 and others, for a comprehensive Free Trade Area of the Asia Pacific (FTAAP). Though the TPP negotiations do not include China at the moment, she is paying close attention to it. In fact, many question the likely success of the TPP with China’s exclusion from the TPP given her prominence in the region. China’s membership in the TPP may in itself be a central strategic challenge for the TPP. The key question is thus: Should China join the TPP? The paper therefore seeks to assess the opportunities and challenges that prevail for China if she was to accede to the TPP. To provide insights for leveraging trade opportunities with the TPP economies, China’s trade potentials with the TPP are empirically tested and compared with that of the ASEAN, ASEAN 3 and ASEAN 6. The trade potentials are derived from an augmented panel gravity model. Finally, the paper contends with the reality of China joining the TPP by examining some of the challenges emanating from the trade-related issues that are considered to be overtly politicized in the TPP.

Whither Sub-Regional Cooperation? The CLMV Perspective

Recent debates advocate that closer sub-regional cooperation may be an excellent start to stronger regional cooperation. The study investigates this proposition for the case of CLMV countries that remain less integrated into the ASEAN region, based on their trade links with China. In this respect, the China-CLMV trade flows are examined, prior to detailing the role of China as a core trading partner to CLMV, within the context of intra-ASEAN regional and intra-GMS sub-regional synergies. The study points out that overall, the CLMV trade relations with China remain unbalanced in terms of volume and structure of trade. Nevertheless, sub-regional membership of CLMV in the GMS is found to be relevant for deepening China-CLMV trade ties for two reasons. First, China plays a greater catalytic role, along the dimension of an export destination, in enhancing intra-GMS trade relative to intra-ASEAN trade. Second, common border effects are found to be significant only for sub-regional trade, consistent with border trade as the modality of cooperation within the GMS.

China and India in world trade: Are the Asia giants a threat to Malaysia?

Abstract With higher shares in world merchandise trade and improvements in product quality, China is better positioned than India in the near term for influencing global trade. From the Malaysian perspective, China represents a non-negligible share in Malaysias trade. The trends in bilateral trade with both Giants however suggest that competition has intensified. Relative to India, China appears to promulgate a more influential role on Malaysia via higher commodity overlap in external markets, greater matched trade that is of vertical differentiation, distinct quality shifts and negative adjustment pressures. Within this broad rubric of trade-induced changes, there is no evidence of skill upgrading for Malaysia in trade expansion with both Giants. This mirrors the lack of product quality improvements and the low levels of export values of high quality varieties in matched trade. Hence trade induced changes from the Giants that have been cited to be favourable from the Malaysian perspective in previous studies, may have been grossly overstated.

Business excellence: the managerial and value-creation efficiencies of the insurance companies

The competitive global environment today has brought with it profound challenges, leading to excessive risk-taking behaviour by insurance companies. These companies require retaining their performance at high levels, while dealing with risk-taking behaviour. Following this, performance evaluation has emerged as a fundamental building block of total quality management and business excellence for an organisation. Hence, this paper aims to decompose the overall performance of an insurer into two efficiency components, managerial efficiency and value-creation efficiency, where risk management activities are embedded in the efficiency evaluation. This paper applies a network data envelopment analysis model to evaluate the performance of 30 Malaysian insurers for the period 2008–2012. The performance analysis indicates that the average overall efficiency of the insurance sector in Malaysia was approximately 63.5%, largely attributed to value-creation efficiency. The frontier projection analysis reveals that Malaysian insurers should enhance their managerial ability by substantially reducing their input quantities. Finally, through a managerial decision-making matrix, only nine insurers are classified as having high levels of both managerial and value-creation efficiencies. Significant differences in managerial efficiency and value-creation efficiency among insurers suggest that decision-makers in insurance companies of Malaysia seem to have directed resources to address the specific inefficiency types.

International Capital Inflows and Labour Immigration: A Heterogeneous Panel Application in Malaysian Manufacturing Industries

The paper examines the relationship between inward FDI and unskilled migrants for a panel of 23 industries using the new trade theory multivariate model framework for the period 2000-2009, and compares the links with 1985-1999 (first-subperiod) and 1985-2009 (overall period) in a univariate context. Based on heterogeneous panel cointegration tests, there is a long-run equilibrium between inward FDI, unskilled migrant share, output growth, export intensity and market concentration. The long-run cointegrating coefficient based on the FMOLS estimator suggests the presence of unskilled workers a significant location determinant for inward FDI for the first sub-period and the overall period. The results of the panel vector error correction model further attest to causal links between unskilled migrant worker presence and inward FDI in the short- and long-run. Bidirectional causality between inward capital and labour flows is present in the first sub-period and unidirectional causal links from unskilled migrants to inward FDI is evident for the overall period. The observed FDI-immigration (unskilled) links in manufacturing support the argument that inward FDI is induced by unskilled migration. Overall, unskilled immigration increases FDI inflows or rather “capital chases labour” in terms of international factor mobility. This has profound implications for public policy as the government seeks to reduce its dependence on migrant workers. Policy coordination is therefore needed between regulating inflows of foreign capital and foreign labour so that implemented policies do not pull in different directions and undermine Malaysia’s attractiveness as a destination for FDI.

Human capital development for SMEs in Pakistan: is the “one-size-fits-all” policy adequate?

Purpose - – Pakistan adopted “one-size-fits-all” policy for human capital (HC) development with the assumption that the level of HC is equal across industry and firm size. The purpose of this paper is to test this major assumption on which this policy is based, by comparing the differences in the levels of HC, overall and by dimensions of HC, by industry and firm size. Design/methodology/approach - – The study is based on new data set of a sample of 750 manufacturing SME firms in Pakistan, compiled through a survey. Applying the independent sample Findings - – The results indicate significant differences in the levels of HC by industry and firm size. The levels of HC were found to be higher in textiles, food, metal and leather industries, and for medium-sized firms. Practical implications - – The findings provide supporting evidence on the inadequacy of the current human capital development (HCD) policy in Pakistan. The study therefore recommends customized HCD policies, accounting for differences across industry and firm size. Originality/value - – By taking the data on nine major dimensions of HC from 750 manufacturing sector SMEs, the study tests the level of overall HC and its nine dimensions by industry and size. The study also challenges the “one-size-fits-all” policy of the government of Pakistan for developing HC in SMEs.