Wednesday, October 22, 2014

Investment News and Commentary from Emerging Markets in Asia - China, India and ASEAN




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Update: Emerging Asia Minimum Wages and Labor Law

Mar. 14 – In an effort to combat inflation and prevent any outbreaks of labor unrest, several emerging Asian nations are copying China’s strategy to push for higher minimum wage levels and enact new labor laws to protect workers’ rights.

Malaysia
Malaysia will announce the country’s first-ever minimum wage plan this month, according to an anonymous government official. This marks a turning point in Malaysia’s labor relations as the wages have always been determined by the market. Reuters reports that the cabinet has approved a minimum wage of 800 ringgit (US$262.34) to 900 ringgit (US$295.06) per month, depending on the region. Such minimum wage standards would only be slightly above the surveyed poverty line of 760 ringgit (US$249.16) per month.

Thailand
In October 2011, the Thai government pushed for a nearly 40 percent increase in minimum wages countrywide. For Bangkok and six other relatively rich provinces, the minimum wage was set to be up to 300 baht (US$9.76) per day. The new minimum wage will be effective from April 1, 2012.

Indonesia
According to Indonesian law, local governments have the authority to set their own minimum wages, and the minimum wage differs from region to region and sector by sector. However, the beginning of 2012 has seen widespread labor unrest across some of the country’s key industrial areas. In response, local governments have raised minimum wages in key industrial zones near Jakarta by as much as 36 percent in February, from US$170 per month to as much as US$230 per month.

Vietnam
In August 2011, the Vietnamese government announced a proposed hike in minimum wages to combat widespread inflation. Minimum wages rose by 29 percent for foreign-invested companies and 48 percent for Vietnamese companies in Hanoi and Ho Chi Minh City, while other regions saw a roughly 30 percent increase in domestic companies and 46 percent in foreign companies. The minimum wage ranges from VND1,400,000 (US$67.34) per month in remote areas to VND2,000,000 (US$96.20) per month in the key cities of Hanoi and Ho Chi Minh City.

Myanmar
A new law that grants workers the right to unionize and stage protests took effect on March 9, 2012 in Myanmar. According to the Associated Press, the law allows workers to form unions with a minimum of 30 members. Moreover, it permits workers to stage strikes if they give 14 days’ notice in advance and provide details of the strike, such as the number of participants and expected timeline. Furthermore, employers will be charged up to one year in jail and a fine of 100,000 kyat (US$125) if they dismiss workers for going on strike or joining unions. In the meantime, workers will face up to one year in jail and a fine of 30,000 kyat (US$38) if they stage a strike without abiding by the law.

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