Fayyaz: Maldivian economy lacks strength to pay minimum wage to foreign workers

Economic Minister Fayyaz Ismail at the public forum on minimum wage held at the Parliament on March 4, 2020. (Photo/People's Majlis)

Economic Minister Fayyaz Ismail, on Wednesday, opinioned that the minimum wage should not be applicable to foreign workers, citing lack of strength in the local economy to afford minimum wage for its sizable foreign labor force.

Fayyaz made his opinion known during the public forum on minimum wage held at the Parliament on Wednesday night.

He said that while minimum wage should also be applicable to foreign workers based on a humanitarian perspective, the Maldivian economy did not have the strength to pay MVR 6,400 to the estimated 120,000 foreign workers working in it.

Fayyaz said that if minimum wage were made applicable to foreign workers, foreign remittance would rise to an annual USD 800 million. He said that the figure was USD 270 million more than the current annual foreign remittance.

Fayyaz said that the estimated 120,000 foreign workers in Maldives already received wages within the range of the minimum wage in their country of origin.

Majority of the foreign labor force in Maldives is made up of Bangladeshi workers who work in the construction industry. The minimum wage in Bangladesh is 800 takas (approximately USD 94).

Fayyaz said that foreign workers engaged in the most low-wage jobs in Maldives received above USD 100. He said being able to earn more in Maldives was the very reason why Bangladeshi workers chose to leave their home to come work in Maldives.

Noting that the majority of the foreign labor force was employed in the construction industry, Fayyaz said that making minimum wage applicable to foreign workers could potentially increase housing prices, and that he believed the construction industry would still need to depend on foreign labor due to lack of demand for construction industry jobs among the local labor force.

The Salaries and Wages Advisory Board, which is empowered to conduct consultations and research into setting a national minimum wage, and advising the Economic Minister regarding the subject, completed its research and presented a report of its finding to Fayyaz in February.

The Board recommended that the national minimum wage be set to MVR 6,400, and that a separate minimum wage within the range of MVR 6,400 to MVR 8,600 be set for civil servants and tourism sector employees.

It recommended that the minimum wage should be applicable to the basic salary, and that the minimum wage should apply to both foreign workers – after a moratorium period of one to two years - and local workers in order to eliminate discrimination and offer protection to workers from all industrial sectors of the Maldivian economy from within the minimum wage system.

The report is currently under review of the Economic Affairs Committee of the Parliament.

Fayyaz said that he would make his decision regarding the minimum wage as soon as the Parliament informed him of its opinion regarding the subject.