Economic insecurity has emerged as a significant threat to political stability in countries worldwide, particularly in Southeast Asia. Recent events, including violent protests in Indonesia and legislative developments in Malaysia, further illuminate this pressing concern. The rapid rise of gig work and the persistent low wages in the formal sector have created a landscape fraught with uncertainty and dissatisfaction, risking civil unrest and political turmoil.
The Rise of Gig Work and Informal Employment
In many Southeast Asian nations, including Indonesia and Malaysia, a substantial portion of the workforce is engaged in informal sector jobs, particularly gig work. As reported, millions of individuals face low wages and unstable employment conditions, reflecting a failure of the formal economy to provide adequate job opportunities. In Indonesia, for instance, the recent protests were partially triggered by the grievances of gig workers, who are often left unprotected and vulnerable.
In Malaysia, the passage of the groundbreaking Gig Workers’ Bill 2025 represents a pivotal response to this crisis. This legislation mandates contributions to social security funds for gig workers and establishes a tribunal for addressing their grievances. While this is a step in the right direction, it underscores the systemic issues that necessitated such reform in the first place.
Impacts of Economic Insecurity
Economic insecurity in Southeast Asia manifests not just in the gig economy but also across various sectors. A staggering 1.2 million Malaysians are engaged in gig work, a testament to the broader struggle faced by those entering the job market. For many, low-paying and unstable jobs are the only options available due to a lack of attractive opportunities in the formal sector. This economic reality fosters a cycle of despair, where individuals are pitted against unskilled foreign labor willing to work for less, further exacerbating wage suppression.
This downward spiral affects not only unskilled workers but also those with higher qualifications. Many skilled Malaysians opt to work abroad, particularly in Singapore, where they find better salaries and working conditions. This brain drain presents additional challenges for industries that struggle to innovate due to a lack of skilled labor.
The Role of Government and Industry
The Malaysian government faces the urgent task of addressing the multifaceted nature of economic insecurity. Many businesses depend on unskilled foreign labor, which inadvertently stifles productivity gains and innovation. Companies that fail to adapt to modern demands and invest in technology risk falling behind competitors, particularly in rapidly advancing markets like China.
The situation is further complicated by external factors such as the global price war originating from China’s industrial involution, trade tariffs, and technological advancements. These factors collectively impact Southeast Asian manufacturers, leading to closures and job losses, galvanizing public discontent.
Long-Term Economic Paradigms
Simply addressing the symptoms of economic insecurity will not suffice. Structural reforms are necessary to alleviate the underlying issues, such as low wages and inadequate social protection. Public discourse often revolves around the rising cost of living, but this issue is intrinsically linked to low pay and insufficient public services.
Historically, several nations have navigated similar crises through strategic reforms. For instance, South Korea’s proactive land reforms were aimed at mitigating economic insecurity during a period of geopolitical tension. In contrast, policies favoring unrestricted free-market economics, as seen in the 1990s, have often exacerbated income inequality and social unrest.
Building a New Economic Consensus
To avert a repeat of past mistakes, stakeholders—including government, industry leaders, and civil society—must collaborate to redefine the economic landscape. A new economic consensus is needed, focusing on equitable development and sustainable growth. This consensus should prioritize the protection of vulnerable workers, integration of technology, and a heightened focus on productivity.
As Malaysia envisions a shift towards a more inclusive economy, it is crucial to recognize that economic insecurity is not merely an economic issue but a political one. The potential for unrest looms large if the political establishment fails to address the grievances of the population.
Conclusion
Economic insecurity is a pressing concern that poses severe political consequences. The experiences of Indonesia and Malaysia highlight the urgent need for structural change aimed at fostering job security, enhancing worker protections, and promoting sustainable economic growth. As nations navigate these complex dynamics, the need for a collaborative approach that prioritizes the welfare of all citizens has never been more vital.
Without immediate and concerted efforts to address economic insecurity, the risk of political instability remains ever-present. As Liew Chin Tong aptly notes, “economic insecurity is a political tinderbox,” and it is incumbent upon leaders to act swiftly and decisively to forge a new path forward—one that ensures both economic vitality and social stability.
