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A recent BBC report said that Malaysia has plans to kick out its foreign workers in the midst of the global economic downturn. Over 60 percent of the 2.1 million foreign workers in the country are in danger of going back home.

A recent BBC report said that Malaysia has plans to kick out its foreign workers in the midst of the global economic downturn. Over 60 percent of the 2.1 million foreign workers in the country are in danger of going back home.

“There are certain sectors where we should be able to have Malaysians working in those sectors,” Home Minister Syed Hamid Albar said. “At present there are 2.1 million foreign workers in this country and I hope when their contract expires in certain sectors – if the industry does not require them – then we will be able to send them back.”

In a separate report by The Star Online, Deputy Human Resource Minister Datuk Noraini Ahmad said that employers must retrench foreign workers first over their Malaysian staff as part of the government’s foreign worker first out (FWFO) principle. This was one of the recent guidelines that the ministry drafted for employers faced with potential layoffs in their workforce.

Malaysia has been a magnet for foreign workers, particularly in low skilled foreign labor. According to 2006 figures, the top three sources of Malaysian foreign workers are Indonesia (65.7 percent), Nepal (10.8 percent), and India (7.6 percent). As of early 2008, foreign workers make up 21 percent of the 11 million-strong labor force in Malaysia, where unemployment is at about 3.5 percent.

Demand for such labor is due to the growth of the country’s labor-intensive industries. According to the Ministry of Finance’s 2008/2009 Economic Report, 36 percent of the 2.1 million foreign workers are in manufacturing, 16.1 percent in plantation and 14.9 percent in construction. Moreover, demand for foreign workers in Malaysia is high also because locals are just not willing to take such jobs. “The foreign workers do the three D jobs that Malaysians don’t want – dirty, dangerous and difficult,” said Shamsuddin Bardin, director of the Malaysian Employers Federation.

The relationship between foreign workers and Malaysia has been tense. The government has been continually trying to reduce the country’s dependence on foreign workers. These efforts go back to as early as 1997, when then Prime Minister Datuk Seri Dr. Mahathir Mohamad reported that the country needed to fully utilize its existing manpower resources and raise labor productivity instead of importing foreign workers.

In January 2008, Malaysia had plans to cut the number of foreign workers to 1.8 million in 2009 and cut another 300,000 by 2015. A report by the Malaysian Trades Union Congress on strategies to reduce reliance on foreign workers listed several sectors that they think do not need to employ foreign workers “based on experience and availability of local workers”. These sectors include manufacturing, services/hotels, information technology, plantation, construction, health care and security. The same report stated that locals “are not keen to work” as domestic helpers, restaurant waiters and cleaners with cleaning contractors, due to the long hours and low wages, further supporting the argument that locals simply do not want to do dirty, dangerous and difficult jobs.

While many agree on the need to boost Malaysia’s labor productivity, therefore reducing the need for foreign workers, some still criticize the government’s policies to remove them from the country. Some critics argue that such policies are too protectionist and are politically motivated. Chris Eng from the financial services firm OSK said, “I think local sentiment will turn against the presence of foreign workers, as is commonplace throughout the world.” Other argue that kicking out foreign workers, who are more than eager to earn minimal wages, will cost the country more money in new hiring costs and higher wages demanded by the locals.

It is clear that Malaysia will have to find a balance between hiring locals and foreigners, especially for sectors that require a lot of unskilled labor. This will be particularly difficult to do amid the global economic downturn and rising concerns about protectionism.

Source: www.AsiaEcon.org

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Source: www.asiaecon.org |

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