There are too
many of them and we all have to take the blame for their existence. They are everywhere; restaurants, petrol
stations, construction sites, plantations, security posts, factories, wet
markets, farms, you name the sector, they will be there. They come from
everywhere; it used to be mainly Indonesia, now they come from Bangladesh,
Myanmar, Vietnam, Cambodia, Nepal and India.
The Government,
in their attempt to address the problem of illegal foreign workers offered to
legalise them via the 6P Programme. Over 2.3 million foreign workers voluntarily
registered through the biometric system under the 6P programme after the
registration period ended on Aug 31 and over 50,000 of them had decided to
return to their countries of origin.
According to a
Bernama report on 12 December, Home Minister Hishamuddin said the government is
expected to determine the required number of foreign workers according to
economic sectors by middle of next month. He said 93,000 illegal foreign
workers involved in the legalisation process under the 6P programme were
expected to fulfil each sector's requirements.
2.3 million registrations
means there were at least 2.3 million illegal foreign workers roaming our
streets!
2.3 million
registered but only 50,000 decided to go home! The remaining 2,250,000 are
still roaming our streets!
2.3 million
registered but the government will only place out 93,000 to the sectors
requiring them (refer Hishamuddin’s statement as reported by Bernama above).
What will happen to the remaining 2.157 million workers?
My question is; do we need them?
Some reports
state that Malaysia has 1.8 million legal foreign workers. Add the 2.3 million
just legalised, we have around 3.1 million foreign workers. With a labour force
of about 12 million, foreign workers represent 25% of all our workers. The
2010/2011 Economic Report states that of the 1.8 million registered migrant
workers in Malaysia, 38.2 per cent were employed in the manufacturing sector,
16 per cent in the construction and 14.2 per cent in the plantation sectors.
Indonesians
accounted for the highest number of registered foreign workers in Malaysia at
50.9%, which was attributable to their country’s proximity to Malaysia and
cultural and language similarities.
Bangladeshis
were second highest, accounting for 17%, followed by Nepalese at 9.7%, Myanmars
at 7.8%, Indians at 6.3% and Vietnamese at 4.2%.
The latest
unemployment statistics put the unemployment rate at 3.3% i.e. almost 400,000.
Given this (simplistic) analysis, yes, we need foreign workers.
My next question is; why do we need them?
Human Resources
Minister S Subramaniamin an interview admitted that over dependence on foreign
labour was the “biggest issue” faced by his ministry but efforts by the
government to reduce the numbers have been met with difficulties, including
opposition from employers. “Malaysians have become too dependant on foreign
workers. The way forward is for the employers to have a change in their
mindsets,” said Subramaniam. This mindset change, he said, must translate into
employers being less labour dependent and more skill dependent. Subramaniam
said many developed countries have gone through this phase and have been able
to transform themselves by using less manpower and more machines. He believes
Malaysia can change, too. He said the country is caught in a “vicious cycle”
where wages are low and locals don’t want to work. “And because locals don’t
want to work, foreign workers come in, and the more they come in, the more
wages won’t increase,” he said, adding that he hopes wage increases would help
alleviate this problem.
Eighty per cent
of the workers in the plantations sector is a non-Malaysian, according to the
Malaysian Employers' Federation and a drop in foreign worker arrivals could
further worsen a labour shortage and lower output growth.
In the
construction sector, where two-thirds of the workforce is foreign, a labour
crunch could disrupt large government infrastructure projects with a
significant multiplier effect.
Many Indonesians
also work as domestic helpers. One in every 16 residents in the capital Kuala
Lumpur hires an Indonesian helper, according to data from the Indonesian
embassy.
Prof Datuk Dr
Mohamed Ariff of the Malaysian Institute of Economic Research believes that if
Malaysia had not allowed the massive influx of foreign workers, local
manufacturers would have been forced to innovate and automate to boost
productivity to maintain their competitiveness.
Economists say
continuous dependence on cheap foreign labour would not encourage local
corporations to mechanise, which is necessary to push the economy to a
high-income level as defined by the World Bank.
“Over-reliance
on foreign workers can have detrimental consequences, and that is why the
government is looking at ways to reduce dependence on them.
“This high
dependence cannot be done away with overnight, as a sudden repatriation of
foreign workers can have serious repercussions on the economy, especially in
sectors like manufacturing, construction and plantation,” Mohamed Ariff was
reported as saying.
So, to conclude,
we do need foreign workers but at the same time we need a shift in our mindsets
to reduce our dependence on them. The main thing to do is to automate our
processes. This is however easier said than done. Automation requires large
capex and large capex will result in higher costs which lead to higher prices.
Another question then arises; are we ready to accept higher prices for our
goods and services? Maybe we have to bite the bullet for the sake of our
country’s future.
Another thing is
to make the 3D (dirty, demeaning and dangerous) sectors more attractive to
jobseekers. Yes it sounds ridiculous, how do we make dirty, demeaning and
dangerous jobs attractive? Maybe by increasing wages? Increasing the wages of
the lower end of the scale will inevitably push the wages of the higher scales
up and maybe the goal of a high income economy might be realised. Increasing
wages also could negate the effects of higher prices caused by the automation
process.
Like Prof Ariff
said, the high dependence cannot be done away with overnight so we must start
the ball rolling immediately. Incentives must be given to industries to
automate and reduce dependency on unskilled foreign labour. Wages must increase
to attract workers into previously unattractive sectors. Non-financial benefits
must also be increased to further encourage the jobless to apply for jobs in
the sectors they previously shunned.
We have acknowledged
that the dependence on these workers is not good for the country in the long
run. We must do something about it. Now.