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Foreign workers, a double-edged sword

July 1, 2014


foreign-workers2From: Chua Tong Ka via e-mail

It is quite expected that Malaysia was downgraded to Tier 3 (the lowest tier) by the US in its annual State Department’s Trafficking in Persons (TiP) report.

It is also predictable for Malaysia to protest and deny that they deserve the downgrade.

To me, this is how it will be until and unless Malaysians are honest enough to admit that the entry of foreign workers (whether legal or undocumented) into our country is taking place unchecked.

The trafficking and exploitation of foreign workers are now the two major money spinners of government officials, traffickers and business people.

Government intervention to do the right thing regarding foreign workers is hard to come by and far in between for the simple reason that officials will be stepping on too many toes.

So far the focus of any debate on foreign workers has been about their rights and how they are exploited and mistreated. Very little emphasis is placed on why Malaysia is home to millions of undocumented workers in the first place.

To me this is so because too many people have vested interests. Corruption is also rampant and so exploitation of foreign workers will go on unabated.

It is about time our foreign workers policy is brought to the forefront for debate by all right-minded Malaysians including leaders in Barisan Nasional and Pakatan Rakyat.

Why has Malaysia allowed the almost unrestricted entry of foreign workers into the country? Is Malaysia really experiencing a labour shortage? What are the unintended consequences to a nation inundated by foreign workers?

There are hundreds of thousands of Malaysians now working abroad, particularly in Singapore. There are 1.3 million workers in the government service and I believe this figure would be even higher if we include all government-linked companies (GLCs) and statutory bodies.

A large number of Malaysians working abroad and in the public sector (doing ‘jobs’ few of us really know the economic value of), are clear indicators that Malaysia is not short on labour but is experiencing a surplus of labour instead.

Malaysian workers are now ‘mismatched’ in their own country due to changes in the production function (the way our economy produces goods and services based on factor inputs and productivity) brought about by the unfettered entry of foreign workers.

Our political leaders should stop pretending Malaysia is close to becoming a high-income developed nation. We are instead a labour intensive nation with low mechanisation, low automation and low productivity.

Today we have three so-called ‘advantages’ in our competitive equation – low wages, poor and dangerous working conditions and worker exploitation.

There is no incentive and rationale to innovate, automate or mechanise when foreign workers are available in abundance.

As a result Malaysian workers are pushed down the economic ladder unless they venture abroad or seek employment in the public sector.

While there is probably still room for Malaysians to venture abroad, the government’s ability to continue absorbing surplus workers into the public sector has probably reached its limit. This is the reality we must all face today.

What then is our priority?

Rightly, foreign workers should be brought in to supplement our workforce, not  determine our production function or turn Malaysia into another Indonesia or Bangladesh.

It is time to have an unequivocal time frame to gradually reduce the country’s dependence on foreign workers.

There must be clear quantitative restraints on foreign workers before any change in production function toward higher productivity can take place.

If not, the Malaysian economy will continue to drown in low productivity levels while Malaysians will forever be caught in the middle-income trap.

We cannot have the cake and eat it too. Why not look at New Zealand for a change?


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