Allowing refugees to work would boost economy, govt revenue, says think tank

There are over 160,000 refugees and asylum seekers in Malaysia registered with the UNHCR. (Bernama pic)

PETALING JAYA: A think tank says the economy and government revenue will receive a boost if refugees in the country are allowed to work here.

In a new research paper published today, the Institute for Democracy and Economic Affairs (IDEAS) said assuming that the spending pattern of refugees is comparable to that of the bottom 40 or B40 group, they could contribute over RM3 billion to the gross domestic product (GDP) through higher spending by 2024.

IDEAS chief executive Ali Salman said Malaysia already has a good record of providing a safe haven for those in need, and that refugees can also make an important contribution to the economy.

“The government should move forward with its manifesto promise to give refugees the right to work and encourage them to make the best possible contribution to Malaysia,” he said.

The report, titled “The Economic Impact of Granting Refugees in Malaysia the Right To Work”, noted that Pakatan Harapan’s manifesto had promised to ratify the United Nations’ 1951 Refugee Convention and grant refugees the legal right to work.

IDEAS said the government could benefit from an estimated RM50 million in tax returns by 2024 by giving refugees the right to work.

“The legal right to work would also increase income for refugees already in employment by reducing the scope for exploitation.

“Illegal workers in Malaysia, including refugees working illegally, are vulnerable to exploitation by employers, including lower wages which can also be withheld.”

The report said better income would enable refugees to buy more higher quality goods and services, stimulating demand for goods and services, particularly those produced locally.

It said granting refugees the right to work would also see an increase of labour supply.

“In theory, the increase in available workers would reduce wages in the sectors in which refugees are employed, in turn lowering costs for businesses, and stimulating production and investment.”

IDEAS added that any negative labour market impacts of allowing refugees to work would likely be “minor” and limited to other foreign workers and older, less educated Malaysians.

IDEAS also urged Putrajaya to consider investing in education for refugees to maximise the potential of their long-term economic contributions.

Granting refugees the same access to education as locals, it said, could increase their contribution to GDP to over RM6.5 billion annually and tax contributions of over RM250 million by 2040.

There are currently over 160,000 refugees and asylum seekers in Malaysia registered with the United Nations High Commissioner for Refugees.