KUALA LUMPUR: Malaysia needs a more liberal employment pass regime which will encourage skilled foreign workers to bring their dependents to live with them, says the director of a think tank.
Bait Al-Amanah founding director Abdul Razak Ahmad said Malaysia’s working pass regime is unattractive due to its many restrictions, unlike the systems in Qatar and the United Arab Emirates.
He said the government must recognise that foreign talent is not only found in developed countries but also in under-developed and developing countries.
“We always think that talent from high-risk countries are people with many security issues. That is very wrong.
“We need a more liberal approach to our working permit (system) that not only allows talent to come, but also gives incentives for families and dependents to come and join them,” he told FMT.
Razak was commenting on a call by Prime Minister Anwar Ibrahim for the enactment of clear and integrated policies to attract and retain investors in line with the current and future needs of industry.
Under current regulations, five-year employment passes are available to those earning a minimum of RM6,000 a month, while those earning at least RM15,000 a month qualify for 10-year passes.
“Not many companies can afford salaries in that range. It restricts this pass to only top-tier companies,” he said, while renewal of normal work permits can be tedious and adds to costs.
He said the current regulations restricts Malaysian investors from bringing in skilled workers from developing countries such as India and Pakistan.
Razak called for the MM2H programme, currently aimed at wealthy foreigners seeking long-term residence, to be integrated with the talent recruitment programme.
He said many talented and high-net individuals seek residency options. However, the minimum income of RM40,000 a month for MM2H visas put the programme beyond the reach of skilled workers.
Only wealthy skilled workers from Western countries can earn that much, he said. “Even if the minimum income is cut in half, it would not attract more low-skilled labour,” he said.
Razak also called for a revamp of the process to obtain permanent residence. He said the system is obsolete, when compared to Singapore, where foreigners with extraordinary skills can obtain PR after six to 12 months.
“The most important thing is to make people feel that they are at home. Permanent residence can actually retain talent and attract a lot of very good talent.”
Vague cybersecurity framework
Razak said Malaysia’s cybersecurity framework is too vague. There were no laws that required companies to report data breaches, which could be “a red flag for many investors, especially those who outsource their IT services”.
“This may not drive away big players such as Tesla or Apple, as they can afford it. However, for medium and small investors, this may be an issue.”
Strong SME vendor ecosystem needed
William Ng, chairman of the Small and Medium Enterprises Association, said consistency in policy-making and a strong vendor ecosystem for small and medium enterprise was needed to attract multinational corporations to consider investing in the country.
He said the government had been plagued by inconsistency over the years.
As an example, he cited the much-vaunted Bill of Guarantees for the Multimedia Super Corridor, launched in 1996.
The bill outlined guarantees such as allowing the employment of local and foreign skilled workers, ensuring no censorship of the internet, and providing world-class physical and information infrastructure.
“Over the years, we have seen content censorship, lacklustre internet performance and restrictions on the hiring of foreign talent as technical personnel and professionals, which have confused and frustrated investors at the same time,” Ng told FMT.
“This gives the impression that the folks who crafted these policies do not look beyond the 10-year timeframe, or that the government is fickle-minded,” he added.
Ng said a strong SME vendor ecosystem is necessary to feed into the supply chain of investors. That would require local SMEs to move up the value chain and acquire the requisite technical competence and financial capability, he said.
Ng said the continued availability of a trained workforce is becoming more important to many investors. He said the government must not compromise on education, which must be industry-relevant and up-to-date.