Part 3 - Apabila Tidak Faham Foreign Remittance

1.  Foreign workers sending back billions of Ringgit to their countries.

Today I would like to talk about the paranoia over foreign workers (Indons, Banglas, Nepalis etc) remitting their wages and salaries back to their countries. This is the same type of paranoia against the 'orang tengah' - without understanding how things work.

Firstly it is not completely a bad thing to have foreign workers working in our country. Or in any country.  No one seems to be complaining about Mat Salleh, Japanese or Korean expatriates who have always been in this country. How come? They also repatriate their wages and salaries which they earn here back to their countries. How come no one complains?

The answer is perhaps in the numbers. When there are SEVEN MILLION Indons, Banglas etc inside the country then their presence becomes more obvious. 

There are two things here :

1.  there are TOO many foreign workers in the country - which is not a good sign

2. that these seven million foreign workers send back billions of Ringgit back to their countries - which is not necessarily bad. 

So allow me to explain. There are now over 500,000 unemployed people in the country.  This includes over 200,000 SPM school leavers who are unemployed (from Asia Sentinel). And there are over 100,000 university graduates who are unemployed. The vast majority of these unemployed are Malays / bumiputras - which is very, very bad. 

The question is how come despite over 500,000 people being unemployed in Malaysia, there are still SEVEN MILLION foreigners (Banglas, Indons, Nepalis) almost all of whom are fully employed? 

Our Indon maids say that if there are any Indons who are not employed they are either lazy or they have some other problems.

There are also a significant number of Banglas and Indons who run businesses that also employ locals - usually Malays. How is that?

We really have to do something about this. The government (and the people) are not paying enough attention to this problem. In a country of 32 million people with a weak economy, there are an extra SEVEN MILLION foreign workers.

However the SEVEN MILLION foreign workers sending back billions of Ringgit to their countries need not be necessarily bad.

Its like this. They earn their incomes here in Malaysia. For every Ringgit of salary paid to the Bangla or Indon, they generate sales and output which are multiple times their salaries.  If wage costs make up say 10% - 20% of sales (as an example) this means that for every Ringgit the Indons send back to their country, they have helped our economy generate RM5 - RM10 of revenues. 

Plus the SEVEN MILLION foreign workers also pay rent, buy food, groceries, clothes, etc while they are working here.  All this money goes into the Malaysian economy.

Here is another way of looking at this.  In 2018, 20% of Malaysia's imports (RM172 Billion) came from China (from Google lah). We paid China RM172 BILLION in 2018 !! That is a lot of money. This means part of that RM172 Billion went towards paying the salaries / wages of Chinese workers in China who manufactured or produced that RM172 Billion worth of products that we imported from them.

(Wouldn't it be better to have their factories here in Malaysia? With or without Chinese workers?)

So it is (almost) the same thing - our economy still has to remit billions of Ringgits out of the country to pay factory workers in China from whom we bought RM172 Billion worth of imports.  All countries in the world import and export things to each other. Trade is good for the whole world.

What is most important is that productivity is involved. 

We import products from China which hopefully have  added value to our economy and to our lives. That it is money well spent. 

Similarly the foreign workers here are producing something that is of value to the economy of the country - usually multiple times the salaries / wages paid to them.  So the SEVEN MILLION foreign workers remitting PART of their wages back to their countries does not really harm our economy.

In fact since Malaysia is still an exporting country and much of the foreign labour works in factories, the foreign workers help Malaysia earn plenty foreign exchange, which strengthens our Ringgit.

So from an economic and financial point of view, these SEVEN million foreign workers are not bad for the economy - as long as they are productive. (Not Nigerian black money scammers, Arab terrorists, Indian Goats inciting hatred etc.)  

N'theless from a social, political and some other perspectives the presence of SEVEN MILLION foreign workers in a country of 32 million people is NOT good for the country in the long run. They need medical services, use public services and amenities etc for which they do not pay - yet. There are also social costs. Will follow up with minimum wages.