Missed opportunities for foreign talent

The number of visas issued to foreign workers in the “expatriate talent” category in 2023 was higher than pre-pandemic levels after several years of decline.

Despite this rise, the number is still very small and looks more like a return to the average pre-Covid levels and the approval of previously delayed applications rather than a rebound in expat talent recruitment and opportunities.

At less than 1% of the total workforce the available foreign talent pool is small and signals that Malaysia may not be very attractive or very welcoming to high-skilled foreign workers.

There are no particularly positive aspects to the low number of high-skilled foreign workers and the downside is that the skills mix and the access to talented people with different approaches and perspectives is very restricted in Malaysia.

For the workforce as a whole it signals a lack of internationalisation and diversity and for the economy as a whole it signals that opportunities available from a larger, internationally diversified workforce might be missed.

This is the main reason why foreign talent is needed.

We know that there is no lack of local talent in the Malaysian professional and high-skilled workforce. The problem is lack of jobs in these areas.

This is why Malaysia has underemployment of around two million people with qualifications higher than the jobs they are doing.

We also know that Malaysia does not have a brain drain problem since the data show that more talent is coming into Malaysia than leaving which means the talent flow is net positive.

In fact Malaysia already has almost six million graduates in a workforce of around 17 million. This is already more than the 35% target of the Madani government.

The problem is that two million people with high skills and qualifications cannot find jobs to fit those high skills.

So Malaysia needs to move up the value-chain in terms of the type of employment available if it wants to maximise the potential of local and international talent.

The problem for employment of expatriates is that we are not allowed to fully participate in the economy.

There are many restrictions, first on hiring us but then also on basic living and working necessities.

There are restrictions on personal and business banking, finance and access to loans, house purchases, access to government grants and contracts and even the areas where we can and cannot invest or do business.

For example simple placements in fixed deposits are restricted for expatriates.

Although we can have EPF accounts we cannot make voluntary contributions.

We can only buy expensive properties and have a higher deposit requirement when buying a car.

The list goes on. So there is an incentive for expatriates to move our savings and investments out of Malaysia because of restrictions on saving and investing here.

Expatriates are also put on short-term contracts which can be terminated easily with very little legal protection.

The Malaysia My Second Home (MM2H) fiasco, slow processing of long-term visas and the virtual impossibility of permanent residency make life precarious.

So again there is no incentive to keep your income, savings and investment here and Malaysia loses that benefit and the higher tax revenue that would come from it.

More important than this is the loss of opportunities for meaningful, long-term engagement and sharing of skills, talent, ideas and experiences in a mutually beneficial way.

These foster many well-known benefits for trade and investment which underpin economic growth and development.

So it is not the “large” number of high-skilled foreign workers that is a danger to Malaysia, it is that there are too few. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.