Expert: Banning foreign workers can backfire

 

Putrajaya's plan to create jobs for locals by pushing out foreign workers could backfire, an economic expert warned.

Carmelo Ferlito, Institute for Democracy and Economic Affairs (Ideas) senior fellow, said that insufficient human resources could force companies to shut down their operations.

This can adversely cause the number of job opportunities available to go down instead.

"Banning foreign workers and (putting more) procedures for hiring expatriates puts stress on companies that are in manufacturing or logistics.

"It is not enough to have locals (to fill in). That kind of capital reshaping will take time, and will happen only when the economic downturn further deepens.

"I already observed companies that closed down because they can't have workers for manufacturing. Now, when they close down, not only are foreigners pushed out of the country, but locals also lose their jobs," he said during a webinar organised by Ideas earlier today.

The forum gathered several economic experts to discuss the Perikatan Nasional government's Budget 2021, which was tabled in Parliament yesterday.

Since the Covid-19 pandemic hit the country early this year, the government closed the country's borders to prevent import cases of the virus.

While border control has eased under certain situations, the entry of foreign workers remains totally banned. However, special exemptions are given to foreigners who hold top managerial posts in local companies.

In its Budget 2021, the government laid out several plans to create more jobs to address the unemployment problem in the country. Among them is by handing out special incentives to companies that replace their foreign workers with locals.

"So, rather than creating more employment for the locals, it will create unemployment," added Ferlito.

Ferlito suggests the government venture into deskilling those who lost their white-collar jobs due to the economic downturn to become blue-collar workers.

He said that while reskilling can be done, the present economic circumstances do not make it useful.

"We can do reskilling, but under present circumstances, there is no work for these jobs. Not creating potential (jobs) for the reskilling to be used elsewhere." - Mkini