Enough foreign workers to bolster productivity, says economist

 

Economist Geoffrey Williams says there are already 1.5 million legal foreign workers in Malaysia.

PETALING JAYA: An economist has rubbished the Federation of Malaysian Manufacturers’ (FMM) claim that Putrajaya’s freezing of applications for foreign workers will affect the country’s productivity and gross domestic product (GDP).

Geoffrey Williams of the Malaysia University of Science and Technology described FMM’s claim as an “exaggeration”, saying the country has sufficient foreign manpower to support economic growth.

“The freeze will have no impact on productivity because there is actually an abundance of foreign workers and even refugees who could work but are undocumented and stuck here,” he told FMT.

He said there were already about 1.5 million legal foreign workers in Malaysia, and a further 380,000 undocumented migrants were expected to benefit from the extension of the government’s recalibration programme until the end of the year.

Previously, the programme, which went on until Dec 31, 2022, saw more than 410,000 undocumented immigrants sign up to be regularised as legal foreign workers.

Williams said there was also high underemployment in Malaysia, with about 10 million available who are currently unemployed, underemployed or outside of the workforce.

“They can be activated if salaries are raised, so there is no shortage of labour. If this is handled properly, then productivity can improve and GDP would grow,” he said.

Last week, Bernama quoted FMM president Soh Thian Lai as saying the freezing of foreign worker approvals would affect the country’s productivity and GDP as companies would not be able to fulfil their order books, especially for export markets.

Soh said small and medium-sized enterprises (SMEs) would feel the pinch as they were now starting to have better operations or sales.

Nazari Ismail of Universiti Malaya agreed with FMM, saying manufacturers were in need of cheap labour to be competitive in the export markets.

“Intense competition among indebted manufacturers forces them to seek cost reductions, and the easiest way to reduce costs is to use cheap labour,” he said.

Nazari said if companies were not able to fulfil their order books, their long-term reputation would suffer and their revenues would fall.

“Overseas buyers may then source from manufacturers from other countries, so our exports will really suffer,” he said.

He also said a prolonged halt on foreign worker approvals would severely affect SMEs’ production processes. Production planning for SMEs would also become complicated due to shortage of manpower.

On March 18, human resources minister V Sivakumar announced that all applications and processing for foreign workers have been put on hold until further notice.

Sivakumar said the decision was made to allow employers to sort out the arrival of the 995,396 approved workers first. The suspension will be reviewed only after employers have ensured the arrival of the approved workers. - FMT