THE World Bank said Malaysia’s lack of a comprehensive policy on foreign workers is costing the country potential economic gains from the region’s increasing rate of migration, reported The Edge.

In a statement yesterday, the bank said its simulations showed that a 10% net increase in low-skilled foreign workers raised the nation’s real gross domestic product by 1.1% as the workers kept salaries low, which, in turn, lowered prices and production costs, and boosted exports.

“In receiving countries, foreign workers can fill labour shortages and promote sustained economic growth if migration policies are aligned with their economic needs.

“Inappropriate policies and ineffective institutions mean that the region is missing opportunities to gain fully from migration,” said the bank’s chief economist for the East Asia and Pacific region, Sudhir Shetty, in conjunction with the release of the Migrating to Opportunity: Overcoming Barriers to Labour Mobility in Southeast Asia report.

The bank said a lack of a comprehensive legislative framework on foreign workers had resulted in problems in Malaysia, leading to frequent policymaking by the Home Ministry or Human Resources Ministry.

The statement noted that current legislation focused on punishing undocumented foreign workers and their employers, and ensuring locals were not put at a disadvantage in the job market due to the presence of foreigners.

It said Malaysia needed an immigration system that was more attuned to the nation’s economic needs, and that the country should collaborate closely with sending countries.

“For instance, Malaysia imposes a levy on foreign workers in part to control the number of low-skilled migrants who enter the country.

“However, even as the economy has evolved, the levy has been left unadjusted for significant periods, for example, in 1999 to 2005, 2005 to 2009, and 2011 to 2016.”

It was reported that the World Bank disputed the purpose of the levy, and that the responsibility for payment had gone back and forth from foreign workers in the 1990s to 2000s, to employers in 2009, and back to the workers in 2013, suggesting a “lack of consensus” on the levy’s objective.

The bank report said such restrictive policies were influenced by the perception that an influx of foreigners would have a negative impact on the country, despite there being evidence to the contrary.

“On several occasions, these policies have been quickly reversed, revised or delayed because of public reaction,” said the bank, adding that this occurred twice last year following a large increase in the foreign workers’ levy.

Between 1995 and 2015, Malaysia, Thailand and Singapore hosted 96% of Asean migrants, where 6.5 million intra-regional workers from Cambodia, Indonesia, Laos, Myanmar and Malaysia were hosted.

Of the total, 22% arrived in Malaysia in 2015, making up 8% of the country’s population. – October 10, 2017.