THE Centre for Market Education (CME) is perplexed about the new procedures for hiring foreign talent, issued by the Human Resources Ministry.

According to a recent statement by the ministry, all employers who intend to employ foreign workers through a rehiring programme and recruit expatriates are first required to advertise job vacancies on the national portal, MYFutureJobs, effective November.

Vacancy advertisements on MYFutureJobs must not be less than 14 days for the rehiring programme and 30 days for the recruitment of expatriates. This will then be followed by a candidate interview session with the employer’s representative and the Social Security Organisation. 

Foreign workers or expatriates will only be considered if there are no Malaysians interested in applying for the particular position.

While the measure aims to reduce unemployment among Malaysians, it presents important unintended consequences that may lead to reduce foreign direct investment and the presence of multinational corporations in Malaysia, therefore increasing unemployment, rather than reducing it.

Dr Carmelo Ferlito, CME’s chief executive officer, said the most critical points in the measure are:

1. It interferes with employers’ decision process, imposing also the presence of government representatives during the hiring process, which poses serious problems in terms of privacy and independency in the business conduct. 
2. It applies not only to new positions but also to the renewal of expatriate positions, making the future of foreigners in Malaysia increasingly uncertain, with the risk that Malaysia will be unable to attract foreign talents.  
3. It applies to business owners too, which therefore will find themselves in the risk of being replaced in running their own company.
4. This further element of confusion adds on to an already confused scenario, where the limits on hiring foreign workers, the new conditional movement-control order in Selangor and Kuala Lumpur, and the way in which the standard operating procedure is determined and communicated, are discouraging business initiatives, putting at risk existing jobs and the creation of new ones.

Malaysia is playing in a global scenario and the attraction of the best talents plays in its favour, not against it.

CME recognises that in the past decades, Malaysia did a wonderful job in attracting MNCs, thanks to a business-friendly institutional framework, certainty of the rule of law and attractive packages, such as the Malaysian Investment Development Authority Principal Hub scheme. However, the most recent policies are putting at serious risk such great achievements.

In commenting on the report, Ferlito said: “If a MNC is hiring five expatriate top managers and 200 Malaysians, and it is forced to replace those expatriates with locals, how will we end up? With five more Malaysians getting a job or with a MNC leaving Malaysia, leaving 200 people unemployed? Policy-making cannot be driven only by good intentions, a serious consideration of the negative unintended consequences is a must”. 

Ferlito added that this is very much crucial in a moment in which neighbour countries such as Indonesia are developing very attractive policies for FDIs.

CME therefore proposes the following modifications to the new policy:

• Open a discussion table with the relevant stakeholders, and in particular with foreign chambers of commerce, before implementing such measures, rather than after they are in place.
• Identify a salary threshold, such as RM 15,000 a month, above which the new procedure will not be applicable and businesses would be free to hire without using the portal but only with the traditional channels.
• Exclude work permit renewals from the scope of the policy. 
• Exclude business owners from the scope of the policy – October 28, 2020.

* The Centre for Market Education is an academic and educational initiative aiming to promote pluralism and multidisciplinarity in economics learning.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.