THE employment rate has been hard hit by the Covid-19 pandemic. Although the number of people who have lost their jobs is officially reported to be around 800,000 many believe the real figure is much higher. The younger generations are amongst the hardest hit as being the most junior, they are the first to be retrenched and the new job seekers cannot find new jobs. That is the tragic situation of the youth today.  

In recent weeks, foreign workers received wide attention in media following protest in Bangladesh  against alleged mistreatment and mismanagement of foreign workers under the foreign workers management system (FWCMS) by Bestinet Sdn Bhd. This is followed by calls to halt the influx of foreign  workers against the background of Covid-19 pandemic and its direct impact on our economy, businesses  and unemployment. With our current sad local employment situation the foreign workers should not be allowed or even considered.  

In this context, one of the issues that should be deliberated in the cabinet meeting by the home affairs minister is the issue of foreign workers and its management especially in view of the FWCMS system  implementation.  

1. Malaysia remains one of the countries in the region with high reliance on low-skilled foreign labour force with direct impact on key macroeconomic costs and social national Interest. This  includes promoting low-skilled job creation, deterring productivity enhancement and upskilling of  local workforce and depresses overall pay. There are also issues of outflow of funds and illegal  immigrants who evade proper channels to avoid the high cost involved. Foreign workers today  comprise 15% of Malaysian workforce although many believe it to be much higher. (Source: BNM. Low-Skilled Foreign Workers’ Distortions to the Economy, 2018)  

2. Also at stake is Malaysia’s reputation as complaints of mistreatment of foreign workers and overall  foreign workers management which is now under international scrutiny. According to Human Resources Minister M. Saravanan, 91.1% of 1.6 million foreign workers in the country,  or 1.4 million, are provided with accommodation that does not comply with provisions under the Workers’ Minimum Standards of Housing and Amenities Act 1990 or Act 446.  

3. It has also come to light that there is an increase of unemployed persons with more than 800,000  losing jobs creating concerns as to how much higher the unemployment rate is expected to rise with a prolonged movement control order (MCO) and how to avoid a severe impact on the national economy which will affect people’s livelihoods.  

4. Amid all this, Saravanan was reported to be in discussions with his  counterpart in Bangladesh to open borders to allow in foreign workers to Malaysia This is unacceptable and even unthinkable. 

5. Taking all the above into consideration, it is important to halt new incoming foreign workers until  a comprehensive study is conducted on labour redeployment strategy post pandemic. Added to this, there should be an investigation into the FWCMS, which came under so many  criticisms since its introduction as a proof of concept project in 2015 under KDN.  

Objective  

The objective of this article is to highlight the issues related to foreign workers and its impact to the  country should it be debated in parliament so that the cabinet can defer any decisions with regard to  foreign workers subject to a detailed study to be undertaken.  

That is why the functioning of the parliament is crucial in this critical period. 

Economic considerations

1. Unprecedented economic implication and uncertainty due to Covid-19. Cautious  attitude among private sectors delaying much needed investment and capital expenditure.  Instead, they focus on capital preservation and austerity drive measures.  

2. According to a news report, a total of 2,713 small and medium-sized enterprises (SMEs) in Malaysia  closed down between March and October 2020, during which the MCO was implemented in various phases to stem the spread of Covid-19; 

3. Over time the implication will be huge on local working adults in Malaysia with limited job opportunities;  

4. Job opportunities will be hugely affected post Covid-19 as a result of business closures. We have  seen some big name MNCs leaving our shores and big corporations implementing rationalisation  exercise;  

5. Malaysia’s unemployment rate rose 4.5% in 2020, the highest rate recorded since 1993, according to the Statistics Department (DOSM);  

6. DOSM also stated that the number of unemployed individuals in December 2020 also rose for the  annual comparison, rising 1.6% to 772,900 individuals or at a rate of 4.8% in December; and 

7. According to the Malaysian Employers Federation, “Every year, 500,000 Malaysians enter the job market, which means next year, there will be at least one million jobseekers”.

Foreign workers in Malaysia

According to Jarud Romadan of Khazanah Research Institute, Malaysia is home to around two million  documented migrant workers, comprising around 15% of the total workforce. In addition, World Bank  estimates that there are about 3.3 million undocumented foreign labourers in our country, mainly  concentrated in the manufacturing sector (36%), followed by construction (19%) and plantation (15%)  sectors; (Source: SHRAM, Khazanah Research Institute , Low protection for migrant workers in Malaysia  during Covid-19, November 2020)  

Combining both figures, in total of 5.3 million jobs are filled by foreign workers across sectors;  

Similarly, thousands of foreign workers have lost their jobs and according to the International Labour  Organisation there were cases of migrant workers being unfairly terminated or not getting paid when  Malaysia’s nationwide coronavirus lockdown was first imposed in March (Source: CNBC, Neglect of  migrant workers could hurt Malaysia’s economic recovery, November 2020); 

This situation is expected to get worse if the vaccination roll-out plan faces any delay.

In July 2020, international news broadcaster al-Jazeera aired a documentary depicting Malaysia’s  treatment of undocumented workers during the Covid-19 pandemic.  

The public backlash against al-Jazeera and its journalists became news, as angry netizens said the  allegations of racism and discrimination against undocumented migrants in Malaysia were untrue.  

Four months later, Malaysia’s treatment of migrant workers made headlines again, this time involving  documented ones, foreigners who had sold everything to legally travel to work in Malaysia.

Recommendation 

Due to the current pandemic and economic downturn, there is already an excess of both documented and  undocumented foreign workers in Malaysia.  

Hence, to consider bringing more foreign workers into the country (via FWCMS) in this current economic  situation is perplexing as the focus should be on reviving the economy, addressing unemployment issues  and job creation for Malaysians.  

There needs to be a proper study into addressing the current issues relating to on-soil foreign workers,  and to question whether bringing in more foreign workers would aggravate more issues economically,  socially and politically;  

Why would we want to worsen the situation and who is pushing for this?  

Unprecedented unemployment rate post Covid-19 is expected amongst local workers. Similar fate is  expected amongst foreign workers in job loss especially for those undocumented foreign workers. As a  result, potential abuse and social issues may rise if no action is taken.  

Possible allegations of human trafficking, money laundering, mental and physical abuse involving foreign  workers would definitely mar Malaysia’s reputation in the international front. The nation which is known  to be an all-embracing, foreign-national friendly country, and even protects and homes refugees, needs to be lasting image and not otherwise.  

Covid-19 impact on local SMEs and businesses  

SMEs and micro-businesses make up about 98.5% of businesses in Malaysia. The Prihatin Rakyat  Stimulus Package (Prihatin), and the additional stimulus was seen as a good move to assist the flailing  businesses in the nation, but they were only sufficient to aid the SMEs for a short term. The government is  still urged to come up with more sustainable forms of financial aid to ensure the longevity of the local  businesses.  

Consequences  

Foreign workers are an integral component of our labour market and its importance to Malaysia’s  economy is undeniable. Nevertheless, it is important to strike the right balance between local and  foreign workforce composition in ensuring a more sustainable labour policy to support our economy’s  long-term growth.  

It is also timely to reassess our labour policy thus allowing us to reset the play post-pandemic in light of:  

1. Providing more jobs to local workers, especially with more youth becoming available re deploy existing foreign workers and legalise undocumented foreign workers;  

2. The government should focus on conducting an extensive study on the current labour market in  Malaysia in order to come to a decision on how best to move forward in relation to human  resource management and its policy; No ad hoc actions should be allowed.  

3. This study will require a combined effort from all government agencies to mainly manage  existing human resource in the country and plan for the development of future human capital  needs for a brighter future.  

4. This will include but not limited to up-skilling and re-skilling local workers and redeployment of foreign workers to relevant sectors;  

5. Once these have been identified, the planning of hiring new foreign workers will be more cost effective and will bring good impact to the economy as a whole; and  

This holistic and comprehensive study is crucial to set the stage to intensify a more robust and quicker public health and economic recovery. 

It is crucial the government re-assess comprehensively the overall labour situation especially in  the light of job losses due to the Covid-19 pandemic. Malaysians are struggling to survive and the youth are getting more marginalised and  restless. 

Not only has the government suspended parliament, it is also not acting in a pro-active and  responsible manner in addressing the current labour situation. – March 14, 2021.

* Raja Kamarul Bahrin Shah is a senator and the Terengganu Amanah chairman.

* 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.