Labouring over foreign labour

  • Business
  • Sunday, 15 May 2005


TODAY, Malaysia is one of Asia’s largest importers of foreign labour (, April 10 2005). According to, out of a workforce of 10.5 million, foreign workers total 2.6 million. 

From these figures, the number of illegal foreign workers differs, broadly ranging from a conservative 400,000 to a whopping 850,000 – or even a million before the latest amnesty programme (, April 10 2005 and, April 4 2005). 

The original sin, so to speak, is supposedly traced back to the reluctance of locals to take up what is known as the 3D jobs – “dangerous, dirty and demeaning” – a trilogy of terms which appeared in a speech by the Human Resources Ministry on Aug 21, 2004. 

Syed Shahir Syed Mohamud, president of the Malaysian Trade Union Congress (MTUC), made an important statement on April 2, 2005 when he said that “lack of job security is the main reason why Malaysians choose not to work at construction sites and restaurants.” 

So where have all the Malaysian workers in these and other service industries gone? 

Thousands of Malaysians have sought greener pastures in Singapore and the Middle East where wages are much more attractive. But even larger numbers remain at home and prefer to remain unemployed or under-employed.  

Other major causes for the low employment rates among the locals are, as the MTUC president rightly pointed out, low salaries and poor conditions of work.  

Why should these locals toil for RM300 a month when they can work elsewhere or just stay at home in the extended family system that still prevails in our society? 

Compounding the problem is the convenience of hiring foreign labour, the undue pressure from many of our labour intensive industries, and from many local employers who wish to cut costs by using lower cost foreign labour, instead of paying our own workers more decent wages. 

There’s something about foreign workers 

Migration News cited a remark by Universiti Malaya anthropologist Azizah Kasim that the ready availability of foreign workers has made it hard for trade unions to increase wages and improve work conditions, a stance that concurs with that of the MTUC president. 

As such, the huge vacuum in the local labour force has easily opened the floodgates to illegal workers, thus aggravating problems such as exploitation and abuse, giving rise to litigation and disillusionment as well as complicating inter-country relations.  

Furthermore, a situation of populous foreign workers, both legal and illegal, could lead to a strain on our social services like health, education, housing and water. 

These contribute to problems that degrade our environment, undermine our safety and security, and erode other vital aspects of our quality of life. 

Concerns about security threats have also been expressed in a Sin Chew Daily editorial on March 9, 2005, which lamented Malaysia’s over-dependence on foreign labour, notably in the construction sector where 70% of manpower is foreign. 

The editorial also noted the involvement of some foreign workers in local criminal activities.  

So the myriad of problems associated with foreign workers, legal or illegal, and the underlying causes need to be addressed urgently. 

Government’s role 

A labour problem of such proportion is not merely an issue of the community’s preference for foreign labour. 

It entails macro management of HR issues at a national and possibly even international level. This stretches from managing stakeholder expectations to delivering value for the nation, from establishing sound long-term policies to implementing and monitoring them, from managing supply and demand to administrating workforce logistics, from matching employer requirements to balancing employee rights and satisfaction.  

Professor Machiko Watanabe of the Department of Economics at Meikai University, having noted our government’s frequent changes on the content of work permits, occupation/industry regulations and nationality regulations, observed that such “?regulation of foreign workers based on the government’s expectations will bring about an increase in illegal employment and have a strong negative impact on the society, resulting in higher costs for controlling the regulation.”  

This far-from-perfect labour situation must not continue indefinitely, not only because of the social and security implications but also from the economic standpoint. 

Indeed, the government should review its policy on imported labour before the Ninth Malaysia Plan (9MP) is introduced next year. 

New policies must be soon put into place to raise our wage levels, increase the technology and the productivity of our labour force and to substantially ease out the employment of foreign labour, in a pragmatic and well phased out manner. 

We have to study the implications of the huge repatriation of foreign exchange back to the countries of origin of our imported labour. 

We need to examine whether the resulting net gains are worth our loses on so many socio-economic fronts. 

If we are to lose our competitive export position and raise our domestic costs by having to pay higher wages to our own people – so be it. 

After all, it is also very important to raise the welfare of our own workers. 

Thus we have to give even higher priority to provide for much more technical training and scientific education at our schools and our public and private tertiary institutions. We need more blue-collared workers whose skills can replace sheer sweat labour. 

We would then also help to reduce the large output of unemployable graduates that could pose serious social problems in future.  

In any case, the present easy policy of importing foreign labour while expedient in the short term cannot be sustained by the economy in the longer term. 

Malaysia must move up higher on the value chain, a call that has been made by our own top leadership.  

There should therefore be Early Quartet Consultations among government, labour and business and civil societies to resolve these long-standing structural labour problems so as to enable Malaysia to become a developed nation by 2020. 

  • MIM notes: The views expressed in the article are those of the author and do not necessarily reflect the views of the Institute. Tan Sri Dato’ Dr Ramon V. Navaratnam is a Member of the Court and Council of Malaysian Institute of Management. 

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