PETALING JAYA: The Human Resources Ministry has commissioned a study to ascertain the socio-economic impact of international internship programmes and the employment of a large pool of low-skilled foreign workers in Malaysia.
Noting there are 1.9mil low-skilled foreign workers in the country, the ministry said the study would encompass employment, job creation, wages, productivity and automation. It would also cover health, crime, education and public facilities.
The comprehensive study is aimed at identifying and verifying the socio-economic impact arising from this sort of employment, the ministry said in a statement.
The ministry's labour market arm, the Institute of Labour Market Information and Analysis (ILMIA) will undertake the study which is expected to be completed by February 2020.
Recommendations and plans of action would then be formulated to address the issues, challenges, limitations and prevailing weaknesses identified, it said.
The ministry would also obtain feedback from various stakeholders via group discussions, workshops and town-hall sessions.
"The ministry will periodically update the various stakeholders on the progress," it said, adding that it was aware of the mounting criticism against the government over its apparent failure to reduce the number of low-skilled foreign workers.
"Some of this resentment is justified, but some are due to misconceptions over the present government’s stand and preferred approach.
"For the record, as of May 31,2019, there were 1,927,486 low skilled foreign workers in Malaysia.
"The majority of these workers are employed in the manufacturing sector (34.7%), construction sector (23.4%), services (16.4) plantation (14.6%) and agriculture (8.3%), with Indonesia (35%) and Bangladesh (28%) being the biggest source countries.
"The issue is further compounded by substantial number of illegal foreign workers," it said.
The ministry noted that the foreign workers were brought in on short-term basis in the 1970s and 1980s to meet the demand, in view of rapid industrialisation.
However, the demand for foreign workers continued to remain steady due to the demand for cheap labour and difficulty in recruiting locals in the construction, plantation and certain manufacturing industries.
"In terms of economic impact, the ministry is aware of the concerns raised by several quarters that this situation will adversely affect the much sought after structural transformation of the Malaysian economy, as it would further delay aim to achieve the status of high-income nation," it said.
Many claimed the continued reliance on low-skilled work force would hamper initiative to promote automation.
"However, there is a lack of evidence-based studies to verify such claims," it said.
The ministry also noted that there was a lack of published data on the number of international students undergoing their practical internship in Malaysian firms and their impact on the economic and socio-economic environment.
"Some claim that such internship programmes do potentially impact the labour market, in terms of employment and wage rates in selected industries.
"Others claim that the high number of international interns undergoing practical training here will deprive Malaysian students of such opportunities.
"The economic implications of the high reliance on foreign workers has been adequately researched and documented, but there has not been much studies on the socio-economic implications, particularly in terms of its impact on reduced employment opportunities, wage suppression, particularly for employees with resemble skills such as those within Masco (Malaysian Standard Classification of Occupations) Group 9, and on labour productivity," the Ministry said.
"The ministry hopes that this study will pave the way for a more orderly and mutually beneficial management of low skilled foreign workers and international interns," it said.
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