REFERRING to Human Resources Minister M. Kulasegaran’s recent statement that the government plans to stop foreigners from working in jobs with salaries below RM10,000 and that there were 117,000 expatriates working in Malaysia in 2017, I would like to highlight a few issues.
The government should differentiate between expatriates and the general foreign workers. This is because expatriates bring benefits to the economy through their skills, experience, income tax contribution and spending through house or room rentals, and purchase of cars, food and beverages.
From the numbers stated, expatriates form only 2.1% of the labour force. Compared to the number of foreign general workers in Malaysia, expatriates form less than 5% of the total number.
There are valid reasons behind why there are currently three categories of employment passes. Category 3 (earning less than RM5,000) is for those with specific technical and language skills that are not available locally. If we want to promote our country to foreign investors for aspects like call centres and regional technical hubs, this category is necessary.
Many countries, even developed ones, have this category of skilled workers. Instead of abolishing it, there should be more stringent controls for approval for Category 3.
Category 2 is for technical and mid-management jobs while Category 1 is for top management and senior technical jobs.
Saying that the categories below RM10,000 will be abolished may drive away many investors as there is no way every expatriate that a company employs should be paid more than RM10,000.
The minister instead should address the many issues of foreign workers who are running various kinds of businesses in Malaysia without the necessary work permits and approvals. There are many foreign workers who are contractors and sub-contractors and are earning lucrative incomes.
These foreign workers have infiltrated almost all types of small, medium and big businesses. Since they have little or no overhead costs, they can compete with the locals on prices and are slowly taking over businesses that are supposed to be run by locals.
Many of these general workers are running businesses that are owned by locals in name only. Even this has to be looked into by the local authorities. Many of these workers have permits as plantation or garden workers or permits not related to the business they are running.
There are many more important issues to look at rather than this issue on expatriates that will only result in scaring away much needed foreign investment.