MALAYSIANS enjoy a lot of public holidays every year. The travel and tourism industry welcomes the frequent holidays because people tend to travel at such times. And when they travel, they spend at hotels and restaurants.
Local travel makes the domestic tourism sector more vibrant and, together with the increasing number of international tourist arrivals, leads to a high level of consumer spending that brings economic benefits.
But there is also the downside when there are too many public holidays. It is said that Malaysia has the most number of public holidays in the world. This is not exactly a proud achievement because there is also a burden to the economy when businesses have to spend more on labour costs.
Companies have to pay their employees three or four times more than the daily wage rate when they work on public holidays. Some unscrupulous employers resort to using undocumented foreign workers and exploiting them to avoid paying the regulatory multiplying factor in holiday wage rates.
Business associations have often complained about the excessive number of public holidays, especially when they are unscheduled. Many companies have to meet tight delivery orders set by their foreign customers who do not care that there is a public holiday in our country.
With the stiff competition from the emerging industrial economies in this region, our manufacturers have no choice but to keep their plants operating on a public holiday even at the cost of sacrificing their profit margin in paying the overtime wage rates.
They can tolerate it if it’s an exceptional case, but when the public holidays happen too often and, worse, if they are required to compulsorily shut down their operations on those days, they begin to ask whether it’s better to move their plants to another country.
Malaysia is already a high-cost country for basic manufacturing because we are short of labour. The frequent public holidays make it more difficult for the country to compete in low-cost production.
The government should do away with the minor public holidays or at least not grant a weekday as a public holiday when it falls on the weekend. Employees and government servants can apply for leave if they want a longer break to go back to their hometowns to celebrate with their families and loved ones. There is no reason why the whole country or the whole state should be locked down for the sake of being popular and politically correct to an ethnic community, whether Muslim or non-Muslim.
Malaysia must think global if we want to join the ranks of developed countries. We should note that one country in Europe that was noted for its addiction to the holiday culture became insolvent and had to be bailed out by international institutions.
They agreed to help but with strict conditions that in addition to the structural economic, fiscal and institutional reforms to remove the rigidity and obstacles in the economy, the debtor country also had to stop disrupting the labour market with wasteful holiday benefits.
The government should not be so politically indulgent in giving too many public holidays because this extravagant practice may one day become a big issue in economic management like it did in some countries.
TAN SRI MOHD SHERIFF MOHD KASSIM
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