Tuesday 1 September 2009
Foreign Employees Limited, Malaysia Is Suffering Through a Labour Shortage
Unable to find Malaysians willing to work as cooks, waiters or dishwashers, he is awaiting approval to employ more foreigners. But if he cannot get more workers soon, he says, he might close one of his outlets. Mr. Muneandy, an 18-year veteran of the industry, is even considering other business ventures.
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Foreign Employees Limited, Malaysia Is Suffering Through a Labour Shortage
By LIZ GOOCH
01 September 2009
KUALA LUMPUR, Malaysia — It is lunchtime at the Wangsa Ukay restaurant in suburban Kuala Lumpur, and regulars are coming in for local favourites like roti canai, chicken curry and teh tarik, the sweet, milky drink that is ubiquitous across Malaysia.
The owner, Muneandy Nalepan, has time to stop and talk for now, but when peak times hit on weekends, he and his wife must pitch in to help clear tables.
He used to have a staff of 120 — almost all foreigners — working in his five restaurants across the city. But after the government made it more difficult for businesses to hire workers from abroad, he is down to 80 because he has been unable to replace the 40 employees who had to return home after the maximum work period of five years.
Unable to find Malaysians willing to work as cooks, waiters or dishwashers, he is awaiting approval to employ more foreigners. But if he cannot get more workers soon, he says, he might close one of his outlets. Mr. Muneandy, an 18-year veteran of the industry, is even considering other business ventures.
“To run a restaurant, it’s becoming impossible,” he said.
It is not just restaurant owners who are complaining. Many business owners, like furniture producers and rubber glove manufacturers, say a labour shortage is harming productivity.
In January, Malaysia sharply curtailed the hiring of new foreign workers in the manufacturing and service sectors after a government report predicted that 45,000 people could be laid off during the Lunar New Year at the end of that month, The New Straits Times reported.
“There is no valid reason to bring in foreign workers at this time,” Syed Hamid Albar, the home minister, told the paper.
The action was backed by labour groups. The Malaysian Trades Union Congress proposed a freeze on the recruitment of foreign workers last October.
“Because of the global economic downturn, we were worried about the impact on jobs for Malaysians as well as foreigners,” said Rajasekaran Govindasamy, the group’s secretary general. “We don’t want workers to be brought in and abandoned, because that then causes hardship.”
In 2008, there were an estimated 2.2 million foreigners — mostly from Indonesia, Bangladesh, Nepal, India, Myanmar and Vietnam — working legally in Malaysia, a nation of 28 million. Some reports suggested the country was home to an additional one million illegal workers. By March this year, the number of foreigners with work permits had fallen to 1.9 million, according to Shamsuddin Bardan, executive director of the Malaysian Federation of Employers.
“About 300,000 permits were not renewed, and people were sent back,” he said.
Malaysia recorded 31,392 layoffs from January through July, and the country’s unemployment rate rose to 4 percent in the first quarter of this year, the latest period for which figures are available. That was up from 3.1 percent in the fourth quarter of last year.
The average monthly wage in the manufacturing industry has risen to 650 to 700 ringgit ($183 to $197) in the last three months, up from 450 ringgit, the national news agency Bernama reported in August.
Mr. Rajasekaran said foreign workers often accepted lower wages than Malaysians. The country has no minimum wage. Typically, foreigners are brought in by a business offering a job, he said, or by an outsourcing company that promises them work.
Mr. Shamsuddin said that companies could still apply to recruit foreigners but that the process had become more difficult.
For example, he said that since April 1, employers have had to advertise vacancies locally for two months, up from one month, before they could apply to recruit foreigners. And employers must now pay an annual levy — as much as 1,800 ringgit — for any new foreigners they employ, he said. The fee used to be paid by workers. Mr. Shamsuddin said the government abandoned plans to double the levy after the federation complained.
Dominant Semiconductor, a light bulb manufacturer with factories in Malaysia and China, is struggling to fill about 1,000 vacancies. Its chairman, Goh Nan Kioh, said the company was allowed to employ one foreigner for every local worker, but could not find enough Malaysians to help increase its total work force. If the labour shortage continued, he said, the company might consider moving more of its labour-intensive operations to China.
Mohamed Ariff, executive director of the Malaysian Institute of Economic Research, said the country’s dependence on foreign labour was a result of a decision to “open the floodgates” to migrant workers in the late 1980s, first in the plantation sector, then in manufacturing.
Mr. Ariff said that in the early 1990s, when wages in the manufacturing sector were rising, factories had considered introducing labour-saving technology but that many had shelved those plans when the government let them employ more foreign workers.
“The technology transfer suffered enormously,” he said. “Malaysia was trapped into an unskilled, labor-intensive economy.”
Figures released by the government last week showed that the economy had emerged from recession in the second quarter. Mr. Rajasekaran, the labour leader, said that although job losses were easing, the unions thought the freeze on foreign workers should continue. If there is a need for more workers in the coming months, he said, companies should be able to extend the visas of foreign workers already in the country.
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