Malaysia U-turns on foreign recruitment

Shiva Temple, Puthia, Rajshahi, Bangladesh. Bangladesh has a rich supply of labour. Source: Flickr

Malaysia said it was freezing recruitment of all foreign workers and reviewing its employment policies in response to protests over its plans to bring in millions of foreigners to satisfy industry demand.

“The suspension will be in force until the government is satisfied with the manpower needs of the industries,” Deputy Prime Minister Ahmad Zahid Hamidi announced.

Malaysian labour groups protested against reports that Kuala Lumpur planned to hire about 1.5 million Bangladeshis over three years to answer industrial demands for employees.

At least one manufacturers’ group said another massive influx of workers would exacerbate the problem of undocumented foreign labour. The policy also diverged from a plan to reduce reliance on overseas workers, it was claimed.

Human Resources Minister Richard Riot Jaem subsequently claimed the deal with Bangladesh would allow 1.5 million potential employees to seek work in Malaysia but did not mean they would all be employed.

Ahmad Zahid also promised a clampdown on illegal workers. Indonesians make up the bulk of overseas workers, followed by Nepal, Bangladesh and India, he said.

“Foreign workers without valid documents or those who have overstayed will be arrested and sent back to their country of origin,” he said.

About 2.1 million documented foreign workers are in the federation, below its self-imposed cap of 15 per cent of foreigners among a total workforce of about 15.3 million.

Malaysian manufacturers on Friday urged the government for more clarity on the sudden freeze on foreign worker recruitment.

“It is unclear to manufacturers how long the suspension would take effect,” the Federation of Malaysian Manufacturers (FMM) announced. “FMM hopes that the issues of levy and recruitment of foreign workers can be resolved expediently to avoid any deleterious effect on our economy.”

In December the World Bank said Kuala Lumpur should look at labour market demands more closely when determining foreign worker inflows, as its current approval system did not sufficiently reflect the needs of industries. It advised the government to improve its existing evidence-based system for identifying labour shortages and alter its levy structure to one that could keep up with varying market conditions.

Earlier this month, the government agreed to defer a plan to double foreign worker levies pending discussions with businesses there was opposition to the sudden decision. Prime Minister Najib Razak has said it was trying reduce dependence on cheap, foreign labour while seeking to replace lost revenues because of the declining oil price.

Najib said the government needed to answer concerns over the social fallout and tensions created by an influx of workers.