Is Malaysia in the Hunt for Talent?

The government’s recent decision to roll out a premium visa programme (PVIP) is aimed at attracting the rich into the country with the hope that they will spend and invest here.

The idea is not new. Portugal, for example, launched its “golden visa” programme some 10 years ago, and currently rates as one of the more successful destinations for such a programme. It has garnered around 27,000 successful applications since launching the programme. Other countries like Thailand and Singapore are also in the game.

Malaysia needs talent. There is a severe shortage of skilled labour in Malaysia today. Penang, the hub of the country’s semiconductor sector, suffers from a severe shortage of engineers. The Small and Medium Enterprises Association (Samenta) says that the northern state is short of 50,000 engineers and technicians.

Over the last eight months, persistent skilled worker shortage may have caused the manufacturing sector to lose out about RM50bil worth of business opportunities. That’s according to the president of FMM.

A quick look at the comparison between Malaysia’s PVIP and programmes by Singapore and Portugal (see table) shows two key points. One is that while Malaysia’s programme only offers residence visas, the other two countries offer PR and even citizenship.

Secondly, the participation fees for PVIP is way higher compared with the fees for Singapore’s Global Investor Programme or GIP or even Portugal’s Golden Visa Programme or GVP as shown in the table.

Under Singapore’s skilled labour pass, also known as S Pass, designed specifically for working mid-level skilled workers with a minimum salary of S$2,200 (RM7,056), Singapore offers permanent residence (PR) status after four years of job stability.

The idea of obtaining a PR status is definitely a key factor for skilled workers as to why they opt for Singapore. In Singapore, though, there are controls put in place to ensure that not too many foreigners are employed. For example, the number of S Pass holders in service industry businesses is limited to 15% of the total staff. In other industries, the limit stands at 20%. Interestingly, employers in Singapore are also required to purchase medical insurance for S Pass holders.

Part of the problem of the shortage of skilled manpower in Malaysia lies with the shortcomings in the education system. The FMM acknowledges the need for greater student participation in the fields of science, technology, engineering and mathematics or STEM. Current enrolment is only 40% from STEM, causing the supply of skilled labour to be insufficient for the country. The need for more graduates from STEM extends to almost all sectors in support of automation activities.

The quantum of skilled workers also plays an important role in the country achieving its ambition to be a developed nation, i.e. 45% of the workforce to be skilled by 2030. But are we serious? Because we keep attracting the low-skilled, low-pay labour force. And several ministries are involved in this recruitment with lucrative “arrangements”. So, in one sense we have lost even before we have begun!

Reference:

The hunt for talent, Kirennesh Nair, The Star, 10 Sept 2022