An article in Starbiz, Saturday 17 July 2021 (Royce Tan) suggested that Malaysia has an addiction for cheap foreign labour. That road according to the author started in the 1980s. We were on the road to industrialisation then, hence the need for cheap foreign labour.
In a crisis, this gets amplified with many foreign workers forming the Covid clusters that weigh down the health system. Over 24% of all Covid cases are from the foreign labour force. The Malaysian Employers Federation (MEF) estimates that there are 1.38 million legal foreign workers in Malaysia as at end November 2020. The number of illegal foreign workers is estimated at three times the number of legal foreign workers. Over 5.5 million cheap foreign workers are therefore in Malaysia.
The issue is not about foreign labour. If there are enough jobs or Malaysians are not willing to do some of the more difficult, dirty or dangerous jobs then foreign labour force is helpful. To be fair, they add to Malaysia’s GDP even with remittance of funds to their home nations.
The
Executive Director of the Economic Action Council (EAC) calls for a serious need
to get rid of cheap foreign workers addiction. The 9th Malaysian
Plan recognised it but no one according to him looked at it! And without
realising, the numbers have increased. This is an epiphany moment! Perhaps, the
political masters could explain how the policy was formed and how they
conveniently had agencies to recruit them from Bangladesh, Myanmar,
Philippines, Indonesia and many other exotic places.
The nation wants to be advanced, to be high income, to embrace IR4.0 but these are laudable goals, but you need concrete steps to get there. We may never rid of all foreign labour. Countries in the West and some in the East, like Singapore, have foreign labour for the more rudimentary jobs.
In Malaysia, is there vested interest in perpetuating use of foreign labour? Will rent seekers accept change in the landscape? Is there a political will to change course? Then, are there industry groups who refuse to change?
To
change, it will take some effort, say a decade of consistent policy initiatives
and follow throughs. But how do we transform and where are these foreign labour
force? They are in several sectors:
- Construction
- Retail - coffee shops, barbers etc.
- Other services - ports, airports, maids, cleaning services, security etc.
We
need to use technology to change things. Take a coffee shop, do you need
waiters? The process can be automated. Orders and selection are through an
automated system. Delivery is by robots and payment is automated from the
table. The labour requirement is minimal. Try to do a model kopitiam for others
to view. Then reduce cost of system and robots by a subsidy – prices will drop
with more usage.
In the 1980s, typists/clerks used to rule the output in a bank. But with computers, secretaries, typists and clerks are gone if not reduced significantly.
In the oil palm sector, it is said that there is a shortage of 40,000 harvesters. About five million hectares out of six million hectares are mature for harvesting. The optimum ratio is one harvester to every 20 hectares, so the total requirement is 250,000 harvesters. Of this, 90% are Indonesians.
The Government has established The
Mechanisation and Automation Research Consortium of Oil Palm (Marcorp) recently
for the purpose. It has an allocation of RM60 million to entice tech providers
to find solutions for the industry. It is still work-in-progress and may take
another two years to see its first fruits. This is a laudable move, but funding
is too low for a sector that loses RM12 billion a year in revenue because of
shortage of workers.
Source: https://www.thestar.com.my
We could similarly do this (automation) for domestic help, construction, security and other services. What’s holding us back? Money or vested interest?
Reference:
Hitting the reset on labour, Royce Tan,
Starbizweek, 17 July 2021
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