Written by Dr. Lim Teck GheeTuesday, 04 August 2009 12:14
Commentary by Dr Lim Teck Ghee
There is hardly a day that passes when we do not read something about foreign labour in the newspapers.
The story could be about a heartless employer pouring boiling water on an Indonesian maid or labour contractors exploiting a Bangladeshi worker. Or it could be a Minister stating that he received an appeal from the MNCs for the Government to relax its policy on the importation of foreign labour. There just seems to be no shortage of news about this little understood segment of our Malaysian economy.
We should not be surprised at the increasing frequency of snippets of news on foreign labour. That's because foreign workers have steadily increased in number over the past two decades so that today they are a key part of the economy. However, for various reasons, the Government and the employers – both small and big – have tended to down play the importance of foreign labour in the country’s development.
Just recently, I was reading again through the Ninth Malaysia Plan. This document is the Government’s blueprint for national development for the period 2006-2010.
There is very little mention or analysis of 'foreign labour' in this economic bible of the Government. A quick check of the index shows only two references in a volume of almost 560 pages. One is a statement that foreigners with work permits increased to 1.7 million in 2005, with the manufacturing sector as the largest employer accounting for 31%. (9th Malaysia Plan, p.240)
Given our estimated national workforce was about 10.9 million in that year, this means that officially sanctioned foreign workers accounted for 15% of the total workforce, according to the official statistics. They come from over 15 countries with the largest number from Indonesia (1.2 million as of 2006). Other sending countries include India, Sri Lanka, Bangladesh, Pakistan, Burma, Thailand, Vietnam, Timor Leste and the Philippines.
But can the official statistics be believed?
Actual number of foreign workers
In fact the foreign component of the Malaysian workforce is a lot larger – in fact, very, very much larger. According to government’s own estimates, there is an equivalent number of unregistered or undocumented migrant labour in the country.
Another estimate was provided by Syed Shahir, president of the MTUC when he spoke at an international meeting on migrant workers. [Speech at MTUC/ILO Follow Up Workshop on Migrant Workers in Malaysia, December, 4-6 2006.]
His estimate is supported by the fact that official entry-exit immigration records in 2004 showed that there were 5,852,997 persons who overstayed after entering the country. This figure – if true today – means that four in every 10 visitors to the country is overstaying, with a very large proportion probably entering the informal labour market.
Hence a realistic estimate of the number of foreign workers in the country would be anywhere between 3.5 and over 7 million. If the higher number is taken into account, it means that a staggering two in every three workers in the country could be a foreign worker.
Policy towards foreign labour
So what should our policy be towards foreign labour? According to the Ninth Malaysia Plan, “the number of foreign workers will be reduced gradually to provide greater employment opportunities to local workers and to reduce administrative costs as well as the outflow of foreign exchange.???
The Plan, however, provides no strategy on how this is to be achieved. All it suggests is that "local labour, particularly graduates, will have to change their mindset so as not to be too choosy in selecting occupations.??? (p.250). In other words, the Government really has no idea on how to reduce the country’s dependence on foreign labour. Hence it has opted for a hands-off policy for fear of disrupting the...