Page 49 - BPAReport

CHAPTER 5: RECOMMENDATIONS FOR REVAMPING THE FOREIGN
WORKERS MANAGEMENT SYSTEM

1. Independent Committee members believe that in general the presence of foreign
workers brings economic benefits for the continued and sustained growth and development of
Malaysia. We are aware that the many studies commissioned by the government on the
contribution and impact of foreign workers in the economy show that skilled and semi-skilled
Malaysian workers benefit from their presence. In contrast, low skilled Malaysian citizens
bear the brunt of the negative labour market impact from the presence of foreign workers as
reflected in low wage levels and competition for jobs within this low skilled segment of the
workforce.

2. The presence of unskilled foreign workers also allows Malaysians to invest in their
education to secure the qualifications needed to be employed in relatively higher skills
occupations to drive the high income economic aspirations of the nation. Given the
importance of the presence of foreign workers for economic growth, policy reforms should
not hinder their deployment but should be more responsive to the needs of industry.

3. The Independent Committee members are confident that our policy recommendations
set forth here, if implemented comprehensively, will successfully support the government’s
intention to effectively manage the admission of foreign workers while reducing the
dependence on them, in the longer term, without harming the economic growth objectives
and the well-being of its citizens. In parallel, the Independent Committee would emphasize
the need to develop a “real time” database to properly monitor the need for foreign workers
and to create a conducive environment for the deployment of the foreign workers which
meets national employment regulations and international labour standards.

5.1 Overall policy recommendations

4. It is clear from the foregoing discussions that the foreign worker management system
is in disarray mainly because of the absence of a single government entity charged with
implementing a coherent set of policies within a strategic framework for the management of
foreign workers. The main objectives of this strategic framework should principally be to
support the economic growth targets of the country which would be underpinned in part by
the labour requirements of industry, including the continued recourse to foreign workers to
achieve the product and services output of the economy. This paradigm is consistent with
Malaysia’s historical experience as described in Chapter 2 above. A subsidiary objective
would be to better manage the dependence on foreign workers as the economy transforms
itself and prepares for the onset of Industry 4.0, greater automation and use of artificial
intelligence towards an innovative knowledge based high income country. Whether the future
situation would entail a reduction in the deployment of foreign workers will very much
depend on other development policy exigencies underlying the government’s long-term
growth strategy consistent with the demographic trend of the country.

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