Economist proposes old strategy to meet labour shortage
While Malaysia struggles to get more migrant workers, oil palm fruits are rotting away in the plantations.
PETALING JAYA: As the labour crunch continues to worsen, an economist has urged the government to revisit an old strategy to solve the problem.
Socio-Economic Research Centre executive director Lee Heng Guie said the Manpower and Labour Recalibration Programme could be the way to get more workers into plantations and other sectors.
The programme was introduced in November 2020 to enable migrant workers who had entered the country to work without permits to have their status validated. The onus was on their employers to start the process.
The programme was to have been terminated on June 30 last year but was extended twice before it was finally stopped on June 30, 2022.
As of November last year, more than 280,000 illegal migrants had registered for the programme. Of those, 120,000 were from the plantations sector.
“Renewing the programme could help the country ease the labour shortage for now,” Lee told FMT Business.
The decision by Indonesia to stop sending their nationals to work in Malaysia came after a dispute over the recruiting of domestic maids from the archipelago.
The labour crunch threatened to take a turn for the worse this week when Bangladesh also announced that it was also not having its citizens come to Malaysia to work.
The kinks have since been ironed out and about 2,000 Bangladeshis are expected to arrive soon to start work in Malaysia.
However, the tiff with Jakarta does not seem likely to be resolved soon and stakeholders and economists fear it could crush the plantation sector where Indonesians make up a large proportion of workers.
According to a recent estimate by Reuters, the plantations sector is still short of 120,000 workers.
Lee said the ball is now in the government’s court. “This is a problem that has to be solved quickly, more so now that we are also in an environment of rising costs,” he said.
Bank Islam Malaysia chief economist Afzanizam Abdul Rashid said the failure to meet the demand for workers would put the brakes on Malaysia’s economic growth.
This is more so considering that the plantations sector, particularly palm oil, contributes up to 5% of the country’s gross domestic product (GDP).
As of now, up to three million tonnes of palm oil crops remain unpicked and will subsequently rot if not harvested soon.
“This is a serious issue. We have facts and figures to back that up,” Afzanizam told FMT Business.
He pointed out that while Malaysia could source for workers from other countries, it would require “a bit of time to conclude” a viable agreement.
Just this week, home minister Hamzah Zainudin said Malaysia could look to other countries as a source of labour if Indonesia does not lift the freeze on sending its people to work here.
“The urgency now is to fix the current bottleneck, and that means resolving the problem with Indonesia as soon as possible,” Afzanizam said.
Centre for Market Education CEO Carmelo Ferlito pointed out that businesses would suffer if Malaysia is not able to meet the demand for labour soon. “And when businesses suffer, so will consumers,” he told FMT Business.
He said the shortage of labour would cause some businesses to lose their competitive edge, push the cost of goods and services up or lead to them shutting down.
Human resources minister M Saravanan has not responded to queries from FMT Business.
Malaysia is now short of about 1.2 million workers. Apart from the 120,000 for the plantation sector, the manufacturing sector needs another 600,000 workers and the construction sector is short of 550,000 workers.
Among the businesses that are feeling the worst of the labour crunch are chipmakers, which need up to 15,000 workers and manufacturers of medical gloves, which are still short of 12,000 workers.
PETALING JAYA: As the labour crunch continues to worsen, an economist has urged the government to revisit an old strategy to solve the problem.
Socio-Economic Research Centre executive director Lee Heng Guie said the Manpower and Labour Recalibration Programme could be the way to get more workers into plantations and other sectors.
The programme was introduced in November 2020 to enable migrant workers who had entered the country to work without permits to have their status validated. The onus was on their employers to start the process.
The programme was to have been terminated on June 30 last year but was extended twice before it was finally stopped on June 30, 2022.
As of November last year, more than 280,000 illegal migrants had registered for the programme. Of those, 120,000 were from the plantations sector.
“Renewing the programme could help the country ease the labour shortage for now,” Lee told FMT Business.
The decision by Indonesia to stop sending their nationals to work in Malaysia came after a dispute over the recruiting of domestic maids from the archipelago.
The labour crunch threatened to take a turn for the worse this week when Bangladesh also announced that it was also not having its citizens come to Malaysia to work.
The kinks have since been ironed out and about 2,000 Bangladeshis are expected to arrive soon to start work in Malaysia.
However, the tiff with Jakarta does not seem likely to be resolved soon and stakeholders and economists fear it could crush the plantation sector where Indonesians make up a large proportion of workers.
According to a recent estimate by Reuters, the plantations sector is still short of 120,000 workers.
Lee said the ball is now in the government’s court. “This is a problem that has to be solved quickly, more so now that we are also in an environment of rising costs,” he said.
Bank Islam Malaysia chief economist Afzanizam Abdul Rashid said the failure to meet the demand for workers would put the brakes on Malaysia’s economic growth.
This is more so considering that the plantations sector, particularly palm oil, contributes up to 5% of the country’s gross domestic product (GDP).
As of now, up to three million tonnes of palm oil crops remain unpicked and will subsequently rot if not harvested soon.
“This is a serious issue. We have facts and figures to back that up,” Afzanizam told FMT Business.
He pointed out that while Malaysia could source for workers from other countries, it would require “a bit of time to conclude” a viable agreement.
Just this week, home minister Hamzah Zainudin said Malaysia could look to other countries as a source of labour if Indonesia does not lift the freeze on sending its people to work here.
“The urgency now is to fix the current bottleneck, and that means resolving the problem with Indonesia as soon as possible,” Afzanizam said.
Centre for Market Education CEO Carmelo Ferlito pointed out that businesses would suffer if Malaysia is not able to meet the demand for labour soon. “And when businesses suffer, so will consumers,” he told FMT Business.
He said the shortage of labour would cause some businesses to lose their competitive edge, push the cost of goods and services up or lead to them shutting down.
Human resources minister M Saravanan has not responded to queries from FMT Business.
Malaysia is now short of about 1.2 million workers. Apart from the 120,000 for the plantation sector, the manufacturing sector needs another 600,000 workers and the construction sector is short of 550,000 workers.
Among the businesses that are feeling the worst of the labour crunch are chipmakers, which need up to 15,000 workers and manufacturers of medical gloves, which are still short of 12,000 workers.
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