Malaysia is one of Asia's biggest employers of foreign labour. But recently, cases of deaths, abuse and forced labour have come to light. What is going on? Who is protecting these migrant workers?
BY BOO SU-LYN
MIER executive director Dr Zakariah Abdul Rashid said the country’s small talent pool affected exports as well as foreign direct investment.
“Beyond 2010, the growth of exports of goods and services is expected to trend downwards due to ongoing structural weakness in Malaysia vis-a-vis regional competitors,” said Zakariah at MIER’s National Economic Outlook 2011-2012 conference today.
“One of the most important structural weaknesses above others is the labour market, (specifically) skilled labour. That is one of the impediments that affects FDI flows,” Zakariah told reporters later.
MIER has forecast a 5.2 per cent growth in 2011 from its forecast growth of 6.8 per cent this year, and predicted slower exports next year.
The institute has said that the global economy will slow down in the second half of the year given weaker global trade conditions and the ongoing sovereign debt problem in the Eurozone and that developing Asia will continue to lead global growth because of resilient domestic demand.
MIER predicted that the growth in exports of goods and services would hit 6.2 per cent next year, falling from a forecast growth of 11 per cent this year.
Zakariah also said Malaysia should focus on attracting FDI through operations that required skilled labour.
“Our policy now is to attract FDI through high-skilled intensive operations. We want to reduce low-skilled intensive operations,” said the MIER executive director.
FDI in the country plunged by 81 per cent last year, according to the United Nations’ World Investment Report.
Malaysia also dropped two spots in the World Economic Forum (WEF) competitiveness index at a ranking of 26 out of 132 countries this year.
Bank Negara said recently that the country’s economy grew just 5.3 per cent in the third quarter after a strong first half, attributing the 40 per cent dip from previous quarters to slowing external demand.
The economy had expanded by 10.1 per cent in the first quarter and 8.9 per cent in the second quarter. In terms of a quarter-on-quarter basis, the economy grew 2.4 per cent in the third quarter.
In October, Prime Minister Datuk Seri Najib Razak had announced in his Budget 2011 speech that a Talent Corporation will be set up early next year to arrest the country’s growing brain drain problem that is threatening his vision of turning Malaysia into a high-income nation by 2020.
About 700,000 Malaysians are currently living abroad, with half of them in Singapore, while the rest can be found mostly in Australia, Britain and the United States.
The number of Malaysian migrants rose by more than 100-fold in a 45-year period, from 9,576 Malaysians in 1960 to 1,489,168 Malaysians in 2005, according to the World Bank.
Recently, MIER has noted that its Business Conditions Index (BCI) fell sharply to 104.9 in the third quarter which it noted more than offset the surge in its Consumer Sentiment Index (CSI) to 115.8.
Key economic sectors like manufacturing, construction, services and mining, have also slowed in the third quarter of the year with the exception of agriculture.
“All economic sectors except agriculture experienced slower growth rates. Agriculture expanded by 2.7 per cent on account of higher output in industrial crops,” said Zakariah today.
“The manufacturing sector eased to 7.5 per cent (from 16 per cent in the first quarter) due to slower expansion in export-oriented industries (10.1 per cent),” he added.
“Weaker expansion across the entire services sector resulted in a growth rate of 5.4 per cent (from 7.3 per cent in the first quarter). The construction sector posted 2.8 per cent from 4.2 per cent in the first quarter. Weaker production of crude oil caused the mining sector to contract 1.1 per cent,” said Zakariah.
The MIER executive director also projected the strengthening of the ringgit against the US dollar to 3.10 next year.
“We expect the ringgit to hover around 3.20 at the end of this year and 3.10 next year, at least until the first half,” Zakariah told reporters.
Source: The Malaysian Insider
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