Gloomy May Day for Malaysia

This May Day seems bleak for Malaysian workers and Malaysians in general.

By the end of last year, about 38,499 people were laid off in Malaysia. On its own the figure is already a major cause of concern, but compare this to the years before, we immediately feel the gravity of the situation: the 2015 retrenchment figure increased almost 50% more than that of 2014 and it is the highest in six years since 2010. (Source: Parliamentary answer from the Human Resources Minister to Member for Bukit Mertajam on 17 Mac 2016)

From that figure, the number of VSS in 2016 at 19,891 more than doubled the VSS in 2015 at 9,097 and it stood at the highest in eight years stretching back to 2008.

The Malaysian Employers Federation had indicated that there will be more job cuts in 2016. According to a report by the MEF, there are currently over 200,000 unemployed graduates in Malaysia, not including those with diplomas, certificates and SPM (Source: http://www.thesundaily.my/news/1693673).

MEF also projected that the situation for graduate unemployment will worsen in 2016 with only 40% of fresh graduates able to find employment down from 65% in 2015. (Source: http://www.thesundaily.my/news/1643227).

Human Resources Minister himself, who is also the Member of Parliament for Serian, Richard Riot, confessed this worsening unemployment warned that this trend will be extended into 2017. (Source: https://www.malaysiakini.com/news/327815)

To be fair this increase in unemployment is a global trend, especially in emerging economies where oil is an important export commodity. (Source: World Employment and Social Outlook Report, 2016 Trend, International Labour Organisation, pg. 9)

The global situation, however, is exasperated in Malaysia due to the crisis of confidence and credibility caused by various financial scandals in the Najib administration. An economist from the central bank’s academic institution, INCEIF, Emeritus Professor Dr. Mohamed Ariff had warned that “the crisis the country currently faces is largely home-grown. It smacks of poor governance and mismanagement. The ongoing financial scandals speak volumes…The economy is bogged down in a crisis of confidence and credibility.” (Source: http://www.theedgemarkets.com/my/article/cover-story-shringgit-dilemma).

The Conference of Rulers similiarly warned of such “crisis of confidence” (Source: http://www.themalaysianinsider.com/malaysia/article/malay-rulers-want-1mdb-issue-settled-soonest)

With the signing of the TPPA in February this year, SMEs in Malaysia have already warned that 30% of the Malaysian SMEs, which are important job providers, may be forced to close down. (Source: http://www.themalaysianinsider.com/malaysia/article/30-of-smes-risk-going-bust-post-tppa-says-industry-rep).

Without a good pro-job policy, the situation is worrying, especially when we scope down to consider jobs for young Malaysians, women and senior citizens.

No jobs for locals but there are jobs for migrant workers

As I have said above, some of the factors leading to the gloomy job market may be unavoidable. However, there is a general failure of human resources policy in our country.

One of the most glaring problems staring at us is the over-dependency on cheap migrant workers – including the shocking announcement by the government in 2015 that it planned to bring in 1.5 Bangladeshi workers in stages in three years beginning this year. That means, an additional 500,000 migrant workers a year on top of the current 2.0 million migrant workers in our country at this moment, excluding another 2-3 million unregistered migrant workers. All these are against the background of the highest retrenchment rate in the past six years and a gloomy job market in Malaysia.

I am not saying that Malaysia does not need migrant workers. Malaysia, in fact, must position itself to tap into the global human resources and talents, whether, skilled, low and semi-skilled workers.

However, what we are seeing today is the succumbing of good human resources policy, if any, to what I call, the “migrant workers industrial complex” driven no less by the federal government itself!

The lucrative business of importing migrant workers is a multi-billion ringgit industry, bringing annually upto RM3 billion for the government and another RM3 billion shared among a handful of crony companies. My detailed statement on this “migrant workers industrial complex” can be read here: http://dapmalaysia.org/en/statements/2016/02/16/22630/

As such, instead of importing of migrant workers to support local businesses, the government’s migrant workers industrial complex is itself a lucrative business, especially for its rent-seeking cronies.

Thus, if the government and its cronies are making billions of ringgit from this business, it make sense for them to keep on introducing policy to sustain the industry – new contractors, new intakes, new tariffs and new laws to milk the cash cow – whatever the effect will be on our society and economy.

“Junior” Human Resources Minister helpless against UMNO-cronies

At an average growth rate of 5.29% from 2011-2014, the Human Resources Ministry in 2015 projected the following demand for migrant workers upto 2020:

Table 1: Human Resources Ministry’s projection on the demand for migrant workers until 2020 (Source: http://pardocs.sinarproject.org/documents/2015-may-june-parliamentary-session/oral-questions/2015-05-21-parliamentary-replies/soalan-11.pdf/view)

Compare this, however, to the current number of migrant workers in the country, approved by the Home Ministry: 2.0 million.

How is it that without any substantial change in GDP growth rate for 2016, the Home Ministry’s intake of migrant workers exceeded an additional 160,000 persons from what was originally planned by the Human Resources Ministry just a year ago?

And even more curious, why does the Home Ministry want another 500,000 Bangladeshi workers to come each year for the next three years?

The question now before us is: Who is really in charge?

With this confusion of roles, not only the Human Resources Ministry has failed to achieve its target, the Home Ministry equally failed in its job to curb illegal immigration leading to 2-3 million undocumented migrants staying and working in our country today, many in deplorable conditions.

Why does this situation happen in the first place? Is it because the lucrative business of importing migrant workers is reserved for the “more senior” Home Minister instead of the Human Resources Minister who has to helplessly step aside to UMNO’s cronies?

Best May Day gift for workers this year

This May Day, it is clear that two things needed to be done immediately:

Firstly dismantle the migrant workers industrial complex. The government’s policy on migrant workers should be to support local businesses not to make a business out of migrant workers.

Secondly, to produce a thoroughly planned-out national human resource blueprint which maps out our own talents, recognises the needs of the industry, identifies gaps and then lays out a strategic plan to maximise our workforce, both Malaysians and migrant workers. It must also deal with the various issues in employment including the high unemployment and underemployment among young Malaysians, low women labour force participation rate, post-retirement workers as well as the strategy to best tap into the global talent pool.

These are really low-hanging fruits which can be done almost immediately if the government has the political will to empower and enrich workers in this country.

Happy May Day, workers of the world, unite!

In solidarity.