There is an urgent need for the government to immediately resolve the acute labour shortage that has crippled production and caused businesses to reject new orders to help strengthen economic growth. A more robust growing economy will help to arrest the decline of the ringgit which depreciated to the lowest level ever against the Singapore dollar at RM3.22 today and a 5 year low against the US dollar at RM4.46.
A weak ringgit against two of our three biggest trading partners is an ominous sign of the investors’ lack of confidence in our country’s economic prospects. The immediate impact will be imported inflation, further increasing costs and prices both for businesses and consumers.
Presently there is limited fiscal space available to the government to overcome these bleak inflation and currency numbers. Therefore, the government should utilise its policy latitude to generate much needed economic growth by resolving the acute labour shortage with a stroke of a pen.
Can Saravanan Tell Us When Are Indonesian Workers Returning Back To Malaysia?
The Malaysian Automotive Component Parts Manufacturers Association (MACPMA) is the latest to state that labour shortages over the last two years have cost automotive parts manufacturers RM2 billion in exports yearly. MACPMA said a few days ago that the severe labour shortage is derailing the economic recovery of the motor auto parts industry which contributes 2% to Malaysia’s gross domestic product (GDP), causing stoppages and under-production as manufacturers are not able to produce at a higher capacity.
This RM2 billion losses by the motor auto parts industry come on top of the RM 31.5 billion in losses by the oil palm sector and glove industry which could have been overcome with a stroke of a pen by cutting through unnecessary red tape. Instead, the oil palm sector and glove industry are anticipating losses of at least RM21 billion. Malaysia’s oil palm sector has earlier lost an estimated RM10.5 billion worth of unpicked fruits in the first five months of this year due to the ongoing labour shortage.
The total RM31.5 billion in losses from the labour shortage, estimated at 1.2 million workers, excludes losses in the non-oil palm or glove industry, such as manufacturing, retail and hospitality, tourism and services sector, where total losses tabulated will amount to tens of billions of ringgit. Such wealth destruction could have been avoided if Cabinet Ministers had been more conscientious in carrying out their duties.
Indonesian ambassador to Malaysia Hermono had announced the temporary freeze of foreign workers from Indonesia to Malaysia, condemning Malaysia as a disgrace “for breaking its promises in the memorandum of understanding (MoU)” signed by Human Resources Minister S. Saravanan on Indonesian maids just three months ago. Even though Saravanan had announced that all matters were resolved with Indonesia, there is no confirmation from Hermono.
With such a severe trust deficit between both countries, can Saravanan tell Malaysians when will Indonesian workers be returning back to Malaysia?