The Malaysian palm oil industry is losing up to RM20 billion by the end of the year, as a result of thousands of tonnes of fruits left to rot as the third year of a worker shortage of 120,000 foreign workers have left companies unable to increase their harvesting during the peak production season. The Malaysian Palm Oil Association’s (MPOA) estimates only 47,000 foreign workers have entered Malaysia or 12% out of 385,000 approvals since January 2022 for migrant workers granted to companies across all industry sectors.
Migrants, mainly from Indonesia and Bangladesh, make up around 80% of the workforce in Malaysian estates. As a result, palm oil output in Malaysia, the world’s second-largest producer, is forecast to decline from last year’s 18.1 million tonnes at a time when production should be ramped up, a terrible cost of the failure of the current government.
Human Resources Minister S.Saravanan had last month promised that the earlier applications to hire some 400,000 foreign workers will proceed before the end August. However, the 12% success rate of foreign workers arriving here, symbolises Saravanan’s broken promises that will hinder efforts by all industries to overcome the 1.2 million worker shortage. Further, Malaysia’s E&E sector needs at least 30,000 workers urgently and are facing unspecified mounting losses.
The severe worker shortage has incurred losses of RM33.5 billion to the plantation sector, glove and auto spare parts industry alone. Other industries will also record losses of tens of billions of ringgit. When are the hundreds of thousand foreign workers promised coming into the country? Such an egregious blunder will adversely impact the investment climate in the country.
Malaysian Muslim Restaurant Owners Association (Presma) claims that 1,500 Indian-Muslim restaurants or “mamak” restaurants, are expected to close nationwide following the shortage of 30,000 workers. This could only be filled by of foreign workers due to the difficulty in sourcing local workers. Three thousand mamak restaurants have already closed.
Malaysia’s efforts to generate higher economic growth will be jeopardized if such a simple matter of documentation and processing of foreign labour recruitment cannot be resolved. With only a 12% success rate of foreign workers entering Malaysia against approvals, S. Saravanan has failed and failed miserably. A new Minister must take over and set things right.
A new Minister is needed to help and not harm businesses by cutting the red tape surrounding the many applications, implement an efficient processing system for a quick turnaround on the huge backlog of applications, and adopt decentralisation to the respective states via a One Stop Centre approach. Otherwise, the unconscionable delay in the recruitment of migrant labour will force some businesses to go under and it is preferable for the Minister concerned to go instead of letting businesses go down.