Freeze On Foreign Workers’ Intake Will Impact Projects

Putrajaya’s suspension of foreign workers’ intake will exacerbate the shortage of manpower problem in the construction industry, which will cause delays in project completion, warned the Master Builders Association Malaysia (MBAM).

MBAM, the umbrella organisation that represents the Malaysian construction industry, estimated that the industry needs at least 1.995 million on-site foreign workers by 2020, up a whopping 823,000 or 70.2% from 1.172 million last year.

In a country with a population of 31 million and an unemployment rate of about 3%, Malaysia’s construction industry needs foreign workers supplies to fill the manpower gap, especially since locals are not keen on working in the construction industry, said MBAM president Matthew Tee.

“There should be a realistic understanding that our industry needs foreign workers. We employ them because even if the unemployment rate somehow managed to reach 0%, meaning everyone in the local labour force is employed, there will still be demand-supply gap for manpower in the construction industry,” Tee told The Edge Financial Daily in a recent interview.

Tee opined that if the government insists on suspending the recruitment of foreign workers, the construction industry will be hit, as builders will face difficulty in filling the demand-supply gap. Eventually, delivery time and cost of many projects will be affected.

“For now, contractors can still deliver existing projects with the available manpower. But in the medium-to long-term, when all new mega projects, be it MRT2, LRT3, KL118 or Kedah’s Rubber City, are launched and implemented in full, we will still find it difficult to source for labour if the decision to suspend the intake of foreign workers is not reversed,” he stressed.

Tee’s statements came following the announcement on Feb 19 by Home Minister Datuk Seri Dr Ahmad Zahid Hamidi that the government had decided to suspend the recruitment of all foreign workers to Malaysia.

Urging employers to recruit local workers, Ahmad Zahid had said the freeze would allow the government to review the two-tier levy system for foreign workers, while existing illegal workers in Malaysia would be detained and deported.

The freeze came after some non-governmental organisations protested a reported intake of 1.5 million workers from Bangladesh over the next three years, which the government earlier said was to meet demands of industries.

Human Resources Minister Datuk Seri Richard Riot Jaem had clarified that the agreement inked with Bangladesh’s government would allow 1.5 million Bangladeshis registered to seek work overseas to find jobs in Malaysia — that it didn’t mean all 1.5 million of them will make their way to Malaysia.

Meanwhile, MBAM hopes to meet with Ahmad Zahid to voice the association’s concern about the sudden ban, and to offer some solutions. In MBAM’s estimation, 36% of construction workers are illegal foreign workers, 19% are legal, while the remaining 45% are locals.

“To be honest, we are caught in a dilemma. We use our resources to train these foreign workers and some of them are highly productive, so why send them back?”

“If more locals are interested to join the industry, and the process of getting legal foreign workers can be made more efficient, I believe the issue of illegal foreign workers can be significantly minimised,” said Tee.

Tee reiterated that MBAM supports the government’s effort to bring in more foreign workers, but opined that the country shouldn’t over-rely on one single source country — in this case Bangladesh — adding that the rehiring process should be made as efficient as possible.

“It should not be too much of a burden for employers and their workers in terms of time and money,” he said, adding that some contractors may resort to employing illegals to complete their projects on time and within budget.

As to the hike in foreign worker levy — originally meant to take place in February, but has since been deferred pending discussions with businesses after strong opposition to the move — Tee said the hike should be rescinded, as the new rates are not reflective of the current economic situation.

“Employers are already feeling the pinch from the weakening ringgit, implementation of goods and services tax, and the minimum wage policy. We think the 100% increase in levy [for construction sector] is just too much,” he said.

News Source: The Edge