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PETALING JAYA: The Market Education Center (CME) warned today that new government procedures for hiring foreign workers may lead to a reduction in foreign direct investment (FDI) and less interest from multinational corporations (MNCs) .
Carmelo Ferlito, who is the director of CME, an academic and educational initiative of the Institute for Democracy and Economic Affairs, said that the justification for introducing such a policy may be good, but that it may instead backfire.
“Policymaking cannot be driven solely by good intentions, serious consideration of unintended negative consequences is imperative.
“While the measures aim to reduce unemployment among Malaysians, it has significant unintended consequences that may lead to reduced FDI and the presence of multinationals in Malaysia, thereby increasing unemployment, rather than reducing it,” Ferlito said in a statement. .
“(The procedures) apply not only to new positions but also to renewals of expat positions, making the future of foreigners in Malaysia increasingly uncertain, with the risk that Malaysia may not attract foreign talents “.
He responded to a statement by Human Resources Minister M Saravanan on Monday, where he said that as of November 1, employers who wish to hire foreign workers through a rehire program and apply to hire expatriates must first announce the vacancies in the national employment portal. MYFutureJobs.
Candidates will also be interviewed by representatives of employers and agencies of the ministry of human resources, namely the Social Security Organization (Socso). Foreign or expatriate workers will only be considered if there are no Malaysians interested in applying for the position.
Ferlito said that these measures interfere with the decision-making process of employers and impose the presence of government representatives during the hiring process, which, he said, raises serious concerns in terms of privacy and business independence.
He proposed holding dialogue sessions to allow relevant stakeholders, such as foreign chambers of commerce, to voice their concerns before such measures are implemented.
He also suggested that the government identify a salary threshold, such as RM15,000 per month, above which the new procedure will not be applicable and companies could freely hire without using the portal.
Additionally, he proposed that work permit renewals and business owners be excluded from the scope of the policy.
“CME recognizes that Malaysia has done a wonderful job in attracting multinationals in recent decades, thanks to a business-friendly institutional framework, certainty (regarding) the rule of law and attractive packages such as the Mida Principal Hub scheme.
“However, the most recent policies are putting these great achievements at serious risk,” said Ferlito.
Noting that Malaysia is playing on a “global stage”, Ferlito stressed that attracting the best foreign talent and FDI is crucial, especially since neighboring countries such as Indonesia are developing “very attractive” policies for FDI.
