Malaysian PM keen to boost productivity through new technology

Author: PM editorial | Date: 29 Jun 2016

The adoption of innovative technology could help boost productivity and reduce need for foreign workers, says Malaysian prime minister

The Malaysian prime minister has urged companies to reduce their dependence on foreign labour and embrace new technology, in order to increase productivity.
 
Speaking at the Associated Chinese Chambers of Commerce and Industry of Malaysia’s Annual General Meeting, on 22 June, Datuk Seri Najib Razak said businessmen needed to consider the long-term effects of using foreign labour on the country’s competitiveness, according to Malaysian national news agency Bernama.
 
“I have heard that businesses need foreign workers to increase productivity, which will bring more revenue. But I would like you to be less dependent on foreign workers by adopting new technology to improve productivity,” he said.
 
The prime minister used the implementation of the Industrialised Building System in the construction industry as an example of the changes he’d like to see happen. This system sees components manufactured in a controlled environment, and in a standardised way, before being assembled on site, with the increasing use of automation and robotics resulting in greater productivity.
 
Malaysia is currently dependent on foreign labour in a number a key sectors, including manufacturing and production. The country has a population of just under 30 million, with around 2.1 million registered immigrants and an estimated one million undocumented immigrants, which made up 15 per cent of the country’s workforce in 2014, according to a World Bank report published in December last year.
 
Foreign labour has filled gaps in the low- and mid-skilled job markets, which make up around three-quarters of all jobs in Malaysia.
 
However, in February this year the country announced it was going to freeze its intake of foreign workers and encourage employers to hire local people first – a move welcomed by the Malaysian Trade Unions Congress.
 
It was prompted by fears about the effects of a sudden influx of workers from Bangladesh, and while a memorandum of understanding (MOU) was signed between the two countries, the Malaysian government then suspended the recruitment of all foreign workers, including those from Bangladesh, until it had reviewed its levy system and rehiring programme.
 
But by May employers were urging the government to rethink its ban as they were facing a significant labour shortage, prompting it to be lifted in four key sectors: manufacturing, construction, plantation and furniture-making industries.