MALAYSIA PLANS TO RECRUIT PAKISTANI WORKERS

Financial Times, UK
March 19, 2005

By JOHN BURTON and SHAWN DONNAN

Malaysia plans to recruit 100,000 Pakistani workers to solve a crippling labour shortage that threatens to slow economic growth in the wake of the mass expulsion of illegal foreign workers.

The decision came as businesses dependent on low-paid workers, including construction and electronics groups, warned of losses due to the shortage of labour.

The labour crisis underscores Malaysia's reliance on foreign workers to fill low-paying jobs shunned by locals in one of south-east Asia's most prosperous countries.

It has also raised questions about the government's decision to crack down on nearly 1m illegal foreign workers after public complaints that they were responsible for increased crime.

Malaysia has expelled more than 400,000 illegal foreigners in recent months. "Our industries are suffering due to the shortage of workers. We will do whatever is necessary to overcome the problem," said Najib Razak, deputy prime minister.

Officials estimated that the labour shortage included 200,000 jobs in manufacturing, 150,000 in construction, 50,000 on plantations and 20,000 in services such as restaurants and hotels.

Malaysia's low unemployment rate has added to the crisis.

The crackdown has also strained relations with neighbouring Indonesia, the biggest source of illegal workers.

The plan to recruit Pakistanis is likely to increase those tensions. The treatment of its overseas workers is a big political issue in Indonesia, and national sentiment against Malaysia has been intensifying as a result of adisputed border off north-eastern Borneo.

In October Malaysia ordered all illegal foreign workers to leave under an amnesty, with a promise that they would be able to return once they had received proper working papers.

Those found after March 1 have been subject to arrest, fines and possible caning before being deported. But fewer than 3,000 have been caught since then, with up to 400,000 having gone into hiding.

In January, Malaysia tried to ease tensions with Indonesia by imposing a freeze on recruitment of new foreign workers so that illegal workers who left under the amnesty could return legally.

Malaysia and Indonesia agreed to "fast-track" procedures to enable this.

But Malaysia claims bureaucratic delays in Indonesia have blocked the return of Indonesians; a claim denied by Jakarta.

Next week Malaysia's cabinet will discuss plans to recruit workers from other countries, including Vietnam, Burma, Sri Lanka, Bangladesh, China, India and Cambodia.

The Malaysian Institute of Economic Research has warned that a prolonged labour shortage would affect economic growth, estimated at 6 per cent this year. Additional reporting by Shawn Donnan in Jakarta