October 31, 2020 House of Trust

Dependency Dilemma of Foreign Workers in Johor

“They build our cities, they serve us teh tarik, they raise our children, yet we don’t want too many of them”.

– Benedict Weerasena

The influx of foreign workers is a worrying phenomenon in Johor. This has resulted in the need for Johoreans to compete and share subsidies and facilities provided.

For instance, public spaces are crowded with foreign workers over the weekends, creating some uneasiness among local communities. This phenomenon is especially evident in certain towns in Johor such as Muar and Pengerang which are enjoying a booming furniture industry and undergoing rapid development of the integrated petroleum complex respectively.

Benedict presenting on Foreign Workers in Johor
*Photo Credit: ISEAS-Yusof Ishak Institute

In addition, the overdependence on low-skilled foreign workers has suppressed wages and served as a disincentive to automation which in turn impedes efforts to improve labour productivity.

As a result, the 11th Malaysia Plan set a cap of 15 percent of employment of foreign workers or not more than 2.3 million of the total workforce by the year 2020. Furthermore, the formulation of a comprehensive immigration and employment policy such as effective managing and screening of foreign workers was given top priority.

However, several business stakeholders in Johor such as the Muar Furniture Association and Master Builders Association Malaysia, have voiced their concern as their businesses are already facing a shortage of manpower. A decrease in foreign worker dependency will affect Johor’s output and revenue in the short term. This presents a Dependency Dilemma.

Attendees of the conference on “Johor: People, Palm Oil and Places”
Photo Credit: ISEAS – Yusof Ishak Institute

On 13th August 2019, Benedict Weerasena (Economist of Bait Al Amanah) was invited to present a paper entitled “Foreign Workers in Johor: The Dependency Dilemma” at a conference on “Johor: People, Palm Oil and Places”. This conference hosted and organized by ISEAS – Yusof Ishak Institute, Singapore was attended by an audience of around 50 academicians, researchers, civil servants, diplomats, and members of the public.

The other presenters include Dr Serina Rahman (Tourism in Johor: Constraints, Challenges and Prospects; Johor’s Environmental Issues, Overlaps and Future), Ng Keng Khoon (Johor Bahru – Urban Transformation: Authority and Agency Revisited) and Dr Geoffrey Pakiam (Johor’s Oil Palm Economy: Past, Present and Future). For more information on the other presentations, refer to ISEAS – Yusof Ishak Institute’s write-up.

Presenters and Moderators of the Conference
Photo Credit: ISEAS – Yusof Ishak Institute

Coming back to the presentation on Foreign Workers, several interesting findings were shared including:

  • Government policy reversals on foreign workers happened time and again due to ad-hoc management of in-migration, lacking in long-term oversight on labour management and insufficient enforcement of existing regulations.
  • There is a total of 308,190 active PLKS holders or documented workers in Johor as of February 2018. (Source: Ministry of Home Affairs)
  • Agriculture, Manufacturing and Construction show a substantially high dependency on foreign workers, as compared to services
  • However, there is no official data on undocumented foreign workers in Johor.
  • Many employers attest to the better attitude and quality of work of foreign workers as compared to local workers.
  • Manufacturing companies who mostly hire foreign workers instead of local workers intend to continue hiring more of the former in the future.
  • Government policies are more likely to influence long-term dependency on foreign workers as compared to social factors.
Presenters of Session 1
*Photo Credit: ISEAS-Yusof Ishak Institute

The presentation session ended with a Question and Answer session where attendees posed questions on the availability of data breakdown by sub-sectors, future of foreign workers, immigration and citizenship, the prospect of a levy on foreign workers to regulate immigration, terminology differences between ‘illegal’ and ‘undocumented’ foreign workers, discrimination towards undocumented foreign workers including crime and housing and isolationist policies.

For more information and data presented on Foreign Workers, please refer to the full presentation slides attached below:

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