Immigration complements Malaysia’s workforce, says World Bank

KUALA LUMPUR (April 22): Migrant workers play a complementary role in Malaysia’s workforce, enabling the country to expand employment, according to the World Bank.

To illustrate this, Dr Apurva Sanghi, the World Bank’s lead economist for Malaysia, said that based on data from 2010 to 2021, for every 10 migrant workers entering Malaysia, two additional Malaysians He said he would be hired.

“One of the main reasons for the perceived negative impact between immigration and labor market outcomes in Malaysia is the misconception about labor: that the demand for labor in the economy is fixed, or that the It is a false belief that the numbers are constant,” Apurba said in a media briefing during Part 1 of the World Bank’s April 2024 Malaysian Economic Monitor (MEM) titled “Bending the bamboo shoots: Strengthening basic skills.” mentioned in.

“This means that the employment of immigrants reduces the employment opportunities available to Malaysians.

“Having said that, this is a fallacy because an increase in demand for labor, whether immigrant or not, leads to an increase in aggregate demand in the economy through increased consumption by these workers, and then further “This is because the demand for labor will increase,” he explained.

Mr Apurba stressed that Malaysia is evolving into a well-educated country, with citizens increasingly taking up middle to high-skilled jobs, while lower-level jobs are filled by migrant workers. .

As such, he said, migrant workers essentially play a complementary role in Malaysia’s labor market.

Malaysia faces growing concerns about underemployment and brain drain

Meanwhile, Dr Yasuhiko Matsuda, Country Manager for Malaysia at the World Bank, said Malaysia needed more work to strengthen skills and reduce the problem of underemployment, where individuals are held in jobs below their qualifications and skill level. He stressed the need to create better employment opportunities.

He emphasized that “companies are not creating enough jobs for trained individuals at a given skill level” and are therefore settling for low-skill jobs. The solution, he suggests, is to encourage companies to create more jobs.

Furthermore, Mr. Yasuhiko said, “Despite individuals having formal qualifications or degrees, companies often lack the skills required in interviews.” Therefore, there is a need to focus on improving the quality of education, he said.

Echoing this sentiment, Apurva suggested that strengthening skills and creating more and better jobs should be the starting point. “Part of this process involves aligning what is taught in schools and academia with industry demands,” he said.

Asked about the deep-rooted issues of labor productivity and brain drain, Apurba pointed out that improving productivity is essential to addressing Malaysia’s brain drain issue.

He explained: One approach is to start by increasing your investment. What is noteworthy is that investment in Malaysia’s GDP is decreasing. At the time of the Asian financial crisis, it was around 30%, but it has now fallen to just under 20%. ”

He added that another key to improving productivity is strengthening basic skills.

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