KUALA LUMPUR, Dec 2 ― The recent depreciation of the ringgit and the probability of a continuing slump is forcing Malaysia’s foreign labour to consider returning home or looking for employment elsewhere, Singapore’s Straits Times reported today.
The report said ringgit has hit an all time low this week of RM3.12 against the Singapore dollar, while also losing ground to currencies such as the Indonesian rupiah and Bangladeshi taka ― two countries where most foreign labour here come from.
“The large companies are considering making adjustments in the wages and subsidising the amount of money workers can send home.
“But workers for smaller companies are unlikely to renew their employment permits because of the high cost,” Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan was quoted saying.
Bangladeshi workers were also reported to have experienced a 37 per cent drop in salary over the last six years due to the drop.
According to the MEF, foreign workers in Malaysia stands at 2.1 million out of the country's workforce of roughly 15.4 million.
There is also an estimated 2.2 million unregistered or illegal workforce, which goes over the government's limit of 15 per cent of the foreign labour in the entire workforce.
In order to mitigate the exodus, the MEF has made proposals to the government to consider allowing the roughly 160,000 refugees of mostly Rohingya and some Syrians, to take up the vacancies although it is not clear how.
“The government may wish to treat refugees allowed to work differently and not necessarily under temporary work permits like the foreign workers currently,” said Shamsuddin.
The refugees in Malaysia are scattered across squatter areas and rented lots, and most are employed informally in manual labour or casual jobs.
The report said that the United Nations High Commissioner for Refugees has been trying to coax large corporations to provide informal work for those stranded in Malaysia but refugee aid groups say there has been very little progress.
Centennial Asia Advisors chief executive Manu Bhaskaran said that the country's alleged overdependence on foreign workers has weighed down its economic competitiveness and made it hard for local companies to move up the value chain.
“There are also serious socio-economic consequences because the influx of poorly paid and unskilled workers will have a depressive effect on the wages of Malaysian workers at the lower level,” he said.
News agency Reuters reported that the ringgit has plunged nearly 7 per cent over the last two weeks, the worst performing currency in Asia.
It is 4.468 to the dollar at the end of trading yesterday, according to Bank Negara Malaysia.
However, Prime Minister Datuk Seri Najib Razak said on Monday the performance of the ringgit, which is said to have dropped slightly of late compared to the United States dollar, is not as bad as claimed by certain quarters.