New Manufacturing Investments Must Reduce Reliance On Foreign Workers -- MITI

KUALA LUMPUR (Bernama) -- The government will ensure new investments in the manufacturing sector do not rely on foreign workers or manual labour, in line with efforts to transform the industry toward high value-added activities, automation, and digitalisation, the Ministry of Investment, Trade and Industry (MITI) said.

Its minister Datuk Seri Johari Abdul Ghani said this approach is part of an effort to address the industry’s long-standing reliance on foreign workers, while also enhancing productivity and encouraging the employment of the local workforce. 

He said the government also wants to ensure foreign workers are employed only for “3D” jobs -- those that are dangerous, difficult, and dirty. 

"For any industry that approaches MITI or the Malaysian Investment Development Authority, we will provide clarification if a company wishes to employ foreign workers -- but with the condition that this is strictly for ‘3D’ jobs,” he said during the questions for oral answers session in the Dewan Rakyat today. 

He was replying to a supplementary question from Tan Hong Pin (PH-Bakri) on whether the government is prepared to offer policy flexibility to allow companies to hire foreign workers, based on the specific needs of different industries and enterprises. 

Johari said Malaysia currently has approximately 2.6 million foreign workers, while the industrial sector's reliance on foreign workers remains a major challenge that must be addressed in stages. 

Under the vision of the New Industrial Master Plan 2030 (NIMP 2030) and the 13th Malaysia Plan, he said the 80:20 workforce quota serves as a key policy to reduce reliance on unskilled foreign labour and accelerate the transition of local industries toward automation. 

However, he said it is the other way around now, as 80 per cent of the industry requires foreign workers, while only 20 per cent are local workers.

“We face a significant issue where companies that have been operating in the country for 10-20 years still seek to hire foreign workers, even though we have a pool of 400,000 individuals -- graduates from technical and vocational education and training (TVET) programmes -- available for the workforce. 

“If we do not resolve these policies, including the issue of 2.6 million foreign workers (excluding those who are here illegally), it will damage the country in the future,” said the minister. 

Johari said the government is also paying attention to wages offered by the industry, as some companies continue to pay low wages to local workers, including TVET graduates. 

He said the current median wage in the manufacturing sector is RM2,775, compared with the NIMP 2030 target of RM4,510. 

“If these jobs do not provide ‘economic value’ to them, they will not take it,” he said, emphasising that local workers must be offered rewards commensurate with their skills and the value of the job. 

Meanwhile, Johari said the government does not intend to relocate low-tech (technology) manufacturing industries abroad.

Instead, he said it is focusing on progressively transforming and upgrading existing industries through the adoption of automation technology and digitalisation. 

He said the manufacturing activities targeted for transformation include those characterised by a high reliance on manual labour and manual processes, as well as low productivity and low value-added, and which operate under a model intensive in low-skilled labour. 

To support this effort, Johari said MITI will provide various forms of support, including grants, funds, and tax incentives, to encourage the adoption of smart technology and automation in manufacturing processes. 

Furthermore, he said the government will ensure the industrial modernisation process does not adversely affect the existing ecosystem, particularly small and medium enterprises, by providing financial assistance and technological support under the NIMP 2030 framework. 

Meanwhile, in reply to a supplementary question from Datuk Dr Ku Abd Rahman Ku Ismail (PN-Kubang Pasu) on the latest progress of the NIMP 2030 policy, he said MITI is collaborating with the Department of Statistics Malaysia to refine data collection for the manufacturing sector.

Johari said this will allow more accurate measurement of industrial transformation progress, including in the electrical and electronics, chemicals, advanced materials, aerospace, and healthcare sectors. 

Such collaboration is essential to ensure the data collected reflects structural changes in the industry and to help the government formulate strategies to ensure new investments complement domestic economic activities, he added. 

-- BERNAMA