Is Pushing Foreigners Out of the Country Really the Best Policy for Economic Growth?

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At the risk of being accused of succumbing to self-interest, I am forced to ask whether the government really believes it’s best for Malaysia to start restricting policies allowing foreigners to stay here. Since the new government has come to power, it seems increasingly evident that the international community is, at best, a very low priority, and at worst, a group that’s being purposefully excluded from Malaysia’s growth plans.

I am not referring to the large number of unskilled or semi-skilled workers who have played a major and crucial part in the construction, hospitality, and agriculture sectors. (However, we also understand that over-reliance on foreign labour may cause a slowdown in technological advancement in these industries.) My focus is more on the skilled workers – widely referred to as “white collar” – who make up a large percentage of the expat community.

It has been a rather worrying time for many of us here, not being privy to the inner thoughts or workings of the new government. It’s a very delicate line for expats to walk, knowing full well how most locals have worked so hard together to facilitate an unprecedented change in government for a more progressive and equal Malaysia. In light of one thing which seems to have emerged from that change: a disheartening sideline of foreigners who have invested their skills, their lives, and their financial resources in living here. There has also been no engagement with the expat community who continue to work here, contributing to the country’s economic welfare, so we remain largely in the dark about the role of foreigners in Malaysia’s future.

In fact, there have been new and concerning policies put into place shortening visa durations and restricting employment requirements for foreign workers, bringing into effect what will likely be an exodus of expats from Malaysia if it continues.

We were initially very impressed with the actions of the previous Government and Economic Transformation Programmes that worked as an excellent initiative, as was the tracking put in place (under the purview of PEMANDU) to ensure these plans were properly executed. We were engaged for years by several government agencies, and were happy to play a role in these bold plans for the country’s future. On a personal level, I was very grateful to receive unsolicited Permanent Residency in recognition of our own small contribution with our media publications centering Malaysia as a top-notch destination, both for tourists and working expats.

However, in light of the massive financial scandal that has rocked the country in recent years, all the government agencies stopped using us to communicate their messages and initiatives with claims that their budgets had been slashed. Towards the end of the last government’s term, there were simply no funds available. As a Chartered Accountant and former external and internal auditor, it seemed evident to me that not enough was being done to investigate what appeared to be signs of serious theft.

We were, therefore, very happy to see the new government take over and subsequently try to right the many wrongs that had been uncovered. Unfortunately, there has been negligible help for foreign businesses, because not only do the current government have limited funds, they have shown little to no interest in the resident expat community, further sidelining the country’s MM2H programme. In my view, this action is quite detrimental to the progress of the country in its entirety. There is good reason to limit foreigners working here in the face of high unemployment rates, yet somehow we struggle to see that as the sole cause of such a snubbing towards a whole community.

Our primary focus has always been communicating to an international community what a wonderful country Malaysia is to visit, to invest in, or to call home. We have consistently tried to make people see the positive aspects of Malaysia without making too much of an issue about any negative factors. We are even often criticised for turning a blind eye on such aspects, but that was never our main objective. Indeed we always leaned toward a more positive balance that outweighs the negative by sheer material factors. It has to be said though, in recent years, we feel the margin has become intrinsically smaller.

While we fully understand priorities for the new government fall largely within building up a depressed economy that’s taken quite a beating in recent years, we do feel showing little to no engagement with the expat community and foreigners who have an interest in Malaysia may contribute to an overall negative impact with diplomatic relations.

With more stories emerging daily over struggles to secure work permits, it seems there is a deliberate crackdown to reduce approvals. Although it does make sense if this means helping unemployed Malaysians find jobs, the law of unintended consequences suggests that stopping foreigners from working here will more likely have a negative impact on the country’s fiscal growth. Moreover, the hiring of an expat worker rarely, if ever, means taking a job away from a Malaysian. Most companies would rather hire a Malaysian, all other things being equal, since applying for a work permit for a foreigner is such an onerous and complex process. But many companies tell us that, for certain roles, the skills required demand the hiring of a foreigner. Even so, the number of working expats in Malaysia is comparatively very small to the overall Malaysian workforce.


So while it is understandable that companies would choose to hire relevantly skilled Malaysians whenever possible, there has always been that overhanging factor concerning particular jobs that still require foreign experience, skills, or contacts. Restricting the influx of experienced foreign workers will undoubtedly hurt the companies that require these specific skills to grow their businesses.

Additionally, many foreigners in Malaysia, like myself, run small businesses which provide employment for Malaysians, and with the crackdown on foreign companies, the jobs and livelihoods of those Malaysian workers could be in jeopardy, too. We had the employment pass of one of our three expat staff repeatedly rejected, and after six months, they have still not made any decisions on his appeal. Another had his work permit renewed, but for only a year despite us working hand-in-hand with many local organisations to promote Malaysia overseas.

Malaysia My Second Homers are able to contribute millions of ringgit to the economy and ease the property overhang, as well, but the programme still faces major problems. Many Malaysians are badly informed about the benefits of the programme to the country, and there have been serious delays in approvals for the last 18 months. In fact, at the time of writing, not a single application submitted this year has been approved (or declined). Earlier this year, it was announced that a task force would be appointed to clear the backlog by midyear, but that has not happened. It goes without saying that the slow processing is highly upsetting for applicants, especially as the official processing time is four months. It is most regretfully that I have to say these considerable setbacks have tarnished the country’s good name with many potential MM2Hers.

On a related but slightly different note, we increasingly receive comments from people expressing concerns about the racial and religious tensions here, which appear to be getting worse. Most foreign companies, given a choice, will choose not to invest in a country showing signs of racial and political instability. At this point, the government seems to be taking little action to quell these concerns, though it could be that things are happening behind the scenes of which we are not aware.

Alarmingly, even the tourism sector appear to have dwindling support. Tourism arrivals have been declining for several years and Visit Malaysia Year 2020 was an excellent opportunity to showcase the “New Malaysia” to boost growth in tourist arrivals. However, the projected arrivals of 30 million visitors (compared with recent figures of around 25 million) seemed quite ambitious, not least because there was apparently no additional funding given to the Ministry of Tourism. Lack of funding has often been a repeated complaint from those quarters and in the 2020 Budget, although additional funds were allocated, the budget was urgently needed this year and not after the official Visit Malaysia year begins.

Finally, we have also heard from a number of expats about immigration at airports getting tougher on them. One recent example is a retired Australian who comes to Malaysia frequently, who took a trip to Thailand before returning here. He was only given a 30 day visa instead of the usual 90 days, despite appealing for a longer stay. Immigration proceeded to question him on his multiple entries and exits. At 80 years of age, he was highly unlikely to be a working expat without an employment pass doing an illegal visa run, yet they still treated him as such.

Going forward, we strongly appeal to the government to consider having more engagement with the expat community in order for us to help each other to for a more positive and meaningful progression in “Malaysia Baru.”

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