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335912523 Positive Negative Impacts of Migration in Malaysia
Course: Economic (944)
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University: Kolej Tingkatan Enam Tunku Abdul Rahman Putra
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POSITIVE IMPACTS OF MIGRATION IN MALAYSIA
From an economic point of view, the inflow of migration into the country encourages positive
economic growth. Malaysia's rapid economic growth and industrialization process over the
decades has indeed increased the demand for various skilled labors which then brought about a
chronic shortage of low-skilled labor and high-skilled intellectual capital.
As reported by the Malaysian Insider, the country's local workforce is definitely insufficient to
support local industries despite the federal government's ambitious plans to make the nation a
fully high-income economy under the New Economic Model. It is undeniable that Malaysia
faces tremendous shortage of human capital. Due to the labor and brain shortage, employing
foreign workers is considered to be the most viable solution for Malaysia to remain competitive
in the world market.
Importation of low-skilled foreign labors fills up vacancies mainly in the manufacturing,
construction, agriculture and service sectors. Foreign workers are inexpensive, hard-working and
will not resist 3D (dirty, dangerous and difficult) jobs which locals instantly shun. Although these
jobs are physically demanding and labor intensive thereby often shunned off by most locals,
these sectors are important as they are the main contributors to the nation's Gross Domestic
Product (GDP).
Furthermore, as a matter of fact, foreign workers have also served as additional skilled labor
force in meeting the extra demand in national development programs and infrastructure projects
such as the construction of Kuala Lumpur International Airport (KLIA) and Petronas Twin
Towers (KLCC). Besides low-skilled work force, Malaysia also greatly depends on foreign
professionals in the tertiary sectors to propel its competitiveness. Malaysia has adopted greater
openness in hiring skilled expatriates, especially information technology (IT) professionals,
lecturers, accountants and engineers. The biggest change is in the Multimedia Super Corridor
(MSC) project in which there are no limits on employing IT professionals (Lydgate and
Mertens). It is realized that Malaysian society still lacks high technological skills among its local
human capital; hence there is a dire need to outsource foreign professionals to assist the
transition of Malaysia from its tertiary industry to quaternary industry, in line with the country's
aspiration to become a developed nation by 2020.
In addition, the existence of foreign workers creates a competitive labor market and thus allows
Invisible Hand to be effectively put to work. Generally speaking, the foreign workers' biggest
contribution to the Malaysian economy is by supplying a cheaper labor force and therefore
keeping manufacturing commodities low as foreign workers normally demand much lower pay
of wages. As a result, with lower production costs business profits are raised and this certainly
attracts more foreign investors to the country. In turn, these foreign investments will also benefit
Malaysian society as more employment opportunities are created.