Regulate Foreign Labour participation under Madani Economy – Jomo

Regulate Foreign Labour participation under Madani Economy – Jomo

KUALA LUMPUR, (Bernama) — Prominent economist Prof Dr Jomo Kwame Sundaram today called for the regularisation of foreign labour to recognise the participation of undocumented foreign workers in the country’s labour workforce under the Madani Economy.

He said currently, Malaysia did not include undocumented foreign workers in its per capita income.

“One of the features of the Madani Economy, which is interesting, is a commitment to increase the labour share of income. Malaysia’s labour share of income is actually very low at 40 per cent, and there is a pledge to increase it to 45 per cent. This number is arbitrary in my view.

“Increasing the labour share of national income is actually quite important because we have a problem in Malaysia, where we pretend the contribution of undocumented labour is not there,” he said during a discourse series organised by INCEIF University here today.

Jomo was part of a panel session titled “Reviving the Malaysian Economy: Why, How and Who?”

He said foreign labour was collectively estimated at about 6.7 million about a decade ago against an  estimated labour force of about 15 million.

Assuming that the documented foreign labour was at 2.2 million, if this 2.2 million is deducted from the 6.7 million, that means there are 4.5 million undocumented foreign workers which is “almost one quarter of the country’s labour force, and you pretend that they are not there?,” Jomo said.

“So basically, we are really overestimating per capita income, and we are overestimating productivity because we do not have this in the denominator,” Jomo said.

In October 2022, former Minister of the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed said Statistics Department Malaysia recorded 2.1 million foreigners working in various sectors up to June 2022.

Columbia University’s Richmond Center for Business, Law and Public Policy senior fellow Dr Aamir A Rehman was also present at the session.


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