THERE is an urgent need for the Government to immediately resolve the acute labour shortage that has crippled production and caused businesses to reject new orders to help strengthen economic growth.A more robust growing economy will help to arrest the decline of the ringgit, which depreciated to the lowest level ever against the Singapore dollar at RM3.22 today and a 5-year low against the US dollar at RM4.46.A weak ringgit against two of our three biggest trading partners is an ominous sign of the investors’ lack of confidence in our country’s economic prospects.
The immediate impact will be imported inflation and increased costs and prices, both for businesses and consumers.Presently, there is limited fiscal space available to the Government to overcome these bleak inflation and currency numbers.Therefore, the Government should utilise its policy latitude to generate much-needed economic growth by resolving the acute labour shortage – with a stroke of a pen.“Cost manufacturers RM2 bil”The Malaysian Automotive Component Parts Manufacturers Association (MACPMA) is the latest to state that labour shortages over the last two years have cost automotive parts manufacturers RM2 bil in exports yearly.MACPMA said a few days ago that the severe labour shortage is derailing the economic recovery of the motor auto parts industry, which contributes 2% to Malaysia’s gross domestic product (GDP).The labour shortage has caused stoppages and led to under-production as manufacturers are not able to produce at a higher capacity.These RM2 bil losses by the motor auto parts industry come on top of the RM 31.5 bil in losses by the oil palm sector and glove industry, which could have been overcome by cutting through unnecessary red tape with a stroke of a pen.Instead, the oil palm sector and glove industry is anticipating losses of at least RM21 bil.Malaysia’s oil palm sector earlier lost an estimated RM10.5 bil worth of unpicked fruits in the first five months of this year due to the ongoing labour shortage.The total RM31.5 bil in losses from the labour shortage, estimated at 1.2 mil workers, excludes losses in the non-oil palm or glove industry, such as manufacturing, retail and hospitality, tourism and services sector, where total losses tabulated will amount to tens of billions of ringgit.“Do your job properly”Such wealth destruction could have been avoided if Cabinet Ministers had been more conscientious in carrying out their duties.Indonesian ambassador to Malaysia Hermono had announced the temporary freeze of foreign workers from Indonesia to Malaysia, condemning Malaysia as a disgrace “for breaking its promises in the memorandum of understanding (MoU)” signed by Human Resources Minister Datuk Seri M Saravanan on Indonesian maids just three months ago.Even though Saravanan had announced that all matters were resolved with Indonesia, there is no confirmation from Hermono.With such a severe trust deficit between both countries, can Saravanan tell Malaysians when will Indonesian workers be returning back to Malaysia? – July 26, 2022Lim Guan Eng is DAP national chairman, Bagan MP and a former finance minister.The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
Main photo credit: J.P. Morgan
