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Malaysia’s economy is cranking up after the pandemic. Land borders with Singapore have reopened, bringing in millions of visitors. Kuala Lumpur’s notorious traffic jams are back and shoppers are flocking to malls. The revival also has a rich irony: So many workers have left for better-paid jobs in the country’s wealthy southern neighbour that businesses are struggling to meet demand.
From tourism to agriculture, an absence of staff is constraining the recovery. It’s also adding to deeper strains in an upper middle-income economy that was once a model for the developing world but has since suffered from a long-term slowdown in growth — one that started well before Covid-19. To graduate to the next tier of prosperous economies, Malaysia must staunch the flow of talented citizens abroad.
The nation’s ambition is to escape a middle income trap, where it is less affluent than Singapore, but doing better than neighbours like Indonesia and the Philippines. It’s one thing to bring in labor for agriculture, construction and low-to-mid-tier manufacturing. But Malaysia faces a double whammy: The low-skilled workforce is depleted because of a hiring freeze and border closures during Covid-19, but high-skilled people are likely to resume their exodus.
Malaysia is slowly starting to ease its restraints on hiring. To offset the crunch in the meantime, employers have been engaging locals in work they often shunned: “3D jobs†that are dirty, dangerous and difficult. In the Cameron Highlands, where trucks wait to drive to Singapore with tomatoes, peppers, onions and cucumbers, farmer Louis Lau is using Malaysians for labour once sought by foreigners. “We are facing a big problem,†he told me. Other sectors don’t have the same flexibility. In Penang on the northwest coast, scores of ships that would normally be put to sea for at least a week sit dockside, thanks to a dearth of migrant workers.
At the other end of the country, hoteliers in Johor bemoan the gravitational pull of Singapore.
—Bloomberg