Policy experimentation and suckers

I hear from a friend in the construction sector that cement prices recently have come down by some 40-50 percent because of lack of demand -- an indicator that the construction sector is hard hit. "Hard-hit" may be an understatement, it is near paralysis, and one cause springs immediately to mind, though not the only factor.

The 300,000 or more Indonesian illegals who left for their home who were expected to come back under a fast-track programme (including the Malaysian immigarion teams being sent to 11 one-stop centres to process their applications to return to work in Malaysia legally second or third or umpteened time around ...) has hit a hard wall. The expected tidal wave of returning Indon workers has turned out to be a trickle.

Adhoc government policy turns to Pakistan to invite 100,000 workers to fill the vacuum; at the same time Pakistan says it is turning to Malaysia for highly skilled workers in the construction field. When the number of workers required was made known by interested parties (employers) to be much higher than avaialble from one source country, the Government said workers can come from India, Bangldesh, Vietnam and Nepal, but they must come in "legally".

Meanwhile, we have read news reports that Ops Tegas launched to flush out some 400,000 (or is it up to 800,000?, as even government figures varied widely!) illegal workers still present in Malaysia only have netted some slightly more than 3,000 offenders in the first four weeks. Are there so many good hiding places to play "hide-and-seek" so successfully in our Malaysian jungles or kongsi and squatter settlements?

But have we identified the problems correctly, and is the Government adopting the right remedial measures? Or is the Government just taking pot-shots like using a machinery gun so that some bullets will hit an occasional target or two?

In the early 1990s, the property sector was the darling of investors and the state capital cities, epitomised by Kuala Lumpur and Petaling Jaya, and Georgetown, quickly became a boom towns centred on the building of office buildings and residential houses, mid-priced terraced to high end ranging from RM80,000 to RM1.0-2.0 milion condominiums and "exclusive" bungalows depending on locations. At the same, annual updates from experts in the industry showed several billion worth of properties unsold ("overhang" is the term), and yet the developers are building more and more ...

Just take an evening drive around the new Nilai township, and you see row upon row of shophouses and houses for sale/rent. Other townships dotted throughout the country, similar scenario maybe, perhaps readers care to feedback?

Many KLSE listed companies switched smartly from their non-property core activities to property development. defeating their original listing objectives inthe first place -- never mind, the ultimate aim was to make profits, but for whom? The bells rang joyous and gay for the first arrival investors, but for late-comers, usually small retail investors, the bells started to toll. When several firms were put under S176, or PN4 which implies that they were unable to manage their finances properly, and are heading towards bankruptsy or already are, or did not have anymore core activities with sustainable profitability, many commoner-investors were made suckers. (For more details of what S176 or PN4 means, please ask your remisier or journalist friend covering the Business beat!)

Now, readers may wonder how the foregoing ties in with today's topic. Let me weave several seemingly disparate events into a pattern and maybe we perceive the links which amounto policy experimentation, and how it is mostly the ordinary Malaysian citizens were and are and will be made "suckers".

Creating more vicious cycles of unemployment for Malaysians

The Star of April 5, 2005 led off with Open to all page 1 headline, with subhead Malaysia to take in labour from all countries for all sectors, including the small-and-medium-sized industries. For the past decade or longer, the huge influx of workers had depressed wwages so much that it was no longer viable for local construction workers to remain working in construction.

Yes, the froeign Indon workers getting RM30 a day would be able to save and live like a lord when they return to their homeland after 2-3 years with "huge" savings when converted to the Indon rupiah, making them multi-millionaires! But Malaysian workers toiling in the hot equatorial sun who had been earning some RM50-RM80 a day previously now find themselves having less take-home pay, but prices of food and other essential items rising and rising every year, with no end in sight. They don't see the oil dollar from new oil fields found off Malaysian shores trickle down some benefits to them ordinary citizens, so what gives?

The Star report said that the number of registered foreign workers in the country has topped 1.5million, according to Deputy Prime Minister Datuk Seri Najib Tun Razak, adding that the figure could rise to 2million by mid-2005. And this is what worries the common Malaysian labourer -- rising numbers of foreigners translates into lower wages for the locals, now compounded by the phenomenon multiplying to other sectors, (no) thanks to a Government policy-makers who seem to have wool over their eyes.

More controversial news is in store. A few days later, theSun of April 11, 2005 on page 1 flashed the news headlined 51% Malaysians with subhead Employers may be compelled to hire more locals, quoting Deputy Mimister of Human Resources Datuk Abdul Rahman Bakar as saying that the ministry plans to amend the Emplyment Act 1955 for the purpose of requiring employers to employ at least 51 percent of Malaysians in their workforce to reduce reliance on foreign workers.

Under the initial proposal, the requirement will involve all sectors, including the manufacturing, construction and service industries. But how can you enforce this quota when policy experimentation forces the local workforce to flow in the opposite direction?

I see huge and finally, may be insurmountable hurdles with the two announced policy measures. Just as in the construction sector, when more foreign worketrs are brought into Malaysia in all other sectors, wages will again be depressed as far as the local workers are concerned, yet creating more vicious cycles of them leaving those sectors. Higher unemployment follows for the Malaysians, but lucartive temporary haven for more foreigners ...

So how is the objective of the just announced policy of requiring 51 percent local workforce to be achieved? I scratch my head, I can't follow the logic, but maybe the Ministry under Datuk Fong Chan Onn has a better explanation.

Just detouring a little, but a relevant outing no doubt. The Health Minister Datuk Chua Soi Lek in accompanying Prime Minister Datuk Seri Abdullah Ahmad Badawi in his official visit Down Under jsut ended, was reported to have urged Malaysian doctors, especially specialists, in Austrlia -- quite likely holding Permanent Resident status there -- to returm to serve their home country, with several conditions e.g. three years' compulsory service with the government hospital, being waived for those above age 45.

To me, previous similar attempts like that mounted by the science ministry to get Malaysian scientists to come back to serve the motherland had failed miserably. The country always seems to act after the fact, "woo-ing" professionals who have settled down copmfortably in their new, adopted "homes" to return -- throwing in a few candie bars now and then. Such measures only work with kingarten level; hey, we ware dealing with educated, well-informed, globalised citizens here!

Our leaders may benefit with a little time off reading Thomas Friedman's "The Lexus and the Olive Tree". Maybe, just maybe, they may wake up to the fact it's now the Internet age, and a borderless world. We indeed live in a village, the globalised village. And it's open competition out there, and free and untamed market forces ever-changing and quite unpredictable. The Ministry of Human Resources has better inform and equip itself properly, otherwise it wakes up one day to become a Rip van Winkle!