The impact of migration

Who will fuel economic growth?

“It’s not just monetary,” says Ariff. “It goes beyond dollars and cents. [Emigration] is not confined to any particular group. It’s everyone; even Malay [Malaysians] are leaving.”

By Ding-Jo Ann, The Nut Graph

WITH the recent attack on churches, a Catholic school and a Sikh gurdwara, migration is likely to be on the minds of some Malaysians. Despite government assurances that “everything is under control“, diminishing respect for rights as demonstrated by the “Allah” issue has naturally caused consternation among educated Malaysians.

At the same time, Prime Minister Datuk Seri Najib Razak says Malaysia must become a “high-income” economy so that it can stave off decreasing prosperity and standards of living. Indeed, a government-commissioned 2007 World Bank report on Malaysia’s education system and economy says Malaysia has “no choice” but to change its economic model.

Malaysia, the report said, can no longer compete with the lower wages in developing countries like China and Vietnam.

But with mass migration and the loss of skilled Malaysians, is it realistic to expect Malaysia to compete with developed economies? Will enough skilled Malaysians stay on so that Malaysia can escape the middle-income trap?

Skilled workers crucial

Malaysian Institute of Economic Research executive director Datuk Dr Mohamed Ariff Abdul Kareem says skilled workers are crucial to move the economy up the value chain.

“When foreigners come looking to invest, they look for people with skills … If skilled people are leaving to go elsewhere, this will be a spoke in the wheel for us,” says Ariff in a phone interview.

Malaysian Employers Federation executive director Shamsuddin Bardan adds that while the number of unskilled foreign workers has increased, the number of skilled expatriates has dwindled.

“In 2000, we had about 80,000 expatriates [in Malaysia]. By 2008, there were only about 38,000. Coupled with that, our professionals are also moving overseas,” he says. Shamsuddin tells The Nut Graph in an e-mail interview that there are currently about 785,000 Malaysians working overseas.

Recruitment agency Kelly Services’ vice-president and country general manager Melissa Norman confirms that the oil and gas, Islamic banking, and high technology sectors have faced challenges in finding suitable skilled labour.

“Countries such as China, Vietnam, India, Singapore, Australia and certain Middle Eastern countries have benefited from our brain drain,” says Norman.

Wider economic ramifications

Other than the skills shortage, mass migration of skilled Malaysians also has wider economic ramifications.

Rating Agency Malaysia’s group chief economist Dr Yeah Kim Leng says those emigrating tend to be in the high-income bracket with higher spending capabilities. “[Their] absence will have a negative impact on consumption and consequently on the country’s overall domestic demand,” he says.

“Emigration also causes a withdrawal of capital,” Yeah adds. “When [skilled Malaysians] relocate, they bring with them whatever wealth and savings they have. It would contribute to the outflow of capital from the country.”

Low pay, discrimination, corruption