Why Malaysia needs 500,000 additional foreign workers

Expat news
  • people walking in the street in Malaysia
Published on 2023-01-25 at 07:49 by Asaël Häzaq
During COVID, more than 700,000 foreign workers left Malaysia. Faced with major labor shortages in key sectors, the government has announced a vast international recruitment program. Here are some insights.

Malaysia is running out of manpower

There has been a lot of buzz about this announcement. Malaysian Minister of Human Resources, V. Sivakumar, recently introduced a new strategy to address the labor shortages affecting several sectors throughout the country. Referred to as the "Foreign Workers Employment Relaxation Plan", it aims to recruit 500,000 foreign workers in sectors and sub-sectors that are particularly under pressure, such as construction, manufacturing, agriculture, plantations, and services (restaurants only). The minister indicated that this figure would likely increase should the government need more foreign workers. The current estimate was based on the assessment conducted on labor shortages in the five sectors mentioned above. 

He further added that this would in no case be a threat to the jobs of Malaysians. Nor will the government go beyond the cap of 2.4 million foreign workers in its territory, in accordance with the 12th government strategy. Employers in the relevant sectors can initiate recruitment via the Foreign Worker Centralized Management System (FWCMS), a platform specially set up for this purpose. Home Affairs Minister Datuk Seri Saifuddin Nasution Ismail was also quoted saying that companies will be able to recruit foreigners from 15 "source" countries without worrying about quota and eligibility requirements.

Supporting economic growth

On October 31, 2022, the now-defunct Malaysian National Recovery Council (NRC) called for a "quick solution" to the problem of foreign labor shortages. It urged the government, particularly the Ministries of the Interior and Human Resources, to revise its rules for recruiting more foreign workers. The sectors under pressure are, in fact, those usually employing a large number of foreigners, hence the urgency to bring them back to the country. Malaysia relies on this foreign workforce to remain a strong economic player. In 2021, it ranked 5th among the economic powers of the Association of Southeast Asian Nations (ASEAN) in terms of GDP.