Are Malaysia’s Labour and Productivity Data Misleading?
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To fully understand the actual economic situation, Malaysian economist Dr Jomo Kwame Sundaram believes the country's labour data and a large portion of its productivity data are quite misleading.
How many foreign workers are in Malaysia?
During the session titled "Accelerating Structural Transformation, Driving Economic Growth" at the Malaysia Economic Summit 2022, Dr Jomo said that based on telecommunication data, it was estimated that there were 6.7 million foreign workers in Malaysia in the middle of the last decade.
He explained that based on the labour data during the period, there were 15 million workers in the Malaysian labour force. About 13 million of them were citizens, while 2.2 million were foreign workers. Hence, he said that there were 4.5 million who were not recorded as foreign workers in Malaysia.
He explained that the numbers implied that 1 out of 3 of the workforce constituted foreign labour. He also emphasised the significance of the government recognising the presence of foreign workers to understand the grave concerns surrounding their contribution and effects on the economy.
"The pandemic could have been used to get a firmer grasp on these issues, but unfortunately, this was not done. Since the labour statistics excluded the foreign workers, especially the undocumented, we have very misleading data.
"By not taking into account the role of non-citizens in the Malaysian economy, our productivity estimates are distorted and do not reflect the actual situation," he stated.
How was productivity measured?
Regarding how services are evaluated, Dr Jomo stated that public (service) employment is the largest contributor.
"How is public employment productivity measured? It is measured by the remuneration and emoluments given. So you have a topological situation where you presume that the income reflects the contribution.
"But we also know that for political reasons, especially in the last decade and a half, we have seen a significant increase in the emoluments, usually before general elections. So the consequence is that we exaggerated the productivity output in the public sector.
"And this, of course, is problematic, So we have a range of issues we need to address apart from other issues," he added.
The first session, "Reviewing Structural Bottlenecks to sustaining Economic Resilience and Unleashing Competitiveness and Productivity for Inclusive Growth," highlighted George Town Institute of Open and Advanced Studies chairman Tan Sri Andrew Sheng; Malaysian Institute of Economic Research senior research fellow and head of research Dr Shankaran Nambiar, and Universiti Malaya Business and Economics Faculty Prof Dr Evelyn S Devadason.
Source: BERNAMA