M’sia praised for impressive handling of economy

While achieving positive growth, govt must also work with businesses to resolve worker shortage issues, says MEF

PETALING JAYA: The Malaysian Employers Federation (MEF) yesterday expressed confidence in the government’s handling of the economy, which has demonstrated remarkable resilience, achieving a robust growth rate of 5.9% in the second quarter of 2024.

At its annual general meeting yesterday, its president Datuk Dr Syed Hussain Syed Husman (pic), said the impressive performance was driven primarily by stronger domestic demand and a significant export expansion.

“Investment activities have remained solid, supported by the steady progress of multi-year projects and the growth in capacity undertaken by numerous companies.

“Exports also saw a remarkable improvement, buoyed by higher external demand and the positive ripple effects from the global tech upcycle. On the supply side, nearly all sectors registered growth.”

Syed Hussain said the manufacturing sector benefited from broad improvement across all clusters, especially in the electrical and electronics industry. In contrast, the services sector experienced strong growth driven by the robust performance of consumer and business-related subsectors.

“In the second quarter of 2024, unemployment declined to 3.3%, which is a testament to the strengthening job market, inflation tapered to 1.9% indicating a stable economic environment, and the ringgit appreciated against the US dollar by 0.2%, reflecting improved investor confidence.”

However, he said despite all these positives, human resource needs are still not being given priority through the hiring of foreign workers. Over the past year, the business community has had to contend with changes in workforce dynamics and recruitment environments.

“So, it is sad to see businesses having to reject orders as they cannot deliver due to worker shortages.”

Syed Hussain said in 2023, the government expressed intention to instal a foreign workers’ management centre under the Human Resources Ministry to streamline processes and enhance efficiency.

“We supported this move, but in recent developments, the Home Affairs Ministry wants to take charge of labour migration. Government and businesses must work seamlessly for the benefit of all parties. Hence, it should focus on the plight of worker shortages, especially by small and medium sized enterprises.”

On the Progressive Wage Policy (PWP) proposed on Nov 30, 2023, MEF called for a transparent rollout of cash incentives to encourage local businesses to adopt it.

“Clear guidelines are needed so that employers can understand and decide for themselves if they can afford to implement the PWP without government assistance.”

On the Employees Provident Fund, he said in 2023, MEF expressed concern over the RM101.1 billion in EPF withdrawals, and highlighted the risk of old-age poverty.

“We supported halting further withdrawals and advocated aid for Covid-19 and those affected by floods.

“We also emphasised the need for comprehensive retirement solutions, including social safety nets and upskilling initiatives, and called for the reviewing of withdrawal policies to align with the 60 years retirement age.”

Syed Hussain said MEF wants the Social Security Organisation to extend coverage and benefits beyond retirement, as the schemes cease once employees retire at 60.

“We also note that existing old-age assistance programmes, like Bantuan Warga Emas, cover only about 40% of basic income needs, so we call on the government to support retirees who have contributed during their working years.”

Syed Hussain said as Malaysia takes over the Asean chairmanship in 2025, small and medium-sized enterprises (SME) across the bloc should be empowered through targeted digitalisation programmes.

He added that such initiatives would enable them to collaborate more effectively with regional counterparts, enhance productivity, and compete more successfully in international markets.

“It is also imperative for Asean to establish clear policies to guide SME to innovate their business models and pool resources within ecosystems. This will enable them to navigate the digital transformation successfully.

“Addressing these strategic matters would ensure a more equitable and competitive economic landscape across the Asean region,” he said.