1.5 million Bangladeshi workers: sadly, even Khairy can’t think straight

I am often sympathetic to the precarious position of Youth and Sports Minister Khairy Jamaluddin in UMNO as one of the last few in UMNO who has intellectual prowess to comprehend sophicated policy matters.

Sadly, I am proven wrong. On the issue of the 1.5 million Bangladeshi workers, even Khairy can’t think straight.

Khairy defended Deputy Prime Minister Zahid Hamidi’s plan to bring in 1.5 million Bangladeshi workers, saying that local youths were shunning jobs considered dirty, dangerous and difficult.

“What DPM said is that the Bangladeshis are limited to certain sectors such as plantations, construction and services, where there is not much demand from local youths.”

Khairy further argued that “raising wages of construction workers to encourage the locals to take up these jobs can lead to pricier homes.”

“The wages of construction workers are said to be high in developed countries, so the locals there are willing to do it. House prices are also high, due to the high cost of labour,” Khairy said on Twitter.

Khairy also said, “a spike in construction labour costs without increase in productivity will lead to higher cost of living.”

This line of thinking is shallow, to say the least.

I acknowledge that paying a higher minimum wage to attract locals is not the silver bullet.

The policy challenge we face is to have higher skills, higher producitivity and higher wages at once.

For construction, Construction Industry Development Board (CIDB) was legislated into existence in 1994 to promote the use of Industrialised Building System (IBS).

The idea is when houses are prefab using precast concrete, one doesn’t need to lay it brick by brick. Half of the construction work will happen in factories and be transported to the sites. Both require higher skills than just unskilled labour.

If all homes are produced through industrialised manner, the demand for unskilled foreign labour will drop dramatically. In fact, the demand for labour as a whole will reduce while producitivity will spike – the virtuous cycle of higher skills, higher productivity and higher wages can be achieved at once.

For Khairy’s information, the (now demolished) Pekeliling flats in Kuala Lumpur and the Rifle Range flats were built using industrialised system in the 1960s.

Why did CIDB fail? Because there was an abundance of supply of unskilled foreign labour. Why so many unskilled foreign labour? Because for every unskilled foreign labour entering Malaysia, cronies make huge bucks out of permits.

Likewise, the role of the government in plantation and agriculture is not to open them to massive number of unskilled foreign workers but to improve research and skill development to help the industry to automate and reduce dependence on labour.

We have long written of the intellectual capacity of Zahid Hamidi but to see Khairy going down the same way is a pain to watch.

For the nation to move forward, we need more intelligent policy debates. I hope Khairy can offer better arguments.

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