KL ranks second in ASEAN labor costs

KL ranks second in ASEAN labor costs

KUALA LUMPUR (AFP): Malaysia, facing a shortage of workers,
has the second-most expensive labor force after Singapore in the
Association of Southeast Asian Nations (ASEAN), a government
study showed yesterday.

In terms of skilled labor, Malaysia was the third most
expensive, after Thailand and Singapore, according to the
Ministry of International Trade and Industry (MITI) study.

The findings were first revealed Wednesday by Minister of
International Trade and Industry Rafidah Aziz at the ongoing
annual MITI dialogue with the private sector.

"However, Malaysia came up tops as far as cost competitiveness
for utilities like electricity and water, and second most cost
competitive for telephone facilities, after Singapore," Rafidah
said.

The study was commissioned to identify and analyze the cost of
doing business in Malaysia and to determine factors that
contributed to rising costs.

ASEAN groups Malaysia and Singapore with Brunei, Indonesia,
the Philippines and Thailand.

The study focused on five industry groups, chemicals and
chemical products, electrical and electronic components,
machinery and transportation equipment, rubber-based products and
textiles and apparel.

Input materials and labor were among the major determinants of
cost competitiveness.

"While local manufacturers presently are able to contain
increases of such costs and sustain their cost competitiveness,
this is being eroded by competitiveness from neighboring
countries that do not face such constraints," she said.

Rafidah advised labor-intensive industries that had plans to
expand to branch into countries like Indonesia, where labor was
abundant.

Malaysia, she said, was now fine-tuning its recruitment of
foreign workers to ensure that they were brought in for selected
industries.

Prime Minister Mahathir Mohamad said on Monday that Malaysia
was trying to reduce its reliance on its estimated one million
foreign workers.

Foreign labor was placing an increasing strain on Malaysia's
social infrastructure, particularly housing, medical and
education facilities, Mahathir said.