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.