Penang needs more skilled workers and usable graduates . Sarawak and Sabah too .

24Mar10

Malaysian Insider published an article by Sheridan Mahavera on the subject of “ Penang’s future in Putra Jaya’s hands .

Mahavera wrote that during the GFC Penang did not do too badly. Some people were expecting the many manufacturing facilities would close down and there would be a mass unemployment. Fortunately things turned up well for Penang as unemployment was just about 5000 +.
Mahavera concluded that Penang should take the opportunity now to improve the environment and make it more conducive for the manufacturers to be more efficient and make more money .

What Penang needed to do are in the words of Jeffrey Chew ( Malaysia Insider dated March 23 to quote him “ The recent statement by Japanese ambassador Masahiko Horie should serve as a wake up call to the Federal Government that it is time to address the issues of human resources constraints and inconsistent supply of electric power for the manufacturing industries in Malaysia.”

These are only two things i.e. skilled manpower and supply of power mentioned. But of course there are many more such as physical infrastural development , the laws and above all Politics .

It is the shortage of skilled workers in Penang that has discouraged a number of big investors to Penang. To quote Mahavera’s article “In fact, in the coming years, warns investPenang’s Executive Committee Chairman Datuk Lee Kah Choon, money and companies may gradually drain out of the state and also the country as Malaysia loses what makes it attractive in the first place — its talented workers.”

Shortage of skilled workers is a serious matter and it is related to the question of brain drain.

Our skilled workers are being drawn and driven away from Malaysia for various reasons.

Mahervera continues “How deep Malaysia is sliding into the middle-income trap is a joke, mused a Penang-based senior reporter for a major daily. The country exports all its skilled and qualified labour to places like Singapore, Australia, the United Kingdom and imports unskilled workers for its factories, plantations and construction yards.
The state government, the business associations and the unions realise that Malaysia has to extricate itself from that trap but the hardest part, of course, is actually doing it. “

I have blogged sometime ago that we in Sarawak has seen many of our young graduates and skilled workers being forced to leave the State because of the lack of employment opportunities .

I would say that as much as 50 % to 60 % of our local graduates are forced to seek employment in West Malaysia and Singapore . Some have immigrated to other countries.

One newspaper reported that over 40 000 to 50 000 Sarawak’s Dayaks workers are staying and working in Johore and I would to add that there could be another 30 000 to 40 000 workers in other parts of West Malaysia ,

There goes Sarawak skilled workers and without them we too like Penang will not be able to grow. Our weakness is employment opportunities in the private sector and we owe it to ourselves to attract and generate investments.

Is the present State Government worried about this ?

Below is an extract of Sheridan ‘s article which appeared in Malaysia Insider .

Malaysian insider March 23

http://www.themalaysianinsider.com/index.php/malaysia/57190-penangs-future-in-putrajayas-hands-

Penang’s future in Putrajaya’s hands

By Sheridan Mahavera

PENANG, March 23 —When it suddenly packed up and left in July 2008, the Nikko Electronics factory in Seberang Prai left close to 1,000 workers in the lurch and sent shockwaves through the business community.

Malaysia would finally be taking the hard hits of the economic downturn it was feared, after months of coasting by while countries like the United States saw tens of thousands of people losing their jobs.

Over the next year and a half, none of that materialised. The Nikko plant, it seems, had been operating at a loss for the past three of its 15 years in Malaysia.

Then in December 2008, Dell Computers announced it was offering 700 workers at its plant in Bukit Minyak a voluntary separation scheme (VSS). It raised eyebrows but there was still no cause to worry.

The nightmare of massive lay-offs and factory closures did not occur but this does not mean that the industrial behemoth, that is Penang, can be complacent.

Many factories and companies had shed excess workers during the recession as they restructured and retooled their operations, says Federation of Malaysian Manufacturers Penang branch chairman Datuk O.K. Lee. The more high tech its operations and products became, the fewer workers were needed.

At the same time, companies forced pay cuts on their employees and transferred them out of non-active divisions instead of laying them off.

Those painful adjustments allowed factories to resize to meet lower demand from a still sluggish United States market but most have gone back to normal work hours and salaries by March this year, says Lee.

The outlook for Penang is not glum, says Lee, but that does not necessarily mean it’s bright skies and soaring growth ahead.

In fact, in the coming years, warns investPenang’s Executive Committee Chairman Datuk Lee Kah Choon, money and companies may gradually drain out of the state and also the country as Malaysia loses what makes it attractive in the first place — its talented workers.

Better flat than nothing

Mohd Nasir was a production operator for five years at a factory that makes medical instruments but that changed when the plant started getting fewer orders starting early last year.

Then in May his bosses transferred more than half of its production line workers out because they weren’t getting enough orders to justify running those operations at full capacity.

The workers were put in other departments such as technical maintenance, where Mohd Nasir ended up. The company even cut down the number of working days from five to four and almost everyone took salary cuts.

“It was rough trying to adjust,” says the 29-year-old who only wants to be known by his first name for fear he might upset his bosses.

“My take-home pay was less,” says Mohd Nasir, adding that he initially thought of quitting but stuck it out as there weren’t better prospects elsewhere.

His resilience paid off. Starting this month, the factory brought back normal work weeks and salaries have gone back to normal.

Though he still misses his old production line post, he is thankful that at least, he still has a job.

This had been the trend in the factories of Bayan Baru, Bayan Lepas and Seberang Prai, the steel heartlands of Penang’s manufacturing sector.

The Penang arm of the Malaysian Trades Union Congress says aside from the Nikko plant, they haven’t received reports of retrenchments or lay-offs during the recession.

The reason could be that the scale of lay-offs, in proportion to the size of the factories, were small.

In 2008, Penang had about 202,000 workers in the manufacturing sector says a report by the Social, Economic and Environmental Research Institute.

According to investPenang as of November 2009, only 5,231 workers have been retrenched.

FMM’s Lee says many companies cut production by about one third as the recession brought orders down by about 30 per cent.

This has prompted plants like Mohd Nasir’s to slash salaries to prevent laying off workers.

Workers who were retrenched were able to find other jobs as new plants such as those by Honeywell and Ebdam were being opened up, says Lee.

“Overall, Penang’s graph looks flat for 2010,” says Lee. And though government bigwigs will say that the country is on the “path to recovery and growth”, there is a lot of uncertainty and confidence is still low.

Being flat could be good given all the turbulence but that graph could plunge.

Penang needs to quickly transition from a low-tech assembly-line hub that produces things like radios to high value operations such as design and development (D&D) and research and development (R&D), he says.

Though Lee says Penang has tried getting many big names to set up their high-end operations here, many are still only interested in setting up assembly plants.

“The high value ones, they send to Singapore. Why? Because here we have unqualified graduates and workers.”

The rub to that is that those high value operations in places like Singapore are sucking in all the highly skilled and qualified Malaysians.

“We pay peanuts but don’t want monkeys”

How deep Malaysia is sliding into the middle-income trap is a joke, mused a Penang-based senior reporter for a major daily. The country exports all its skilled and qualified labour to places like Singapore, Australia, the United Kingdom and imports unskilled workers for its factories, plantations and construction yards.

The state government, the business associations and the unions realise that Malaysia has to extricate itself from that trap but the hardest part, of course, is actually doing it.

The solution that FMM, investPenang and MTUC agree on, is better human resources but they all have differing ideas on how to cultivate it.

Penang MTUC chairman Abdul Razak Abdul Hamid points to how the absence of a minimum wage system and outsourcing is fuelling the hunger for foreign-worker-driven assembly plants while it dissuades better-skilled locals from signing up.

Companies in Penang which want to lessen their labour costs farm out their operations to someone who can do the work for less pay.

“The outsourced workers take on the same jobs but are paid less, they get no Employee Provident Fund contributions and no medical benefits. But they work in the same factory under the same conditions.

“There are even cases where a company’s workers are told the next day that they will be managed and paid by an agent. Everyone does it, especially all the MNCs (multinational corporations),” claims Abdul Razak.

By suppressing wages, Abdul Razak reasons, companies have to ship in foreigners, who are willing to be paid less than locals, while the locals go overseas.

“Without high wages we will never go high end”



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