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Centre for Market Education chief executive Carmelo Ferlito said the move will definitely have a positive effect on Malaysia.

KUALA LUMPUR: The arrival of Indonesian migrant workers is set to boost productivity and profitability of businesses in Malaysia, especially in the plantation, manufacturing, construction and services sectors.

Indonesia lifted its restrictions on the entry of its workers into Malaysia with effect from yesterday.

Centre for Market Education chief executive Carmelo Ferlito said the move will definitely have a positive effect on Malaysia.

“Many sectors are struggling to cope with the economic recovery because of the lack of workers and this is a move that is going to help them.

“Hopefully, it’s a start towards a higher degree of liberalisation in the labour market at the regional level,” he told StarBiz.

Ferlito said businesses cannot survive on a “stop-and-go measure” according to “regional governments nationalistic moods”.

CGS-CIMB Research said the resolution on the migrant freeze will allow the resumption of Indonesian worker intake in the next few months to alleviate the current foreign labour shortage issue.

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“This will be positive for the plantation, manufacturing, construction and services sectors in Malaysia as it will help boost productivity and profitability of the businesses.

“The recruitment of plantation workers from Indonesia is critical to boost fresh fruit bunch yields, raise crude palm oil output and reduce the cost of production of Malaysian estates,” it said.

MIDF Research in a recent report noted the construction industry currently needed about 600,000 foreign workers, in light of the sector ramping up operations with the reopening of the economy and as it gears up for upcoming infrastructure contract rollouts, starting with the MRT3 project in the fourth quarter of this year.

“Pre-Covid, the construction sector’s number of filled jobs peaked at 1.31 million people in the fourth quarter of 2019.

“This dwindled to 1.22 million people as of the first quarter of 2022, a reduction of 6.8% or 88,600 people, according to the Statistics Department’s quarterly employment statistics.

“A shortage of labour causes delay in work progress, which may lead to penalties or liquidated ascertained damages claims. Contractors have no recourse in these situations.”

Malaysia University of Science and Technology professor Geoffrey Williams acknowledged the lifting of the migrant worker freeze will benefit local construction projects, adding however that some have been shelved while others are already delayed.

Malaysia University of Science and Technology professor Dr Geoffrey Williams.