Why unemployment rate is increasing in Malaysia?
Sunday, October 18, 2009 9:19This article is taken from our latest E-Newsletter – Aug’09 to Oct’09. You can download a copy here.
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Every year in August, it is declared as a historical month in Malaysia. Previously on the 31-August, we have celebrated our 52nd anniversary of independence.
Malaysia has been independent for 52 years from the British regime. For the past 52 years, we have evolved from an agriculture and mineral producing country to a developing country focusing on many economy sectors. As a result Malaysian and also foreigners enjoy many opportunities of employment in this beloved country. To a certain extend, many foreigners willing to migrate to Malaysia legally and also many illegally to take advantage of these fertile opportunities.
Ironically, even though there are many job opportunities in Malaysia, the projected 2009 unemployment rate among Malaysian is above 4%. That is an increase of 1% from an average of 3% recorded from previous years. From my personal observation, there are several contributing external & internal factors which I will briefly share in this E-Newsletter.
“Ironically, even though there are many job opportunities in Malaysia, the 2009 projected unemployment rate among Malaysian is above 4%.”
Obviously the external contributing factor is due to the world economy meltdown. Malaysia as a developing country rely heavily on foreign direct investment (FDI) especially from countries such as Singapore, Americas, Europe, Japan and etc. Most of these FDI are into the manufacturing sector. Many major multinational companies (MNC) in Malaysia have announced layoff plans including factory and office shutdowns to mitigate the impact of the economic slowdown. Since the presence of manufacturing MNC in Malaysia are significant, the layoff plans contributed to the increase of the unemployment rate.
Internally, there are several factors that contributed to the increase of the unemployment rate such as job competition & matching.
Malaysia is a heaven for job seekers who is not so particular on what job is available. As long there is a job, they will just take it. This is very true for foreigners especially from less developed countries such as Indonesia, Bangladesh, Nepal, Myanmar and many more. Their presence have created a competitive job market in Malaysia especially among the blue collar jobs where most of employers prefer to hire these foreigners rather than Malaysian because of relatively cheaper labour cost and easier to manage.
“Malaysia is a heaven for job seekers who is not so particular on what job is available. As long there is a job, they will just take it.”
Another contributing factor of higher unemployment rate in Malaysia is due to job matching. Even though there will be about 200-300 thousands university/college graduates will be entering the job market in 2009, the competency of these graduates is still a concern where their qualification can’t directly match the needs of the employers. This is a known fact that the government is putting more attention financially to provide platforms for graduates to be train & place in suitable job market. To make it more effective, these graduates themselves has to realize that they need to adapt to the needs and wants of their future employer. Bottom line, they need to market their career smartly for their own & their future employer success.
Arsento says:
October 19th, 2009 at 5:24 am
I liked it. So much useful material. I read with great interest.
X'roy says:
October 20th, 2009 at 11:04 am
You fail to see the major reason behind this unemployment scenario that is, the country is fast becoming a failed state, it is becoming less attractive to FDI and other SE Asian nations seem to be getting the edge on us. Thailand already has, and more and more Companies in spite of the present political turmoil in Thailand are heading for Thailand, Indonesia and now even Vietnam, whilst many in Malaysia are either shutting down or sizing down, and this is the cumulative affect of corruption in this country at the highest levels has become the norm rather then the exception.
Remember we had foreign workers long ago and even with them unemployment was low.
We have also created a society that does not value dignity in labour, and how can there be, when at every turn the question of a minimum wage is blocked by the Government, imagine people still working for salaries as low as RM350/ per month, and the Government encouraging it just out of sheer greed because many of those in government have vested interest that it be that way, it is all from corrupt practices.
Take a look at all our financial scandals both revealed and unrevealed and you’d find that so much money, peoples money have gone to line the pockets of so few in high places.
We should be able to see the big picture, address the shortcomings and take affirmative action to stop and weed it out. Only if that is done will beloved country prosper.
We should not shut our eyes and allow this greed of a few who wield so much power that they can even control the Police,the judiciary, the MACC and the media in pursuit of their lust for wealth, destroy the nation, and that is 52 years after Merdeka.
Yusoff says:
October 25th, 2009 at 8:29 am
X’roy, thanks for your feedback and I acknowledge your inputs. When I wrote this article, I avoid political influence and also racial discrimination. Looking into the historical trend of unemployment rate since 2007, Malaysia has recorded above 3%. The question now is why is this so? Is 3% has been accepted as a norm even though economy is booming in 2007 – mid 2008?
Without drilling down into the details, the 1st impression could be due to the political abuse but from the perspective of the job seekers themselves, nothing much they can do about it. Why not learn how to be successful in their job search since the government is supporting them to do so.
With regards to the decline in FDI, there are several factors from security, incentive, politic, manpower and etc. No doubt, the government has to improve them all but with the deficits including the increase of loans taken by the government, not sure how much they can afford to do next year.
In Stephen Covey 10/90 Principle, only 10% of things happening around us is determine by the environment we are living in while the load of 90% is determine by our action. Hence make use of the 90% to the benefit of us all.