9

CHAPTER 2

LITERATURE REVIEW

2.1

Introduction

To date, a number of studies have been conducted on foreign workers issues

and they have covered diversified aspects of it in various ways. Although an issues
in the past, it has remained contemporary. Accordingly there are some studies which
focused more specifically on the issue. In this chapter, it shall review some of the
important studies to provide a very brief idea about the issue of foreign workers in
construction industry.

2.2

Why Foreign Labour in Construction Industry

In the earlier days, most construction workers in the country were locals who
were recruited through the apprenticeship system (Wong, 2003). In this system, a
foreman, usually skilled, will recruit workers within his community, as the need
arises. He is responsible to train the workers, including arranging the worksite,
material and sequence. These workers were usually paid daily, through the foreman
who gets paid for the piecemeal work done or makes fee over each worker under
him.

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In the seventies and early eighties, nearly 70 percent of the foreign workers
were concentrated in the construction sector because the country was experiencing a
construction boom (Ghosh, 1998). During this construction boom, there was a great
influx of foreign workers, predominantly from Indonesia and later, workers from
Myanmar, Bangladesh and Thailand. Most of these workers came in either illegally
or overstayed their visit pass. Azian (2004) also stated that our local workmen are
no longer able to sustain the demand and needs of the industry. The industry in
order to maintain the rapid expansion has to opt for foreign worker.

According to another source, the Malaysian construction industry has relied

on foreign work force since early 1980s (Ahmad, 1996). Foreign labour started with
the plantation sector. Owner argued that they no longer could find local workers
willing to work in their estates because of the better salaries and working condition
in the manufacturing sector. Soon, the construction sector followed the suit. With
this influx of the foreign workers, local apprentices shield away from this trade as
they found working alongside these illegal workers not conducive. Further the trade
was branded as 3Ds job that are Dirty, Dangerous and Demeaning.

At about the same time, local skilled foreman and workers were lured
overseas to countries such as Singapore, Taiwan and Japan where they were paid a
much more higher salary for their skills. This is why the Construction Industry was
left with such a high proportion of foreign workers.

2.3

Basic Data on Foreign Labour

Today, it is obvious that the foreign workers are part of Malaysian society.
The number of foreign workers in the country can only be estimated. Malaysia in
recent years has absorbs large numbers of foreign workers to work in low-paying,
low skilled fields.

11
According to an Economic Report 2003/2004, foreigners constitute 9.9% of
the total labour force (10,514,900) in 2003. Foreign labour has become an integral
part of the Malaysian labour forces, particularly in the construction industry. There
are many estimates of foreign workers in Malaysia but the data on the number of
foreign workers have to be interpreted with caution because there is no foolproof
study or survey giving exact number.

A. Navamukundan (2002) indicated that as at July 1999, the total number of

registered foreign workers according to the government was 715,145 of whom 73%
were Indonesians, 19% Bangladeshis, 3% Filipinos and the remainder from other
nations such as India, Myanmar, Pakistan and Sri Lanka.

However, all the

Malaysians are aware that the actual number of foreign labour far exceeds this
number. It is estimated that approximately 1.5 million foreign labour (both legal and
illegal) work in Malaysia.

It is also estimated by (Ames, 2001) that there were over 230,000 foreign
workers entered the country in 2000, mostly from Indonesia and the Philippines and
others source include China, Bangladesh, Myanmar and Thailand. These workers
are normally employed in jobs critics label the 3 Ds-dirty, dangerous, and
demeaning. In general, low-skilled foreign workers are employed in positions that
most Malaysian simply refuse to do.

The Home Affair Ministry, Datuk Azmi Khalid noted that Malaysia had 1.2
million legal foreign workers but estimated that there was one illegal foreign worker
for every legal worker (The Star, 07 May 2004).

Besides, Human Resources

Minister Datuk Dr Fong Chan Onn added that the number of foreign workers
registered with the ministry currently topped 1.2 million, excluding illegal ones in
The Star (06 May 2004).

Dr Tan Seng Giaw (2002) stated that we do not know the actual number of
illegal immigrants. It may be one million (1,000,000) or more. Every night, they

12
may land at over seventy (70) places in Malaysia. There were an estimated 1.2
million illegal workers in the country.

According to The Star (05 August 2004), it is estimated that the number of
foreign workers could rise to as high as five million by 2010 if employers continued
to depend on them. As long as there is an unlimited supply of foreign labour,
employer will continue to use them to their advantage.

2.4

Causes Influencing the Inflow of Foreign Labour

Why foreign labour find Malaysian attractive to work in?

Generally,

Malaysia has a tolerably pleasant moderate climate and the people are friendly, cooperative and helpful. Politico-economic stability is another very tempting factor
influencing the inflow of foreign labour. The country always presents an open and
liberated atmosphere. The permissive and free society of Malaysia is a heaven for
foreign workers.

In addition, Malaysia is attractive because of its relatively better economic

performance and prospects for foreign labour. Due to greater industrialization and
urbanisation in the economy there has been a massive rural-urban migration drift,
which in turn has led to an acute shortage of workers.

As a fast developing and progressive nation, Malaysian holds a better

prospect for the prospective immigrants. The demand for labour has been increasing
continuously in tandem with economic progress. A. Namukundam (2002) also
indicated that the accelerated economic development programmes and the sustained
high economic growth rates in Malaysia caused the influx of foreign workers to
meet the increasing demand in the Malaysian labour market.

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2.4.1

Inflow of Foreign Labour in Construction Industry

Many causes have been responsible for the inflow of foreign workers in
Malaysian construction industry. Among the causes of the inflow of foreign workers
in construction industry are as follow:-

a) Constructions jobs poor images, poor working conditions and local prefer
easier jobs

Lets be realistic, Malaysian prefer easier job, foreign labour are mainly in
the lower end, heavier kind of job. In construction industry, for instance very few
local want to work in the industry. They prefer to take employment in a comfortable
environment like air-conditioned factories and office which offer white-collar jobs.

Furthermore, the working condition in construction sector is very poor. The

poor image of construction industry such as absence of job security, poor
management, insufficient promotion, and lack of opportunity for career
advancement make locals decline to join this sector.

b) Construction jobs known as 3 Ds job

Another reason why the Malaysian construction industry felt the need for
importing workers from abroad is due to foreign labour do what has come to be
known as 3 Ds works -dirty, dangerous, and demeaning in Malaysian that local
Malaysian shy away from this type of job. They are generally not interested in the
jobs currently held by foreigners.

Furthermore, job in the construction industry are becoming unpopular among

the working population in newly industrial countries as they are more risk-prone
than others jobs. The accident rate at construction work place is much higher as
compared to other industry

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c) Low wage structure for construction jobs

The locals shun employment in construction sectors also due to the wages
are deliberately kept low and low wages for high risk jobs. Some companies are
deliberately keeping salaries low to encourage a high turnover of locals and
convince the authorities to allow foreign labour.

According to Zehadul et al. (1999), the uncontrolled presence of foreign

labour plays a significant role in maintaining the low wages levels in construction
industry, for instances very few local labour want to work in construction industry.

d) Higher education levels

Equally important is the fact that with higher education levels, nowadays, it
is too common for local young generation to study until Penilaian Menengah
Rendah (PMR) level and even Sijil Pelajaran Malaysia (SPM). Therefore, the local
youth in general are beginning to shun 3 Ds jobs that are dangerous, dirty and
demeaning.

This created many opportunities for foreign labour and employers started to
import workers from neighbouring countries to perform low paying manual jobs in
construction industry.

e) Employer can easily bring in foreign labour and prefer employing foreign
labour

Employer can easily bring in foreign labour, as long as there is an unlimited

supply of foreign labour, employer will continue to use them to their advantage.
According to A. Navamukundan (2002), it is obvious that employer can select their
workers from amongst either locals or immigrants. Employers are cost-conscious

15
and only choose workers who are not only inexpensive but also have the necessary
skills and comply with strict discipline and hard work.

Therefore, the preference will be for foreign labour who will accept both
lower wages and worse terms and conditions of employment, as their primary
objective is to earn as much money as possible within a short span of time. Michael
(2001) also stated that newly arrived labour willing to accept lower wages and less
attractive conditions. The foreign labour paid less than local citizens even if they
perform the same jobs.

MTUC president Zainal Rampak was stated that employers were more
inclined to hire foreign workers who were prepared to accept low wages. National
Local Authorities Employees Association Chairman Abdul Rahman Mahad, who
gave similar views, added that besides getting cheaper labour from foreign workers
employers also hired such workers as they were prepared to work longer hours.
(The Star, 05 August 2004)

The employers who took the foreign workers in construction were only
interested in cheap labour because the firms did not have to pay out EPF and Socso
benefits. According to Tey (1997), it is believed that there are no real shortages but
employers prefer aliens especially illegal ones because they can easily be exploited
as they have no recourse to law and justice.

2.5

The Impacts of Employing Foreign Labour in Construction Industry

There are various impressionistic views about the impact of foreign workers
on the economy and society of Malaysia. People generally tend to feel that foreign
workers are creating problems in the country and the economy.

Malaysia Construction firms were experiencing many problems due to

foreign labour. Recently, the problem of foreign labour in construction industry is

16
again on centre stage. The following are the various impacts of foreign labour in
construction industry:

a) Cultural Pollution

Most foreign workers are peaceful. They want to earn money to send home.
In most cases, concern over foreign labour is linked to anxieties over what some
have characterized as cultural pollution and over foreignisation (Weiner, 1990).
They may change the cultural and social orders of the normal practice of the locals
in construction industry.

b) Social Problem

Legal and illegal foreign labour also pose many social problems and make
impacts on the locals. They create many social problems like spread of diseases,
theft, robbery, cheating, rape, killings, illegal settlements and so on. They form
syndicates. If there are no syndicates, legal and illegal immigrants cannot arrive in
Malaysia.

According to Tey (1997), as shown by unpublished police records at the

police headquarters in Bukit Aman, between 1985 and 1991, foreign labour
accounted for between 14.7% and 18.2% of all murders committed in the country.
The figure for gang robbery was between 32.7% and 48.2%.

c) Political Stability

The inflow of legal and illegal workers poses many implications on political
issues. The local population is fearful for the countrys harmony, security, social,
economic and political stability. The locals are fearful of becoming a minority
group unable to express views, influence or control the country politically if the
influx of foreign workers on such large scale.

17
The precarious balance between the Malay and the Chinese, Indian, Kadazan
and Iban communities could be easily distorted with continued arrivals of foreign
labour into the country. Indonesian migrants are said to be similar to Malays and in
most cases they can be easily mistaken to be Malays. Meanwhile, migrants from
Philippines are similar to the Chinese and Kadazan, and those migrants from India,
Pakistan and Bangladesh are said to be similar to the local Indians. Therefore, the
Government must keep an eye on them.

d) Economic Issues

The foreign workers have had an impact on the wage structure, labour
market, competition with locals.

Another perceived bad impact is the high

remittances sent out by foreign workers to their home countries.

Foreign workers also thought to be responsible for the higher rate of inflation
because of their increased demand. They enjoy public goods without paying taxes
and user fees. As such they become free-riders in the Malaysian economy. They are
ensured health and other facilities without corresponding payments.

However it cannot be denied that the use of temporary foreign labour enables
the rapidly growing economics and societies to fill manpower needs in dead-end,
low status, low wage sectors of the economy such as construction sectors (Zehadul
et al., 1999).

e) Low wages for local workers and Taking jobs away from locals

Womens Workers Association President Silam Hassan (2004) claimed the

problem of foreign workers stemmed from the Governments open policy which
drew large numbers of outsiders to the extent that local workers had to compete with
them for jobs. As a result of the inflow of foreign workers in the construction
industry, the wage rate for local workers has gone down.

18
Foreign workers are taking over work from locals. In construction industry,
the foreign worker going into sub-contracting work, where there is a lot of money to
be made. That is why they can build big houses and take over Malay reserve land.
Besides, the presence of the illegals create problems also since illegals are not
constrained by rules and regulations and are free to infiltrate into any jobs so long as
the employers are willing to accept them.

They also make inroads into jobs not designated for them, thus putting them
into direct competition with locals.

The Government should be strict about

repatriating foreign workers who are not needed because they are taking jobs away
from Malaysians.

f) Foreign labour caused works delay

Construction industry is labour intensive industry, it depends on large

number of foreign labour. According to Economic Report 2003/2004, The New
Immigration Act 1995/63 (Amendment 2002), which came into effect on 1 st August
2002, about 318,300 illegal immigrants were deported in 2002. This has caused
construction activities in all stages to slow down. Consequently, there was a labour
crunch that caused costly work delays.

In a move intended to reduce dependence on foreign labour and increase

employment opportunities for locals, the government has shortened the validity
period of work permits to three years. The policy change will seriously affect
human resource planning in construction industry.

Housing Developers Association Malaysia President Datuk Eddy Chen Lok

Loi stated in New Sunday Times (18 November 2001), the industry will become
very shorthanded when foreign workers are sent back as locals are not entering the
industry due to foreign labours make up seventy (70) percent of the countrys
500,000 on-site construction workforce.

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g) Low productivity and quality due to time consuming to train new workers

The reduction of the duration of temporary work permits for foreign workers
from six or seven years to only three years had caused deterioration in the poor
quality of workmanship and low productivity. Foreign labours that have had three
years experience may be replaced by those do not have prior construction
experience, thus resulting in low productivity and poor quality of work. Some of
them were not able to cope with new experience of working on large-scale projects.
Azlan (2004) also mentioned that the lack of quality foreign labour that have been
hired is one of the main problems in construction industry.

The companies that lose workers will need to hire new ones, who are likely
to be unskilled and inexperienced. That means the employers have to spend time
and resources to train these new workers. As indicated in Master Builder (Kok,
2003), upon commencement, the foreign labour would require another 2 to 3 months
to go through an orientation or learning curve period before they become productive.

Furthermore, on-the-job training will take around seven to eight months then
only the foreign workers will begin to contribute to company. To some extent, the
training was difficult, as most foreign labour were paid daily wages and were
reluctant to undergo training due to loss of pay.

h) Heavy expenses in the recruitment process and long permit processing times

Malaysia introduced harsh new immigration laws in August 2002, the

construction industry is suffering from an acute shortage of foreign workers
throughout the nation. As a result, this has caused construction activities to be
delayed albeit contractors trying to the best of their endeavours to recruit new
workforce. The central problem now appears to be the long processing time taken
by the authorities to grant the foreign work permit (Lim, 2003).

Contractors

securing new jobs have problems mobilizing new workers on time, due to this long
work permit or recruitment process.

20
As indicated by Tey (1997), the legal importation of foreign labour was and
still time consuming and costly. Kok (2003) also summarised that based on current
experience, it takes about 2-3 months on a best case scenario to go through the entire
administrative process, commencing from obtaining a work permit from the ministry
of Home Affairs to the foreign workers gaining physical entry into Malaysia to
work.

Therefore, it is not cost effective to send foreign workers home after just
three years because of the heavy expenses in the recruitment process. Meanwhile,
the process to bring in foreign workers is tedious and time consuming. Furthermore,
a lot of cost is involved in medical examinations, transportation and levies. Thus,
there is pressure in the system for employers to employ illegal foreign labour and to
dodge the levies and charges which are incurred on the employment of legal foreign
labour.

i) Accommodation problems for foreign labour

Accommodation for foreign labour was problematic, if contractors do not

have any more new jobs after completion of their existing work. It is now apparent
that due to the uncertainty of projects and the short-term nature of most construction
projects, contractors find it difficult to maintain long-term employment for their
workforce once they are imported into country.

As mentioned by Azlan (2004), there was a burden for the construction

companies to maintain foreign construction labour both financially and
administratively when projects are completed, and/or during the period where they
have no new projects.

2.5.1

Some Positive Impacts of Foreign Labour in Construction Industry

21
In recent years, there has been a huge cry that the foreign workers have
created enormous socio-economic problems in Malaysia. However, it is not to deny
the positive impacts of foreign labour on economic issues. Assuming that there are
many problems the evidences (Chan & Moha, 1998) indicated that there are also
direct and positive impacts of the foreign workers.

The foreign workers have benefited in the income development. Foreign

workers were immensely beneficial to the economy.

This shows the positive

quantitative contribution of foreign workers to Malaysians economic growth. The

implications of foreign workers on the Malaysian economy have been immense
especially since the late 1980s (Zehadul et al., 1999).

Wage structure is one of the significant examples. The uncontrolled presence

of foreign workers plays a significant role in maintaining lower wage levels. This
also indicated by Sidney (1996), foreign labour offer an unending stream of cheap
labour that can keep wages low and growth high.

Generally speaking, foreign workers contribute to the economy by supplying

a cheaper labour force. As a matter of fact, foreign workers usually receive a lower
salary than local workers and the difference can help to maintain the decrease in
production cost. Oleg (2002) stated that the attracting cheap workforce means
cutting production costs, hence the production cost for construction development is
kept low which is an advantage in the foreign workers

Malaysia, which have tremendous shortages of manpower in construction

industry, the importation of foreign workers could initially fill up the vacancies or at
least minimize the extent of manpower shortage. The supply of this additional
labour force fulfilled the urgent demand for labour which could not be met so
quickly and at a cheaper rate.

More importantly the foreign workers accepted those jobs which are not
often welcome by the local workers especially the construction jobs that known as

22
3Ds job. Moreover, if we assume that the foreign workers are equally productive as
the local workers, one can safely say that foreign workers make net positive
contributions.

It has already been brought to our notice that the value added of dollar spent
on labour in Malaysia is around five times in the manufacturing sector (Ghosh,
1998). If this is true, then there are sufficient positive value-added effects of foreign
workers in the Malaysian economy.

2.6

Ways to Minimise the Negative Impacts of Employing Foreign Labour

In all probability, it is belief that the demand for foreign labour is going to
escalate in near future in construction industry. So what should be the government
policies and strategies? The strategy behind the policies is to stop the inflow of new
migrant labour into the country, as well as to reduce the number of migrants already
in the country. How can this be done?

Due to the above situation, the authority governing the industry with the
assistance of construction associations has formulated several proposals to overcome
the problems faced by local contractors when dealing with foreign labour in
construction industry.

a) Strengthening national security to reduce crime rate

The government is concerned about the influx of illegal immigrants, which it

says has contributed to the crime rate. The influx of illegal immigrants had created
various problems and was a threat to national security. The Rela member will be
empowered to search travel documents, make arrests and detain, and enter premises
where illegal immigrants are suspected to be hiding, but this have to be closely
monitored to ensure that they do not abuse the new power.

23

Besides, the authorities also plan to issue guidelines to employers to separate

foreign workers' quarters according to their clans and nationalities to avoid
bloodshed when tempers flare. The construction companies would be advised not to
put more than 50 workers in one kongsi or temporary village for construction
workers (New Straits Times, 10 June 2004).

This is to avoid the cases from

happening such as the armed clash involving some 50 men from two groups of
Indonesians in a Selangor village.

b) Government to tighten hiring rules of foreign workers

The country is bringing in more foreign workers than needed by industries

and the Government has to plug loopholes that cause the oversupply. Therefore, the
government has adopted drastic measures recently to repatriate immigrant workers,
especially the illegal immigrants. An amnesty was given to all illegal immigrants
who voluntarily returned to their country by the end of July 2002.

The foreign workers were needed to fill the gap left by local and not as a
long-term measure to enable employers to cut cost. Therefore, the Government had
identified several measures to make it harder for agencies to bring in foreign
workers and to reduce countrys dependency on foreign workers.

Among them are:

1)

Stopping the system of supplying foreign labour through contractors;

2) Requiring employers to apply for approval from the ministry to hire foreign
workers based on need;
3) Closely monitoring companies planning to introduce voluntary separation
schemes (VSS) to prevent them from being used as a guise to lay off local
workers; and
4) Requiring employers to advertise vacancies for at least two consecutive days in
major local dailies to allow local workers the chance to secure employment.

24

c) Cut foreign labour via minimum wage system

Recently, there was no national minimum wage law applicable to the

Malaysia in construction industry. Basic wage rates vary according to location and
vary from company to company (MIDA, 2004). The Government should implement
the minimum wage scheme in all job sectors to reduce the intake of foreign workers.

This scheme has to be enforced as the increasing number of foreign workers

in the country was only benefiting the employers and agencies that brought the
workers in. The employers who took the workers in were only interested in cheap
labour. This phenomenon was expected since the employers were more inclined to
hire foreign workers who were prepared to accept low wages.

d) Permits only for trained foreign workers

Nowadays, the foreign workers need to undergo a two-week course to

familiarize themselves with Malaysian laws and cultures in bid to reduce crime,
fights. The move aims to reduce social problems such as crimes and brawls
involving these workers who do not understand the Malaysian way of life.

Malaysia now also requires newly arrived workers to attend a course on the
Malay and English languages, besides attend familiarization course on local culture,
before issuing them a visa. New guest workers would have to receive a certification
from the National Vocational Training Council stating that they have undergone the
familiarization course before they can be issued an entry visa.

e) Government streamlines procedures for employing foreign workers

The approval for foreign workers in all sectors will only take two weeks once the
Immigration Department fully implements the online application system. Under this

25
Immigration Department Electronic Application System (IDEAS), employers can
sign up and be linked to the department for easy and hassle-free application.
With this, individual employers and representatives of agencies need not
travel to the various departments to submit their applications, hence cutting cost,
saving time and preventing loss of documents, but, employers are required to
register themselves with the department first before getting user ID and Password
for access to the online service.

Under the current manual submission procedure where much bureaucracy is

involved, it takes up to three months for approvals which will possibly causing delay
in mobilizing new workers on time.

f) Local first policy

According to Malaysia Employment Act, the employer is prohibited to

terminate the contract of service of a local employee for the purpose of employing a
foreign employee.

Where an employer needs to reduce his workforce due to

redundancy, he shall not terminate the services of local employees unless he has first
terminated the services of all foreign employees in a capacity similar to that of the
local employee (Rajkumar, 2001)

The Ministry should monitor the situation closely and ensure that only
employers who have really tried to recruit locals but failed are allowed to hire
foreigners. Industrial Relations Department should also be given the power to stop
companies from retrenching permanent employers while keeping foreign labour.
Human Resources ministry must ensure that foreign labours are terminated before
permanent staff can be retrenched.

g) Implementation of Green Card system by CIDB

The Construction Industry Development Board's introduction of the "green

card" system is a safety induction certification and basic skilled identification for

26
construction site personnel. They should put in further efforts and improvement on
skilled status to upgrade the professionalism and image of the building sector to
make it more competitive.

CIDB chief executive Datuk Abdul Rahman Abdullah (2004) said that the
green card system was also an indirect way of helping to weed out foreign workers
who are employed illegally in the construction industry. This is due to in order to
obtain the green card, they would need to first have a work permit. Thus, once the
law making the green card compulsory is passed, the issues of contractors engaging
illegal should not arise.

h) Construction Labour Exchange Centre Berhad

Construction Labour Exchange Centre Berhad or in short CLAB, is a nonprofit organization that was established on November 13, 2003 pursuant to the
decision of the Jawatankuasa Kabinet Pengambilan Pekerja Asing (JKK-PA) (Azlan,
2004).

CLAB had been set up to look into shortage of construction worker as the
numbers of foreigners were reduced. Initially CLAB, can absorb excess foreign
workers in the country or those workers who have already attained some skills
would be retained in the country, instead of being repatriated and avoid bringing in
new unskilled workers when they have no more jobs or does not need some workers
of certain trades.

CLAB can also provide facilities to upgrade the workers skills either on or
off-site. Over time, contractors shall still engage their own core workforce and can
turn to CLAB for additional or skilled workers when necessary. CLAB should
ultimately only maintain skilled workers.

27

According to MBAM (2004), CLAB basically has the following functions:

Absorption of surplus legal workers in the construction industry;

Placement of absorbed workers with qualified contractors;

Provision of enhancement workers with qualified contractors; and

Supplementary recruitment of foreign workers to meet the needs of industry.

i) Industrialised Building Systems (IBS)

The government encouragement to all the employers to mechanise and move

into less labour intensive processes has not achieved the desired result. On the
contrary, the demand for the foreign labour is increasing by the day (Ahmad, 1996).

The majority of foreign labour brought into the construction industry were
wet trade labour involved in concrete, brick, and wood works.

To reduce

construction industry dependence on such foreign labour, we must change the way
we work by reducing wet trade in the construction process. This could be achieved
through implementation of the Industrialised Building Systems (IBS) Roadmap
2003-2010.

By combining IBS with modern management technologies, the local skilled

workers would fill the vacancies. They should adapt higher technology to lessen the
dependence on foreign manpower. CIDB would give free training to locals so that
they can replace the foreign workers and help the construction sector move towards
using new technologies. The IBS Roadmap promises to reduce the number of
workers at construction sites, usage of material and wastage.

Conventional technology that is being used needs a lot of manpower, causing

us to be dependent on foreign workers who are mostly unskilled. As a result, not
only is the quality of workmanship being compromised but we also lose out in terms
of money flowing out of the country. With the IBS, wet trade workers can be

28
reduced and construction works focused on the use of the mechanisation and
prefabrication.

Besides, the construction world is now beginning to recognize the

advantages to be gained by integrating fabricated steel and precast concrete with site
cast concrete, much less labour is required on building sites. This result in the
hidden cost of moving labor around tall or large buildings being reduced and other
collollaty costs such as catering, health and security being lower (Peter, 2004).

The government even stopped offering incentives to labour-intensive firms,

turning its attention instead to the development of strategic high technology
industries (Rajah, 2001).

j) National Vocational Training Council (NVTC)

To cater to the construction sectors expanding demand for technically

trained workers, the Malaysian government has taken measures to increase the
number of engineers, technicians and other skilled personnel graduating each year
from local. The National Vocational Training Council under the Ministry of Human
Resources formulates, promotes and coordinates Malaysias vocational and
industrial training strategy and programmes in line with countrys technological and
economic development needs (MIDA, 2004).

The government has been saying for some time now that labour intensive
should turn to modern technology to reduce their dependence on foreign labour. In
order to overcome the shortage of labour and not to depend on foreign labour, the
local contractors must change their construction techniques from labour intensive to
technology intensive.

Thus, the workers have to be retrained to handle new

technologies. It can be done through the training programmes provided by NVTC.

A. Navamukundan (2002) indicated that government should embarked on

policies to allow the privat sector to become more active in education and training to

29
improve the available training systems to cater for current and future needs. Besides,
special incentives must be given to employers and worker for retraining of workers,
so that they can acquire new skills, which will respond to changes in demand for
skills in the labour market as a result of changes in technology and organization and
methods of work (MIDA, 2004).

2.7

Summary

The construction industrys dependence on foreign workers cannot be

reduced in the short-term. However, a clear plan for gradual phasing out of foreign
workers over a realistic time frame should be put in place to allow industry players
to make the necessary adjustment gradually.

In the longer term, all players involved in the construction sector need to
seriously explore avenues to attract local youths to enter the construction industry by
improving the image and working environment and this implies offering competitive
wages and benefits, improved work-safely procedures, and instilling a sense of pride
in construction work.

Concerted efforts need to be put in place to promote higher buildability in the

industry through the promotion of new technology such as buildable designs that
allow the use of prefabricated materials to enhance productivity and efficiency.

Malaysia must take cognizance of the experience in South Korea where

despite its success in rapid economic growth and industrialisation, South Korea has
never resorted to foreign labour (Ahmad, 1996). Similarly Singapores dependence
on foreign labour has come in so easily, our dependence on them has become more
acute.