Malaysia should heed the gentle warning of Japanese ambassador

Press Statement By Penang Chief Minister Lim Guan Eng on 18 March 2010 In Komtar George Town, Penang.

Malaysia should heed the gentle warning of Japanese ambassador Masahiko Horie of losing out in foreign direct investments from Japan if the manpower shortage faced by the manufacturing sector prolongs and energy supply disruptions by Tenaga Nasional Bhd are not resolved. Penang is not surprised that these were the same complaints made by Japanese companies located here.

Japan was the highest contributor in terms of FDIs in Malaysia over the past five years, topping the list in 2006 (RM4.412 billion), 2007 (RM6.523 billion) and 2009 (RM7.041 billion). For 2005 and 2008, Japan contributed RM3.67 billion (second on the list) and RM5.60 billion (third), respectively.

Horie is correct in saying that Japanese companies, especially those in the electronics and electrical (E&E) sector were having a hard time employing production operators who were crucial to their operations.

This is evident by the fact that Penang does not face a shortage of jobs but a shortage of workers. When the Penang state government took the initiative in 2009 to establish the RM 10 million Career-Assisted Training centres or CAT centres to match jobs and workers by helping find jobs for school-leavers and those retrenched following the global economic crisis, the expected “good business” did not materialize. Instead there were more jobs chasing workers with employers asking for workers by a ratio of 2 job vacancies registered for every worker registered.

The Penang state government regrets that in trying to face problems of worker shortage responsibly, especially amongst professionals and engineers, some quarters chose to deny that this problem exists. Now the Japanese Ambassador has indicated that Japanese investments not only may not come to Malaysia but existing companies throughout the country may also relocate.

Penang has held regular meetings with TNB Penang to resolve the erratic power supply which would affect production when the power dips even though there is no power disruption. In view that these problems are perceived to still continue despite assurances by TNB that the problem is resolved, I shall be directing that a meeting be held between all parties, including with the TNB top management in Kuala Lumpur if necessary.

Minister of International Trade and Industry Datuk Mustapa Mohamed should take immediate pro-active steps to improve the competitiveness of Malaysia and overcome these problems. He should be serious about an immediate resolution following the revelations by United Nations Conference of Trade and Development or UNCTAD Report that Vietnam has for the first time surpassed Malaysia’s Foreign Direct Investments(FDI) last year. Whilst it is not surprising that Thailand and Indonesia has exceeded Malaysia’s FDI, to be overtaken by Vietnam only shows how far Malaysia has fallen behind.

Penang has taken some long-term solutions to resolve the workers shortage such as the establishment of the Penang Science Council to encourage more students to take up science disciplines and the over 200 acres Educational Hub of Excellence in Balik Pulau. However the problems of manpower shortage and power supply disruptions can only be immediately resolved by the intervention of the Federal Government.

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