Malaysia to reform labor laws to cut 'over-dependence' on foreigners, says Mahathir

Malaysian Prime Minister Mahathir Mohamad.

Mohd Rasfan | AFP | Getty Images

Malaysia will review its labor laws to cut an "over-dependence" on foreign labor and address other issues, its prime minister said on Thursday, amid simmering discontent against overseas workers who make up 46% of the labor force.

In the first quarter of the year, Southeast Asia's third biggest economy had a labor force of 15.5 million. More than 7 million of them were foreigners, from countries such as Bangladesh, with many working in the construction and hotel industries. Labor force refers to employed or unemployed people between the age of 16 and 64.

Prime Minister Mahathir Mohamad told a gathering of international trade chambers that generating more skilled jobs, raising salaries and wages, enhancing "management of migrant workers" and improving labour market conditions were some of his government's top labor-reform priorities.

"These reforms are crucial, not only in developing human capital to support our future economic growth but also in addressing job mismatches which contribute to graduate underemployment, unemployment, and slow wage growth as well as over-dependence on foreign labour," he said.

The prime minister said his government was also working on increasing the female labour force participation rate to 59% by next year. In the first quarter, the figure was 55.7%.

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