Lilian Budianto, Jakarta – Malaysia expects to hire fewer Indonesian workers and see a decrease in the volume of investment, trade and tourism between the two countries due to the global economic slowdown, Malaysia's ambassador said on Thursday.
Dato Zainal Abidin Zain said that Malaysia's economy, which relied heavily on external trade, had started to feel the impact of the global economic fallout; this will affect the need for migrant workers from Indonesia.
Around 1.1 million workers from Indonesia are employed in Malaysia. They work mostly as domestic helpers and labors in construction, or in the manufacturing, service and plantation sectors; a smaller number of skilled workers are spread across various sectors.
"Malaysia has seen exports slow recently as the impact of the global economic crisis is felt," Dato Zainal said during a conference organized by the Indonesian Journalist Association (PWI).
The Agence-France Presse reported on Thursday that Malaysian exports fell 2.6 percent to US$14.7 billion in October amid lower demand for electrical and electronic products and other commodities. Dato Zainal said Kuala Lumpur had prepared a stimulus package worth $2 billion to encourage economic activity.
"When our exports suffer, we cannot guarantee there will not be any reduction in the need for foreign workers. It's been reported that there will be around 300,000 foreign workers sent home but it's too early to speculate. We will find out in the middle of next year; it all depends on the situation (in the coming months)."
Officially, Indonesians make up the largest contingent of foreign workers in Malaysia, but their actual numbers are believed to be much higher, as many enter the country illegally. In 2008, Malaysia reported that around 800,000 Indonesians resided in the country and worked without proper documents.
The subject of Indonesian migrant workers has become a contentious issue recently, with reports of the abuse of migrant workers and the deportation of illegal workers straining the 51-year-old ties between the two nations.
Besides the issue of migrants, the two countries may face challenges on economic and tourist fronts.
Malaysia is Indonesia's 10th biggest trading partner and ranks second in the Southeast Asian region after Singapore. Bilateral trade between Malaysia and Indonesia stood at 25.7 billion ringgit (about US$7 billion) between January to July in 2008. Malaysian direct investment in Indonesia from January to October 2007 stood at 4 billion ringit.
"We hope to have closer cooperation on tourism in the future, despite the crisis. Malaysian Airlines and Air Asia added additional flights to several cities in Indonesia in support of "Visit Indonesia Year 2008", Dato Zainal said, referring to the Indonesian government's program that aimed to attract 6.4 million tourists this year.
A total of 1.7 million Indonesian tourists came to Malaysia in the first nine months of this year, up from a total of 1.2 million in 2007. Last year Malaysia hosted 1.8 million Indonesian visitors, the second largest number after Singapore.