Why the 1.5 million Bangladeshis should not be brought into Malaysia

By MT Webmaster Last updated Feb 25, 2016

The most important point to all this, though, is that those three or four million poor workers living below the poverty line are going to all be fellow Malaysians and not pesky Bangladeshis who we do not want contaminating our country like what those Chinese pig farms in Negeri Sembilan are doing.

NO HOLDS BARRED

Raja Petra Kamarudin

I was in Liverpool last night having dinner with a couple of friends and what our host, Robert Ooi (the chap on the far right in the picture below) told us was most interesting. Robert Ooi runs that restaurant (Mr Ho’s Restaurant) where we had dinner.

Robert said that the restaurant business is very tough nowadays. And I should know because my children have been running the family kopitiam for the last three years since Hari Raya Day of August 2013 and we know what Robert means.

In fact, before we started the family kopitiam Robert warned us that we will need to sustain the business for three years without expecting any profit. Another friend, Eddie Lim, who owns Mango Tree and many other restaurants in London, told me the same thing. Eddie said if we do not have at least three years’ capital reserves the business is going to run out of money and fail.

Anyway, Robert said the restaurant business is getting more difficult compared to, say, ten or 15 years ago. We not only need to worry about competition but the problem of workers as well.

In the past it used to be an employers’ market, Robert said. We could pick and choose whom we want to employ. Today, said Robert, it is an employees’ market. They choose whom they want to work for and if we do not treat them right or we hurt their feelings they just walk off and leave us stranded.

That is sort of true. Another friend, HT Loh, who runs a Baba-Nonya restaurant in Northampton, faces that same problem of getting workers. He actually had to close his establishment for a brief period because he did not have a chef. So he asked one of my sons to help out. My son has now moved to Northampton to help Loh manage his kitchen and I was told the restaurant is now doing pretty well.

The problem is the British government has tightened up the rules. Restaurants can no longer employ illegal workers like most of them did in the past. There are constant raids and if the authorities catch illegal workers on your premises you will get fined £10,000 per worker (I was told it has now been increased to £20,000 per worker) and you will also be made to serve a jail sentence.

A number of restaurants had to close down or were sold off because of this — they were caught with a number of illegal workers and the hefty fine bankrupted them.

Our family kopitiam is fortunate in that we have two sons and two daughters-in-law working in the business while we employ only another three people. So we do not face problems with getting blackmailed by our workers. Those that depend fully on employed staff are finding it very difficult to survive.

Even if later we decide to close down the family kopitiam for any reason my three sons and two daughters-in-law would not need to join the four million unemployed British. Because of their skills they would be very much in demand and taking home £1,200-1,400 a month is not going to be difficult. They could even command plus-minus £22,000 a year salary if they became the head chef. And that is a very decent salary if you already have a place to live, which all my children do.

And this is possible because the British government is acting against those who employ illegal workers. You need to employ legal workers and pay them minimum wage of about £7 an hour. Those employers who are desperate for skilled workers such as chefs would even be prepared to pay £10 an hour.

So, on an 8-10-hour working day you can take home at least £70-80 a day or about £350-400 a week or £1,500-1,600 a month. And in the UK you can own a car and a modest house with that salary.

But then restaurants have to suffer. The restaurant business becomes tough and some find it very difficult to stay in business. We need to pay 20% VAT (when you in Malaysia pay only 6% GST) and we need to pay very high council and business taxes and all sorts of other expenses. Most times we are just working for the employees and the government. The restaurant owners get almost nothing after the employees and the government are paid.

But it is good for the employees, of course. The competition for jobs from cheap labour is eliminated. So they can now demand higher salaries, which we either pay or we will have to close down our business. We need to then increase our selling prices to cater for this higher operating cost. And the government takes 20% of everything that we sell — so the higher our selling price the better for the government.

Employees also have to pay 20% income tax on their salary. So the higher the salaries the higher the government can tax the employees. So, the government taxes 20% of our employees’ salary and then it taxes us 20% again on what we sell. And if 50% of our cost is salaries the government actually earns quite a lot from making sure that we do not employ cheap labour.

So this is what Malaysia should do. Ban foreign labour. Raid factories and shops and arrest all the illegal workers. Fine the businesses at least RM50,000 for each illegal worker they employ and send the business owners, directors, partners, etc., to jail for two years.

Most of the businesses that are going to be affected would be SMIs, the majority of them Chinese-owned. So, to make sure that the Chinese business owners would not try bribe the Malay enforcement officers make sure that the raid is video-recorded and a team of MACC officers who are known to be extremely honest and clean and god-fearing and would never take bribes are in the raiding party.

Eventually, the cheap and/or illegal labour market would dry up and employees, especially the Chinese-owned SMIs, would need to pay higher salaries, maybe even double what they are paying now — or else they can close down their business if they want to.

Of course, they would need to increase the price of their products to cover this huge increase in salaries. Malaysians, however, would be very happy to pay double what they are paying now just as long as the people employed in those businesses are fellow Malaysians and not foreign workers.

Those businesses that depend on exports will, no doubt, find that they are now uncompetitive and that they can no longer sell. Well, then they can close down their factories and relocate to another ASEAN country (or to Bangladesh) where the labour is far cheap than in Malaysia.

The consumer, of course, will have to suffer far higher prices even though prices in Malaysia are already currently very high as it is.

Many businesses will find it very hard to continue operating and will have to close down. But then most of these businesses are Chinese-owned anyway so when they close down the ratio of Chinese businesses will drop and this will solve the New Economic Policy (NEP) problem where the Chinese own more businesses than the other races. Umno can then tell the Malays that the ratio of Malay business has increased mainly because many Chinese businesses have closed down. So the NEP works after all.

Foreign investors would no longer set up businesses in Malaysia because the labour cost is too high. They would avoid Malaysia and would choose another ‘cheaper’ country. In time, as the labour supply increases while the job opportunities reduce, there will be too many people chasing too few jobs. Salaries would then come down again and employers can once again pay pittance for employees, but this time to Malaysians and not to foreigners.

Malaysians would have to accept what in the past only foreign workers such as Bangladeshis would accept. They either work for very low salaries or else they do not eat. The gap between the rich and poor would get wider and the number of Malaysians living below the poverty line would increase

Robert Ooi on the far right: dinner at Mr Ho’s in Liverpool

Marina and the new addition to the family, Lily, our sixth grandchild

Raja Petra Kamarudin RPK