Malaysia to allow foreign labour in only 3 sectors, says deputy minister

KUALA LUMPUR, July 29 (Reuters) - Malaysia will limit hiring of foreign labour to three sectors, a deputy minister said on Wednesday, in what the government said was a move to increase employment opportunities for locals affected by the COVID-19 pandemic.

Authorities have detained hundreds of foreigners and refugees in recent months as strict curbs on movement and businesses to contain the pandemic have also turned public sentiment against migrants.

To reduce the pandemic’s impact on local employment without hurting key industries the government will limit foreign labour hiring to the construction, agriculture and plantation sectors, said Human Resources Deputy Minister Awang Hashim.

“Other sectors will be staffed by local workers. This is the guideline we have set for our policy to reduce the number of foreign workers,” Awang told parliament.

Malaysia hosts about 2.1 million documented foreign workers, the deputy minister said without providing further detail.

Unemployment rose to 5.3% in May, according to Malaysia’s satistics department, as businesses were forced to shutter for nearly three months during the coronavirus curbs.

Southeast Asia’s third-largest economy grew by 0.7% in the first quarter, hit by the twin effects of the pandemic and plunging global energy prices.

Malaysia’s central bank expects a tougher second quarter, weighed down by broad weakness in labour markets and precautionary behaviour among households and businesses.

Reporting by Joseph Sipalan Editing by David Goodman