The World Bank has indicated that it is unrealistic to prevent Malaysians from seeking employment in Singapore due to the currency differences between the two countries.
"Most nations experience this phenomenon where highly educated individuals migrate for better opportunities," stated Dr. Indermit Gill, the World Bank Group's chief economist.
Dr. Gill highlighted that just as Indonesians migrate to Malaysia for better wages, Malaysians naturally look towards Australia, Singapore, the US, and the UK for higher-paying jobs. "This is a natural process," he explained during a media roundtable discussion.
Supporting this view, World Bank lead economist Dr. Apurva Sanghi emphasized the impracticality of stopping the migration to Singapore due to currency differentials. He suggested that rather than attempting to halt this trend, Malaysia should concentrate on enhancing productivity to boost wages, noting that the current wages align with productivity levels in the country.
"I often hear complaints about low wages in Malaysia. Low compared to what? Yes, wages are lower here than in Singapore or Australia, but they are not low when measured against productivity in Malaysia," Sanghi explained. "You cannot legislate productivity or higher wages; you need to improve productivity first."
Data from the Department of Statistics Malaysia (DOSM) shows a year-on-year increase in labor productivity of 1.9% in the first quarter of 2024, slightly up from 1.7% in the same period the previous year.
Addressing the commonly negative perception of "brain drain," Sanghi argued against the notion of a fixed labor pool in the economy. He illustrated his point with examples from other countries. When the US modified its visa policy to attract more nurses from the Philippines, it incentivized more Filipinos to enter the nursing profession. "For every nurse that left the Philippines, nine more obtained licenses and remained in the country," Sanghi noted.
He also pointed to India, where the migration of IT professionals has not depleted the local workforce. "Despite many Indian IT experts working abroad, India remains a hub for digital transformation," he added.
The insights from Dr. Gill and Dr. Sanghi highlight the importance of understanding global labor dynamics and focusing on internal productivity improvements to address wage concerns rather than attempting to restrict the natural flow of talent across borders.
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