KUALA LUMPUR: Amid the increasingly familiar refrain about Malaysia’s shortage of skilled workers, one aspect of the problem that has emerged is the lack of skilled jobs created for people who actually have the skill, education and knowledge, while the jobs of those unskilled are being taken over by foreign labour.

“As a result of that, unskilled workers remain unskilled, while those with skill cannot practise their knowledge,” said Malaysian Institute of Economic Research senior research fellow Dr Zulkiply Omar at the Nomura’s Breakfast Conference on “Navigating Through Geopolitical Uncertainties” yesterday.

He highlighted that it is increasingly critical that Malaysia addresses its human capital problem before the country, despite its world-class infrastructure and facilities, finds itself out of favour with investors as it is no longer competitive in terms of production costs, compared with some cheaper neighbours.

In other words, investors are spoilt for choice and Malaysia better up its game.

“We have strong infrastructure, comparable to developed countries. But most investors are looking for cheaper production costs in the manufacturing sector. We need to move out from that level and focus on industries that require high-skill workers and increase our technological innovation. We need to increase our productivity in order to compete on a different level,” said Zulkiply.

To Nurhisham Hussein, head of economics and capital markets department with the Employees Provident Fund board, Malaysia remains an attractive destination for foreign investors, but if the issue of skilled worker shortage is not addressed, it would eventually put them off.

“Foreign investors are still positive about Malaysia although there is a slight slowdown in FDI (foreign direct investment) in recent years. But in comparison with our peers, we have a strong infrastructure in place. The only concern is finding skilled workers to move up the value chain,” he said.

Interestingly, Ibrahim “Ben” Suffian, co-founder and director of programmes at Merdeka Center for Opinion Research, shared that there is a divergence in perception on Malaysia between domestic and foreign investors.

While foreign investors are more positive about Malaysia being a better destination compared with other countries, domestic sentiment has been more negative compared with four years ago.

“The negative perception regarding Malaysia’s development on the domestic front could stem from the high level of population caught by rising costs as they try to move to the middle-income class, due to GST (goods and services tax), higher food import bills as a result of the weak ringgit and other [factors],” he said.