About 1.13 million Malaysians who have migrated overseas – close to six in 10 – were residing in Singapore in 2022, according to Malaysia’s former human resources minister V. Sivakumar, up from 952,000 in 2019.
This is a sizeable proportion of a 33 million population, considering it does not include the vast number of Malaysians who cross the Causeway and Tuas Second Link each day to work in Singapore.
As with most developing countries, Malaysia grapples with the challenge of brain drain, where a country loses its highly qualified professionals to others.
The recent fall of the ringgit to historic lows may well serve to accelerate Malaysia’s brain drain to the Republic.
The currency hit a new low of 3.57 against the Singapore dollar on Feb 22. While it has since improved, analysts say its recent woes might push Malaysians to search for job opportunities elsewhere to earn money in a country with a stronger currency.
An exodus of talent happened in 1998 when economic turbulence triggered an outflow. However, the crisis proved Malaysians to be flexible and resilient. Many who moved overseas eventually returned with valuable skills and experiences.
The ringgit has seen better days, having held steady at 3 to 3.5 against the US dollar for nine years after returning to the managed float system in July 2005.
External developments have accelerated its depreciation since 2014. A drop in crude oil prices, coupled with the reversal of US quantitative easing, led to a net capital outflow and sent the ringgit skydiving.
That year, Malaysia’s financial account went into deficit for seven consecutive quarters, triggering a rapid depreciation of the national currency by 42 per cent. The 1MDB scandal in mid-2015 further eroded confidence in the currency.
Finding career opportunities in Singapore
Today pull factors, coupled with the free flow of information, may drive migration more than push factors. Back in 1998, people found it harder to find a job overseas as the Internet and digital communication were less advanced. Today, opportunities are broader and more accessible.
Singapore’s proximity makes it a natural prime destination for Malaysians across a wide range of industries – from construction, services and banking to the high-tech sector. Add to that Singapore’s well-established infrastructure, high standard of living and competitive job market, and relocating can look pretty attractive.
In that sense, the ringgit’s fluctuating fortunes are merely one small push factor.
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Singapore is looking like a decent option for a broad range of Malaysians spanning many industries and income brackets. A recent study by the Department of Statistics Malaysia, an agency under the Prime Minister’s Department, found that close to 40 per cent of Malaysians employed in Singapore are skilled workers, most aged 25 to 34, while another 35 per cent are semi-skilled. Notably, 24 per cent are in clerical support roles, and 20 per cent hold professional positions.
Most – slightly more than two-thirds – earn a monthly gross salary ranging from $1,500 to $3,599. Almost one in five – 18.5 per cent – earn between $3,600 and $9,999. And a notable 1.2 per cent receive $10,000 to $17,999. Nearly 0.2 per cent earn $18,000 and above.
The racial breakdown seems fairly balanced with about 46 per cent Chinese, 40 per cent Malay, and 11 per cent Indian.
Almost one in two Malaysians employed in Singapore expressed a strong inclination to prolong their tenure by another six years. They cited as key driving forces a combination of promising job prospects, favourable working conditions, competitive salaries and the Singapore dollar’s advantageous exchange rate.
The report raises questions about the state of Malaysia’s economic health. Growth is slowing and exports are contracting sharply, with knock-on impact on the workforce. While the ringgit was hit hard during the 1998 Asian financial crisis, the current context, taking place amid a more globalised world and more mobile Malaysians, introduces a new set of challenges for Malaysia.
Finding social mobility in advanced countries
Singapore’s economic vibrancy is an attraction, but its ease of relocation and stable political environment are also major draws. For Malaysians, Singapore offers a cosmopolitan, yet familiar multicultural atmosphere that eases cultural assimilation. The feeling of security and the opportunities for higher incomes and career growth make an appealing case for a move.
For many Malaysians, what starts out as a strategic career move here can evolve into a permanent transfer to making their home here.
Emigration appeals to Malaysians seeking social mobility. While Singapore stands out, data from the Malaysian Department of Statistics showed that other popular countries include Australia (15 per cent), the US (10 per cent) and the United Kingdom (5 per cent).
The Australian Census of Population in 2016 showed that a substantial 56 per cent of Malaysians there were gainfully employed, and an impressive 70 per cent have at least a bachelor’s degree. Most work in services, with healthcare and social assistance prominent subsectors.
In the US, close to 80,000 Malaysians lived there as at 2019. Over 60 per cent hold a bachelor’s degree, and work in hospitality and services – including F&B, institutes of higher education and computer science. The American Community Survey also found that on average, Malaysian workers with a tertiary education there earn an annual income that is US$8,653 (S$11,533) more than the average worker in the US.
Emigration appeals to Malaysians seeking social mobility, and the data from the Malaysian Department of Statistics showed that popular countries include Australia. ST PHOTO: KUA CHEE SIONG
A similar trend is present in Britain where about 38,000 Malaysians reside, with more than half having a tertiary degree, according to the UK Annual Population Survey 2019. Most occupy professional roles in the services and hospitality industries – which includes social work, accommodation, and food services.
Other attractive destinations are Canada and Brunei, with these countries appealing to Malaysians in healthcare, engineering, information technology and academia.
The challenge: retaining skills for growth
With more Malaysians looking for work abroad amid a weakened ringgit, the country’s recovery could be in jeopardy. Malaysia would lose the very skills required for innovation and growth. Sectors like oil, gas and energy, financial services, information and communications technology, healthcare and business services, which demand high levels of education and expertise, could hollow out over time – these are industries where Malaysia cannot afford to lose ground.
The Malaysian authorities know this and set up the Returning Expert Programme in 2001, facilitated since by Talent Corporation Malaysia Berhad, to bring back high-skilled talents across major sectors. By September 2022, almost 4,200 had returned under the programme, comprising high-value professionals and technical experts.
But stemming brain drain further requires an organised and coordinated national strategy to tackle Malaysia’s structural problems and boost the local job market, so as to encourage Malaysians living overseas to invest or return home after gaining useful experience. The overall goal must be to restore confidence in the Malaysian economy.
To retain top talent, Malaysia needs to cultivate an environment that supports innovation and research, yet more than four in 10 Malaysia-based CEOs say they are uncertain about their companies’ long-term viability, according to PwC’s 27th Annual Global CEO survey.
Indeed, while the World Bank predicts Malaysia is on track to become a high-income and developed economy by 2028, a 2021 report sheds light on key areas where it falls behind high-income OECD countries: labour compensation, tax collection, spending on social protection, environmental management and control of corruption. The World Bank further prescribes reforms to revitalise long-term growth by investing in human capital, improving the creation of good jobs and modernising the investment ecosystem.
The weakened ringgit is a wake-up call for Malaysia to address its economic shortcomings – even if the attraction of working abroad will always loom large for mobile Malaysians seeking greener pastures.
Chia Wai Mun is associate professor of economics at the School of Social Sciences, Nanyang Technological University.
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