The Federation of Malaysian Manufacturers (FMM) Monday warned the government that a labour shortage caused by the expulsion of illegal workers could hit the economy hard.

The deportations would affect not just the construction and plantation sectors, where the illegal workers are mainly employed, but downstream industries, the FMM said in a statement.

"The government's move to repatriate illegal workers on Aug 1, 2002 is expected to have a significant impact on these sectors, including affecting work-in-progress and, indirectly, the demand for building materials," it said in a statement.

The impact of the exodus of some 322,000 illegal workers during an amnesty over the past four months ahead of the introduction of tough new laws was already being felt on construction sites around Kuala Lumpur.

"There is a shortage of workers. This has caused work to slow down," one site supervisor working on a monorail project outside the capital Kuala Lumpur told AFP .

"The labour shortage will cause many companies to delay the completion of their work and be forced to pay compensation for late delivery," he said on condition of anonymity.

Choosy locals

Asked if Malaysian workers could make up the shortage, he said: "They prefer cosy jobs. Even if they are employed, they work for two days and take off the next two days."

Under the new immigration laws, both illegal immigrants and their employers face a mandatory six months in jail and possibly up to six strokes of the cane.

The FMM said there was a need to streamline and improve the recruitment procedures for foreign workers.

There are already some 750,000 legal foreign workers im Malaysia, who were supplemented by an estimated 600,000 illegals before the amnesty sent more than half of them scurrying for home before the Aug 1 deadline.

Indonesians topped the list of those who have returned home, with 273,244 people leaving, followed by more than 20,000 Indians and 17,000 Bangladeshis.

Aminun Rahman, 37, a Bangladeshi worker at the monorail project said that previously some 30 workers did piling work but now there were only 10.

To ensure the project meets the deadline, workers have been told to put in three hours of overtime, he said.

Uncrippling impact

Ramon Navaratnam, corporate advisor to construction giant Sunway Group, told AFP that in the short-run the labour shortage would have an impact on the industry.

"It will have an impact but it will not cripple the sector," he said.

The Malaysian Employers Federation executive director, Shamsuddin Bardan, said some 80 percent of construction workers were foreigners, of whom 70 percent were illegals mainly from Indonesia. — AFP