The government's policy of allowing foreign workers into the country to maintain Malaysia's competitiveness in declining sectors such as agriculture is wrong, according to an economist from a leading economic think-tank, the Malaysian Institute of Economic Research (Mier).

During a question-and-answer (Q&A;) session with the floor after presenting Mier's annual Economic Briefing in Kuala Lumpur today, Mier executive director, Dr Mohamed Ariff said 'the government has adopted the wrong strategy by bringing in low-skilled foreign workers to resurrect labour-intensive and land-intensive industries such as agriculture'.

"The social cost is enormous," Mohamed said. "This is the wrong way to maintain our competitive advantage (in these sectors)," he said.

He questioned the rationale behind the need to maintain a competitive advantage in 'dying sectors' and asking, "So what? We must find a new niche."

He said the government should not concentrate on low value-added and land-intensive activities, adding that productivity among Malaysian workers had actually declined following the influx of foreign workers into the country.

"Productivity was going up until we allowed foreign workers in," he said. "A lot of companies has actually delayed the automation of their operations due to the availability of cheap labour," he said.

The Ministry of Human Resources estimates that there are about 600,000 to 700,000 registered foreign workers in Malaysia. However, it is believed that the number of foreign workers are much higher due to illegal ones.

Most foreign workers are brought into Malaysia via employment agencies to work in sectors which are not favoured by locals such as the construction and agriculture. A sizeable number of them also work as factory workers.