Malaysia has banned the hiring of new foreign workers in the manufacturing and services sectors amid fears the economic crisis will lead to more job losses for locals, reports said today.

Home Minister Syed Hamid Albar told the New Straits Times there was no reason to bring in foreigners after a human resources ministry report showed 45,000 people would be laid off over the Chinese New Year at the end of the month.

"This is not the time for employers to ask for foreign workers. The first to be retrenched should be foreigners and not locals," Syed Hamid told the paper.

"There is no valid reason to bring in foreign workers at this time," he added.

Deputy premier Najib Abdul Razak said the foreign workers would be sent back in batches so as not to jeopardise the country's economy.

"We are looking at the numbers, but there has to be gradual reduction of foreign workers," Najib told Bernama news agency.

He said government agencies had also been instructed to take greater action against the more than one million illegal workers in the country.

The government is preparing a second economic stimulus package following a RM7 billion plan unveiled last November to help companies and workers who have lost their jobs as a result of the global economic downturn.

bangladesh foreign workers migrants 030108 The one million foreign workers currently in the two sectors will be allowed to work until their permits expire or they are laid off, according to the Star daily.

Malaysia - one of one of Asia's largest importers of labour - has an estimated 2.2 million foreign workers, who are the mainstay of the plantation and manufacturing sectors.

However, the government has become concerned about the ramifications of having such a big migrant workforce and periodically tries to reduce it.

- AFP