THE Future Ready Financing (FRF) program is a pioneering initiative that brings together our commitment to empower small and medium enterprises (SMEs), strengthen our economic resilience, and drive a new industrial future.
We launch FRF with the goal of equipping SMEs to excel in high-end manufacturing and manufacturing-related services.
This strategic collaboration led by MIDF, with the support of MTDC, SIRIM, and solution providers, offers targeted financial products, expert advisory services, and advanced technological solutions to drive automation, enhance operational efficiency, and, crucially, reduce dependence on unskilled foreign labour.
A sense of collective guilt towards Malaysians who work as cheap labour overseas
Our economy must grow through adopting and adapting technology, and eventually innovating technology. Let us be very clear, Malaysia will not grow if we continue to rely on unskilled foreign labour.
In the 1990s, among Asian economies, Malaysia’s level of technology sophistication was just behind Japan, South Korea and Taiwan. I met many friends from China who told me that when they themselves were young engineers back in the 1990s, many chips, electrical products and equipment that they used were made in Malaysia. Some even shared that, 30 years ago, most of the more technically competent engineers hired in China to run factories were from Malaysia.
But in the last 25 years, we have lagged behind while China emerges as a global tech giant. Instead of venturing into the new field of technology, many Malaysian companies opted to hire cheap unskilled foreign labour.
Despite our first economic takeoff in the 1990s, many companies took the easy way out by opting for cheap unskilled foreign labour. This situation had pushed wages down, resulting in many Malaysians having to go overseas to work as cheap foreign workers in Singapore, Australia, Korea and the United Kingdom. Some Malaysians even work in these countries as undocumented workers.
Essentially we – both the government and the industries – have failed our own people who had to work as cheap foreign labour overseas due to low pay in Malaysia, caused by the over-reliance on unskilled foreign workers. This is a shame on all of us. We as a society should bear the collective guilt of seeing so many Malaysians working as cheap labour overseas. We must change this situation for the sake of the next generation.
The Government is determined to change that. There is a need to make hiring of foreign workers more expensive through the multi-tier levy mechanism, EPF contributions for foreign workers, and a higher minimum wage. When hiring of unskilled foreign workers becomes more expensive, it will make more financial sense for industries to adopt more technology, hire less labour, and pay each skilled worker a higher wage. Of course, all of these will benefit Malaysian workers.
Malaysia will grow exponentially when each of us – government leaders, civil servants, and businesses – have a sense of solidarity towards Malaysian workers by having a commitment to create quality jobs with better pay for them to stay here and contribute to our beloved Malaysia.
Future Ready Financing
To be less reliant on unskilled foreign workers, the Future Ready Financing is one of the solutions to help SMEs transition into technology-based industry. This is in line with the aspiration of the New Industrial Master Plan (NIMP 2030).
Malaysia’s SMEs are the backbone of our economy, contributing 38% to our GDP and providing nearly half of our nation’s employment. Empowering SMEs is essential to fulfill our industrial targets under NIMP 2030.
MTDC and SIRIM play pivotal roles by assessing technological readiness, matching SMEs with the right solution providers, and recommending eligible SMEs for MIDF financing. This holistic approach ensures that SMEs are not only equipped with financial resources but also supported with expertise, positioning them for successful integration of smart technologies and sustainable growth.
By working closely with SMEs, solution providers help businesses to integrate automation and digitalisation technologies, enhancing productivity and efficiency, particularly in the manufacturing and manufacturing-related services sectors.
Through Future Ready Financing, I hope SMEs will adopt Industry 4.0 technology, access real-time data analytics, engage in precision manufacturing, and roll-out smart factory systems across the board.
Development Finance Institutions (DFIs)
Development Finance Institutions (DFIs) like MIDF and MBSB should play a more important role in Malaysia’s industrial development. The merger of MIDF and MBSB in 2023 was a good start but more needs to be done. Our DFIs should be at the forefront of helping Malaysian firms, especially SMEs to innovate and to grow through technologies. DFIs need to be very clear with their public missions and stay focused on these missions.
I would like to extend my gratitude to MIDF, MTDC, SIRIM, and the Solution Providers for making this program a reality. The FRF should be emulated by other DFIs and multiply.
I hereby officially launch the Future Ready Financing (FRF) Program. May this program stand as a beacon for innovation, growth, and sustainable industrial excellence in Malaysia.
Thank you, and let us continue working together to create a brighter, resilient future for Malaysia.
Liew Chin Tong is the Deputy Investment, Trade and Industry Minister. This is Liew’s speech delivered at the Launch of MIDF’s Future Ready Financing (FRF) Program on November 4, 2024.
