KUALA LUMPUR (June 28): The Japanese Chamber of Trade and Industry Malaysia (JACTIM) said a majority of Japanese companies operating in Malaysia want to see minimum wage increases which are commensurate with economic growth.

“Our basic concern is the speed and increase of the minimum wage. Our proposal to the government is that the minimum wage should be commensurate with economic growth. 

“For example it should take into account Malaysia's GDP growth, or alternatively consider the company's productivity,” JACTIM president Hiroyuki Imizu said in a press conference today.

According to the results of a joint survey conducted by JACTIM and Japan External Trade Organisation, wage increases, retention of employees and the quality of workers (Malaysian and foreign) were among the top issues regarding the Malaysian labour situation for Japanese companies operating here.

The survey, which was conducted from Jan 24 to March 31, focused on several issues faced by 33% or 184 of 554 JACTIM members, which are Japanese companies operating throughout Malaysia.

Among the other issues raised by its members were foreign exchange controls and difficulties faced in hiring foreign workers.

"The ratio of companies raising 'foreign exchange control' was 38.6% and ranked the highest with regard to the issues on trade and investment," said JACTIM in a statement today.

"This was 16.4% lower in comparison with the previous survey, however, it is presumed that the change of foreign exchange control regulation imposed by central bank in December 2017 is still affecting them," it added.

A significant portion of Japanese companies are also facing difficulties in hiring foreign workers, with 36.5% of companies in the manufacturing sector facing said issues.

As a countermeasure to foreign worker hiring obstacles, JACTIM said 42.1% of companies opted to employ more Malaysian workers while 39.3% opted for mechanisation or automatisation to work around the issue.

Additionally, the organisation said 9.5% of Japanese companies are calling for the "simplification and efficiency of application procedure of foreign workers".

Separately, in a "business survey" conducted by JACTIM in the first half of 2018 (1H18), Japanese companies are positive on the business climate in Malaysia, recording a favourable score of 7.1 points on the diffusion index, the highest score after three years of posting negative and unfavourable scores.

"Japanese companies are expecting further improvement in business climate in the future," JACTIM said, adding that it forecasts the score to jump to 22.2 favourable points for 2H18.