Friday, 4 September 2020: The Center for Market Education (CME) is concerned about a rising anti-foreigners sentiment in Malaysia, which may produce harmful effects on the local economy, in particular on employment.

In the past two days, the following policies were announced:

  • ban from entering Malaysia for citizens of countries with more than 150,000 Covid-19 cases
  • impossibility for foreigners to open certain businesses, including restaurants, in Kuala Lumpur, even with a local partner

These two policies were announced on the same day (Thursday) in which G20 foreign ministers sought international cooperation over easing travel restrictions and reopening borders, as months of coronavirus shutdowns exerted a drag on the global economy.

In commenting the news, Dr Carmelo Ferlito, CEO of CME, observed the following points:

  1. These measures add on other discriminations against foreigners, like the impossibility to access non-muslim worship places.
  2. The ban to enter Malaysia seems to imply that Covid-19 is somehow related with nationality rather than with the physical presence in a certain place. Why should an Italian coming from Japan, in example, be barred from entering Malaysia by virtue of his/her passport?
  3. It seems that the contribution of foreigners, both immigrant workers and expatriates, to the Malaysian economy is not recognized anymore.

Dr Ferlito added that to protect the country from the spreading of the virus is important but such a commitment to general healthcare should not be conducted with discriminatory policies, whose efficacy is also questionable. Currently, foreigners entering Malaysia are already subject to Covid-19 test and quarantine in a government centre; we should enforce these measures rather than discriminating on nationalities.

At the same time – Ferlito added – we should wonder how truly “nationalistic” is the rethoric of “Malaysians first”. In fact, if nationalism means to care about the welfare of the nation, to implement measures that may discourage Foreign Direct Investments and push Multinational companies away from Malaysia surely is not in the interest of the nation. If a MNC with 10 foreign managers and 200 Malaysian employees, pushed by discriminatory policies, decides to relocate its activity, who is harmed the most? The 10 foreign managers who can continue their job elsewhere or the 200 Malaysian employees who find themselves unemployed?

As in other occasions, Dr Carmelo Ferlito stressed the importance of understanding the unintended consequences produced by policy on the economy.

As emerged in a webinar organized by CME on 3rd September, in which Professor Deidre McCloskey from Chicago talked about “Economics, History and the Great Enrichment”, Liberty, not capital accumulation or exploitation, is the key for a miraculous and long lasting economic growth. Liberty is key for good ideas to become innovations and drive a country’s growth.

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About CME: The Center for Market Education (CME) is a boutique think-tank based in Kuala Lumpur, Malaysia. As an academic and educational institution, CME aims to promote a more pluralistic and multidisciplinary approach to economics and to spread the knowledge of a sounder economics, grounded in the understanding of market forces. In order to do so, CME is not only involved in academic initiatives, but it organizes seminars, webinars and tailor-made economics classes for students, journalists, businesspeople and professionals who wish to better understand the relevance of economics for their daily lives and activities. Economics matters and needs to be presented in a fashion in which the link with reality is clearly visible. In this sense, we look not only at theoretical economics but also at policy making, with an emphasis on the unintended consequences generated by political actions.