ABSTRACT
Having established the long-term slowdown in manufacturing growth, in this section, we
provide evidence to show that its premature slowdown has restricted both labour produc-
tivity and wage growth in the sector in Malaysia. Because of the paucity of comparable
data, we use the period 1988 until 2010 in this section with the periodization defined on
the basis of growth in mean wages in the manufacturing sector. We then evaluate labour
policies and labour market outcomes, which have been inconsistent and counterproduc-
tive, specifically in failing to chart a clear and effective passage towards higher skills,
higher wages and improved work conditions. Instead, Malaysia has entrenched depen-
dency on low-skilled foreign workers. Labour policy regarding foreign labour has suf-
fered from inconsistency, tendency to react to circumstances, lack of worker protection
and poor monitoring against non-compliance and abuse (Devadason and Meng 2014).
