The carpet may still be out there but fewer are making a beeline to troop in to make Malaysia their second home.
According to the Singapore Straits Times,data from the 'Malaysia My Second Home (MM2H)' programme shows the number of successful applications falling by half in the last three years since it reached a
high of 2,600 in 2006.MM2H, formerly known as the Silver Hair programme for foreign retirees was overhauled and renamed in 2002 to widen to net in wealthy foreigners in general.
Applicants who are below 50 years old must have liquid assets of at least RM500,000 and RM10,000 in monthly income earned from abroad.
Those aged 50 and above need assets of RM350,000 and a monthly offshore income of RM10,000.
A report on Malaysia’s workforce by Citigroup, an investment bank, noted that Malaysia could be losing its appeal as a place to live in.
Tourism Malaysia chairman Victor Wee, however, blames the decline on the fact that the authorities are taking a closer look at candidates.
He said that in the past, many applicants tried to use it as a foothold by which to gain work, while some had even lied about how much money they had, using fake bank statements.
“In the earlier years, some of the people who came were not those that we targeted,” Wee said.
“We are in the process of adjustment. We now have a lot of interest from Britain, Japan, South Korea and Australia, and a growing interest from Iran.”
Penang island, with its beaches and historical town center, draws the most number of MM2H participants from Europe.
MM2H is often seen as a tourism sideshow because of its small numbers, but it has a greater significance. This is because the scheme sells Malaysia as a desirable long-term second home.
The issue of Malaysia’s appeal to foreigners has become important to the government after it acknowledged that it needed foreign talent to drive its stagnant economy forward.
Prime Minister Najib Razak raised the topic during a speech to Malaysians living in Singapore recently. He told them that Malaysia needed global talent — whether Malaysians who live abroad or foreigners — but it faces stiff competition.
“We will create more opportunities, more excitement and more buzz in Malaysia to attract the Malaysian diaspora and expatriates to the country.’
The World Bank’s Malaysia Economic Monitor recently noted that only a quarter of Malaysia’s workforce of 12 million comprised skilled labour.
This has become a serious obstacle as the bank’s investment climate assessment report in 2007 found the shortage of skill to be the main concern of employers.
Malaysia is belatedly trying to tackle this problem. It has tried various measures with limited success.
Pouring money into tertiary education has not produced the desired results. The drive to churn out graduates in large numbers came at the expense of quality.
The struggle to retain local talent has been equally difficult as they were wooed away to developed countries.
The country has tried to fill the gap with foreign talent but efforts had been marred by complaints of bureaucracy and prejudices against certain nationalities. The government has pledged, yet again, to relax immigration policies.
Najib had announced in his maiden Budget that the family members of skilled workers will get visas within 14 days, and that foreign men married to Malaysian women will get permanent residence.
But will they come? The Citigroup report noted that beyond easing immigration rules, equally important factors are the business environment and living conditions.
Malaysia has undeniably fallen behind in this respect. The Citigroup report highlighted two surveys which show Malaysia’s ranking to be below expectations.
Mercer’s 2009 Quality of Living survey ranks Kuala Lumpur at 75 out of 215 cities, unchanged from the year before even as Jakarta is moving up. A.T. Kearney’s Global Cities Index saw KL ranked 40 out of 60 cities.
“KL’s weaker rankings versus that of its regional peers could place it at a disadvantage when vying for foreign talent,’ the Citigroup report noted.
Malaysian Employers Federation executive director Shamsuddin Bardan was recently quoted on a website as saying that Malaysia’s ability to attract expatriates is being challenged.
He said it now has about 38,000 expatriates compared with 80,000 in the 1990s.
That decade was unusual, however, because massive construction projects like the Petronas Twin Towers and KL Towers attracted short-term technical expertise.
Malaysia’s image abroad has taken a bashing in recent years. The crime rate is often blamed, but it has also been marred by controversies over moral policing and religious disputes.
Andy Davidson, an expatriate who has lived in Malaysia for more than 20 years, told The Straits Times that there is some paranoia in the West concerning Muslim countries.
It does not help that Malaysia keeps making international news for cases like that of Kartika Sari Dewi Shukarno, who was ordered to be caned for drinking beer.
Najib found that out first-hand when he was in New York last month to meet foreign investors.
“One such issue and it takes us months to clear it up,” he was quoted as saying in the New Straits Times.
The good news is that the government is swinging into action to fight crime, with some early success.
It is also building a new economic zone from scratch in southern Johor.
It will have to move fast to show results.
With all the issues heaped against the lackluster image of Malaysia from corruption to religious intolerance and a potential powder keg for inter-racial violence and ethnic discrimination, it is small wonder that Malaysia will continue to lose out to its more globally attractive neigbours such as Vietnam and Indonesia.
The Malaysian Trades Union Congress (MTUC) call to the government to declare an amnesty to allow the estimated 2.1 million illegal foreign workers to leave the country is a worthy suggestion that the government should seriously consider. I thinks the amnesty proposal has all plus points, given the current economic and crime situation and local unemployment. 
