Kuala Lumpur,  14 February 2025: The Institute for Democracy and Economic Affairs (IDEAS) welcomes the government’s effort to provide legal employment rights to refugees registered with the United Nations High Commissioner for Refugees (UNHCR) as stated by Minister in the Prime Minister’s Department (Federal Territories), Dr Zaliha Mustafa in a written parliamentary reply yesterday. This significant step could enhance economic inclusion, reduce reliance on informal labour, and foster a more structured and rights-based approach to refugee management in Malaysia.

The government’s ongoing refinement of this policy should prioritise the formulation of clear, transparent, and enforceable guidelines. The inclusion of refugees in the formal labour market can benefit both the Malaysian economy and the refugees themselves by addressing labour shortages while ensuring better protections and working conditions.

Research by IDEAS, as outlined in our 2019 policy paper Economic Impact of Granting Refugees in Malaysia the Right to Work, underscores the significant economic benefits of providing refugees with legal employment rights. Our findings show that this policy could create over 4,000 jobs for Malaysians while having minimal impact on the local labour market. Projections indicate that if refugees were granted equitable access to education, their annual contribution to GDP could exceed RM6.5 billion by 2040, with tax contributions surpassing RM250 million annually. Additionally, refugee tax contributions alone are expected to rise above RM50 million per year, further strengthening national revenue streams.

To maximise these benefits, the policy paper recommends that the government establish a comprehensive legal framework that facilitates refugee employment while safeguarding the local workforce. Key recommendations include:

• Developing a structured work permit system that aligns with Malaysia’s labour market needs.
• Ensuring fair wages and working conditions to prevent exploitation.
• Implementing skills assessments to match refugee talent with industry demand.
• Strengthening multi-stakeholder engagement, including private sector participation and civil society collaboration, to support refugee integration.
• Expanding access to education and vocational training to enhance long-term economic contributions.
• Enhancing financial inclusion measures to support refugee economic participation.

By implementing these measures, Malaysia can unlock the full economic potential of refugee communities, fostering sustainable national development and a more inclusive workforce.

IDEAS also welcomes the collaboration between UNHCR and TNG Digital Sdn Bhd, enabling refugees in Malaysia to access the Touch ‘n Go e-wallet. By allowing account registration with UNHCR cards, this initiative removes key financial barriers, promoting economic empowerment and digital inclusion as Malaysia moves towards a cashless society.

Aira Azhari, Acting CEO of IDEAS, highlighted the potential of this policy in creating economic opportunities while upholding Malaysia’s humanitarian commitments. “Formal employment rights for refugees is a significant step in empowering refugees while contributing to Malaysia’s economy. A well-regulated system can  mitigate concerns about job displacement among citizens, and help reduce exploitative practices that affect refugees most seriously. The 192,240 refugees Malaysia hosts currently exist in a legal vacuum, which dehumanises and worsens their already vulnerable state. Formal employment is a welcome step in improving this situation,” she said.

IDEAS calls on the government to ensure this proposal translates into a clear and actionable policy framework. To support these efforts, IDEAS stands ready to collaborate with key stakeholders to facilitate a smooth and impactful implementation.

For more details, read our policy paper Economic Impact of Granting Refugees in Malaysia the Right to Work

— END—

Download the Media Statement PDF File Here

For enquiries, please contact:
Ryan Panicker
Assistant Manager, Advocacy and Events
T: 03 – 2070 8881/8882 | E: ryannesh@ideas.org.my