Boycott: At what cost to Malaysian workers?

IN Malaysia, the ongoing boycotts targeting international brands linked to Israel have triggered a profound debate, revealing a complex interplay between political expression and economic reality.

As public sentiment swirls around these boycotts, the impact on local workers has become increasingly pronounced, raising urgent questions about the balance between solidarity and livelihood.

For many Malaysians, the boycott represented a vital avenue to voice solidarity with their Muslim counterparts in Palestine.

Yet, this political statement carried significant consequences, echoing beyond the realm of ideology and directly affecting Malaysian employees working for these boycotted companies.

The dilemma raises an important question: Is the moral imperative of the boycott worth the cost to local workers?

Economists, including Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid, have voiced concerns over the repercussions of such actions on employment.

While they acknowledged that job losses were regrettable, they also suggested that those displaced might find new opportunities in Malaysia’s evolving job market.

“What we do know is that, with the flow of information, people can form judgments and make decisions, which inevitably affects businesses.

"At the same time, as a nation, we certainly do not want to project an image that we are not pro-business or unwelcoming to investors.

“Ideally, we should encourage any brand to come and operate here.

"It is a fine balance to maintain, especially given the current situation in the Middle East, which is beyond our control and shows no clear end in sight.

“As long as this continues, perceptions and information will keep circulating, influencing how businesses are affected,” he told Sinar Daily when contacted recently.

In a landscape where perceptions can shape economic realities, Afzanizam highlighted the delicate balance Malaysia must maintain.

The presence of international brands often stimulates job creation and fosters connectivity across supply chains, benefiting local economies.

“Their presence stimulates connectivity across supply chains, including the procurement of raw materials, which often involved partnerships with local businesses. This generates economic benefits through these linkages.

“The overall contribution of these brands to the Malaysian economy is significant, with a notable multiplier effect that positively impacts various sectors,” he said.

However, as boycotts persisted, the human cost became starkly evident. Afzanizam pointed out that while employment levels in the affected sectors may not be exceedingly high, the transition for those displaced could be arduous.

“Employment levels in this sector may not be too high, but for those affected, transitioning to different industries could take time.

"During this period, they may face unemployment, putting them at risk of falling into poverty. This is where government intervention is needed to provide a buffer.

“While we do have employment insurance schemes that offer temporary financial relief, the real challenge is helping these workers find new jobs that align with their existing skill sets.

"For example, those coming from the food and beverage (F&B) industry might struggle to transition to a different field, such as hospitality, where the required skills are different.

“There is also the possibility that any new job might not offer the same level of income they previously earned, potentially leading to financial difficulties,” he said.

Echoing Afzanizam's sentiments, Universiti Kebangsaan Malaysia (UKM), director of International Trade and Investment at the Institute of Malaysian and International Studies (Ikmas) and economist, Professor Dr Sufian Jusoh highlighted the significant economic impact of these boycotts.

“Franchisees are still required to pay fees, yet many outlets were forced to close.

"The majority of employees at these establishments are Malaysians, meaning they bear the brunt of the situation, often losing their jobs.

"This raises a critical issue that needs to be addressed.

"Some might argue this is an ‘opportunity cost’, where someone has to suffer due to another’s moral decision. However, we must take this into serious consideration.

“Continued boycotts have led to reports of businesses incurring losses, with a few having to close their outlets, resulting in hundreds of Malaysian workers losing their jobs. These individuals often rely heavily on their income to make ends meet,” he said.

Sufian stressed that while everyone has the right to make their own choices, it is important to recognise that there are alternatives available in Malaysia.

“Those who have lost their jobs might have other employment opportunities. In this sense, Malaysia may be in a relatively better position because of these options.

“In contrast, from my experience in Indonesia, boycotts tend to last only a week or two, after which people return to buying from the same international brands.

“It is not necessarily because they lack alternatives, but rather out of concern for the workers, knowing they may not have many other job opportunities,” he added.