Unionists in Penang are sceptical about the federal government's economic liberalisation initiatives to open up part of the Malaysian service sectors to foreign investments, or what they described as "foreign capital invasion".

Malaysian Trades Union Congress Penang branch secretary K Veeriah cautioned that such investments do not guarantee long term economic success, the protection to local workforce and transfer of technology.

Although it would stimulate the export and gross domestic product growth in the country, he said, it would put the liberated sub-sectors at the mercy of foreigners, "who would invest, make money and disappear."

"In the end, it does not assure us sustainable growth, long term employment and manpower development," he told Malaysiakini after state-level May Day gathering in Seberang Perai mainland today.

Veeriah also raised questions on the viability and dynamism of foreign investments to develop the competency level and technology advancement of local sectors under the open policy.

He also called on the government to address the issue of whether the local counterparts are competent enough to compete with them.

"If not, will the foreigners help develop and upgrade our businessmen with their administrative and technical skills?" he asked.

Electrical Industry Workers' Union (EIWU) senior industrial relations officer N Balakrishnan said the arrival of foreign investments would also force the government to deregulate labour laws.

"Deregularisation of labour laws will reduce protection for local workers, such as on retrenchment, retirement benefits, safety and health.

"Although Malaysia is a sovereign state, we will end up deregulating labour laws in the name of liberalisation," he said, cautioning the open policy would allow foreigners to dominate the capital and employment markets.

Workers' Day celebration in Penang

Prime Minister Najib Abdul Razak recently announced that the government would be lifting the 30 percent Bumiputra equity requirement for 27 sub-sectors in the services industry as part of Malaysia's commitments to international free trade agreements.

The Malay corporate sector has cautioned this would lead to eventual abolition of the New Economy Policy (NEP).

NEP is a controversial socio-economic restructuring affirmative action program launched by the prime minister's late father Abdul Razak Abdul Rahman in 1971.

Although the policy was originally implemented to address the economic disparity among various communities in the country, many argued that the NEP had benefited only a few, especially those with political links with the ruling party.

Meanwhile, some 100 workers joined the May Day gathering in Penang led by state MTUC chairperson Abdul Razak Abdul Hamid.

They distributed fliers containing a nine-point union demand for more jobs, safeguards and minimum wage of RM900 for local workers.

The union called on the government to stop deregulation of labour laws, protect labour rights and prohibit recruitment of foreign manpower.

Among other demands are the introduction of retrenchment fund and, higher lay off and termination benefits.