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Kuala Lumpur, Tuesday (AFP) - Malaysian property developers may suffer losses of millions of dollars and thousands of hawkers and petty traders may have to close shop after a mass exodus of illegal foreign workers, officials and reports said Tuesday.

The Business Times quoted property developer Eddy Chen as saying companies were bracing to pay compensation of up to five million ringgit (1.3 million ringgit) a day for the expected late delivery of projects.

The newspaper said it would take two to three months for the situation to normalise once new foreign workers were hired and trained.

Chen said every month of work stoppage would cost developers another 150 million ringgit. "This is the price developers have to pay if they can't deliver their houses on time."

More than 300,000 mainly Indonesian illegal immigrants have left the country under a four-month amnesty program to escape jailing and caning under tough new immigration laws which came into effect August 1. The exodus has led to a severe labour shortage in the construction, plantation and services sectors where illegal workers were mainly employed.

There are some 750,000 legal foreign workers in Malaysia, who were supplemented by an estimated 600,000 illegals before the amnesty sent more than half of them scurrying home.

Chen said all five of his own projects have ground to a halt, with only 20 workers left from some 500 people employed daily. He said raids by the authorities have also sparked fear among legal foreign workers.

"Those who are left are afraid to go to work. Local staff, including project managers, are also jittery about the constant raids conducted by the police as everyone could be taken in for questioning," he said.

Chen added that developers were unlikely to take in illegal foreign workers as they would not risk being jailed and caned under the new immigration laws.

Under the laws, both illegal immigrants and their employers face a mandatory six months in jail and possibly up to six strokes of the cane.

The Federation of Hawkers and Petty Traders Malaysia said Tuesday that thousands of its members in Kuala Lumpur and other major cities may be forced to close shop due to a shortage of workers.

Its president Tan Thian Kooi said hawkers and petty traders were not allowed to employ legal foreign workers and most had relied on illegal workers mainly from Myanmar, Thailand, Vietnam and Indonesia. He said the federation, which has 150,000 members, would put in a fresh application to the government to legalise illegal workers after an earlier request was rejected.

"We are hoping that the government will at least allow us to take Myanmar and Thai workers as they are hard working, less problematic and don't get involved in crime," Tan added.

The Federation of Malaysian Manufacturers has warned that the deportations could hit the economy hard and urged the government to streamline and improve the recruitment procedures for foreign workers.

Indonesians topped the list of those who have returned home so far, with 273,244 people leaving, followed by more than 20,000 Indians and 17,000 Bangladeshis.

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