Foreign workers, Refugees, and Business licences

I read the news reports in TheStar, Businesses want illegal foreign workers legalised in which it was reported that a request was made by a business group consisting of several associations, to legalise the approximately 40,000 foreign workers working in Malaysian restaurants without permits.

My question to the relevant Ministries responsible for the "import" of foreign workers, is, How did 40,000 foreign workers manage to enter the country illegally and work in the restaurants without permits? If the Govt then legalises such workers, would it not tell everyone that it is alright to get the illegal workers into the country first, then "legalise" them if they are caught subsequently? Sounds crazy to me.

In the second report Body willing to give loans to refugees.. it was stated that a NGO is willing to loan money to refugees, if The govt would give licences for them to operate businesses. That is a noble idea, but it has brought to my mind the question regarding your earlier reports that foreign businesses have taken over Klang alleys, and also reports of Jalan Silang and Petaling Street in KL, the Selayang Wholesale market, among others, are also filled with businesses operated by foreign 'workers'.

My question here is, If a business permit is required before the foreigners are allowed to operate, how come the local authorities have allowed such a large number of foreigners to take over the country's retailing business? Will there not be harmful social consequences of these foreigners crowding out the locals? Sounds also crazy to me