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Managing Labour Migration in Malaysia: Guest Worker Programs and the Regularisation of Irregular Labour Migrants as a Policy Instrument

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Malaysia was built on immigration and, like other labour-importing countries, acknowledges the case for temporary labour migration as a solution to labour shortages in the country. The government has endorsed guest worker programs that are typically short term, and that include a range of restrictions to regulate the movement of low-skilled foreign workers. Most exclude explicit reference to labour protections. The State’s low-skilled labour policy essentially vacillates between ensuring a continual supply of cheap labour and instigating crackdowns on undocumented migrants. Although the State originally imposed higher levies on skilled migrants, it has recently amended this policy and currently offers skilled migrants pathways to permanent residence and citizenship. Nevertheless, the sustained reliance on cheap labour and the way the policy is managed are preventing Malaysia from moving up the value chain. Additionally, the activities of labour brokers, disparities in the foreign labour levy system, and demand for labour have contributed to the expansion of irregular migration. Like other countries, Malaysia also relies on the regularisation of irregular migrants as a policy tool to extend legal status to undocumented economic migrants.
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Managing Labour Migration in Malaysia:
Guest Worker Programs and the
Regularisation of Irregular Labour
Migrants as a Policy Instrument
Amarjit Kaura
a The University of New England
Published online: 21 Jul 2014.
To cite this article: Amarjit Kaur (2014) Managing Labour Migration in Malaysia: Guest Worker
Programs and the Regularisation of Irregular Labour Migrants as a Policy Instrument, Asian Studies
Review, 38:3, 345-366, DOI: 10.1080/10357823.2014.934659
To link to this article: http://dx.doi.org/10.1080/10357823.2014.934659
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Managing Labour Migration in
Malaysia: Guest Worker Programs and
the Regularisation of Irregular Labour
Migrants as a Policy Instrument
AMARJIT KAUR*
The University of New England
Abstract: Malaysia was built on immigration and, like other labour-importing
countries, acknowledges the case for temporary labour migration as a solution to
labour shortages in the country. The government has endorsed guest worker pro-
grams that are typically short term, and that include a range of restrictions to
regulate the movement of low-skilled foreign workers. Most exclude explicit
reference to labour protections. The States low-skilled labour policy essentially
vacillates between ensuring a continual supply of cheap labour and instigating
crackdowns on undocumented migrants. Although the State originally imposed
higher levies on skilled migrants, it has recently amended this policy and
currently offers skilled migrants pathways to permanent residence and citizenship.
Nevertheless, the sustained reliance on cheap labour and the way the policy is
managed are preventing Malaysia from moving up the value chain. Additionally,
the activities of labour brokers, disparities in the foreign labour levy system, and
demand for labour have contributed to the expansion of irregular migration. Like
other countries, Malaysia also relies on the regularisation of irregular migrants
as a policy tool to extend legal status to undocumented economic migrants.
Keywords: Malaysia, governance of migration, labour policy, guest workers,
irregular migration, outsourcing of labour
Introduction: Labour Migration in Historical and Contemporary Contexts
Migration has been an enduring feature of Malayan/Malaysian history. In the late nine-
teenth and early twentieth centuries, Britain embarked on the administrative centralisation
of the three British Malayaadministrative divisions in the Straits of Melaka namely,
*Correspondence Address:akaur@une.edu.au
© 2014 Asian Studies Association of Australia
Asian Studies Review, 2014
Vol. 38, No. 3, 345366, http://dx.doi.org/10.1080/10357823.2014.934659
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the East India Companys Straits Settlements (Singapore, Penang and Melaka); the
Federated Malay States (Perak, Selangor, Negeri Sembilan and Pahang); and the Unfeder-
ated Malay States (Kedah, Kelantan, Johor and Perlis). This centralisation policy enabled
Britain to develop and align these stateseconomic activities vis-à-vis British commercial
interests and assisted the statesintegration into the international economy and production
systems. Imperial frameworks and more efcient shipping also led to improved
transoceanic travel networks, facilitating an empire-wide sourcing of labour and mass
migration. The labour migrations to Malaya comprised mainly Indian and Chinese work-
ers who were recruited under indenture contracts or labour servitude arrangements to
work in mining and plantation enterprises (Kaur, 2004a, Chapters 2 and 3). Generally,
open borders and regional specialisation in specic trade commodities shaped migration
processes and migrant workersdestinations and determined that prior to World War II
labour migrants were predominantly male. According to Huff and Caggiano (2008), the
immigration rate (immigrants per 1,000 population) of British Malaya (comprising the
Straits Settlements, the Federated Malay States and the Unfederated Malay States) was
the highest in the world throughout the period 18811939. In the early twentieth century,
too, a single census superintendent undertook a combined population census for both Pen-
insular Malaysia and Singapore for 1921, 1931 and 1947 (Saw, 1988, p. 8). Wars and
depressed trade conditions together with the colonial administrations restrictions on Chi-
nese immigration resulted in reduced transnational movements to British Malaya in the
late 1930s and 1940s.
By the 1930s, a growing national consciousness based on ethnicity and ancestry had
also become evident among the Malays, prompted in part by the depressed economic
conditions in Malaya. The Japanese Occupation of Malaya both exacerbated ethnic sen-
sitivities and emphasised a unitary national identity based on indigeneity. Thus, when
the British returned, they found a completely changed environment. By this stage
Malaya had also become an immigrant nation and the Chinese and Indians outnum-
bered the Malays, a category that included indigenous Malays, Aboriginals or Orang
Asli, and the Indonesians (Ooi, 1963, p. 124). The Indonesians, who were predomi-
nantly from Java, had been recruited as indentured workers by planters through
licensed recruiting rms regulated by the Dutch colonial administration in Indonesia to
meet labour shortages in the Malay States (Kaur, 2005). Jackson (1961, pp. 12930)
states that it was also quite common for Javanese workers to either acquire land from
Malay landowners or become squatters in the Malay States when their work contracts
expired. Some also turned to rice cultivation to make a living. While the British subse-
quently negotiated for a nation-state that included all ethnic groups, the concept of indi-
genisation advanced during the Japanese Occupation became more pronounced. After
1957, the independent Malayan government prohibited low-skilled labour immigration
but allowed skilled migrants right of entry under new immigration conditions (Kaur,
2004b). In the 1980s and 1990s, globalisation and the further integration of economic
activities and labour markets saw sustained immigration associated with the economic
boom in Asia and Southeast Asia. At this point labour migration again became an inte-
gral component of broader socioeconomic transformative processes in the region.
Several writers, including Massey et al. (1993) and Kritz and Zlotnik (1992), stress the
importance of migration as an interdependent dynamic system, with its own web of
interconnecting sub-systems between sending and receiving countries, and of established
colonial links and networks that sustain and facilitate migration ows (Kaur, 2009).
Managing Labour Migration in Malaysia 346
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Southeast Asia may thus be considered as forming one labour migration system. Two
groups of states may be identied in this system based upon whether they are mainly a
source of emigration or mainly a destination for immigration. The Philippines, Cambodia,
Burma, Laos, Vietnam and Indonesia are in the rst group while Singapore, Brunei,
Malaysia and Thailand are in the second. Further, two principal migration corridors can
also be identied: the archipelagic Association of Southeast Asian Nations (ASEAN) cor-
ridor and the Mekong sub-regional corridor. In the rst corridor, Malaysia, Singapore and
Brunei are the major destination countries, recruiting workers principally from Indonesia
and the Philippines. In the second, Thailand is the main destination for migrant workers
from countries through which the Mekong River ows that is, Burma, Cambodia, Laos
and Vietnam. Concurrently, the organisation of growth triangles or sub-regions in the
regional grouping ASEAN, created specically to facilitate trade, capital and labour
movements, has produced smaller sub-systems.
This study considers the management of temporary labour migration in Malaysia
and the use of the regularisation of irregular migrants as a policy instrument in two
sections. The rst section examines the emergence of regional migration pathways
in Southeast Asia from the 1970s to the early 1990s and the development of tem-
porary guest worker programs in Malaysia. During this period, Malaysia adopted a
liberal policy toward foreign labour and permitted thousands of temporary migrant
workers into the country to ll the cheap labour gap in the various sectors. The
second section explores Malaysias immigration frameworks since the 1990s and
contextualises the governments expanded role in regulating labour migration along-
side endorsing bilateral accords with labour-sending countries. This section also
focuses on Malaysias continuing reliance on foreign investment to create jobs and
compete with lower-wage countries in the region, largely due to its bumiputera
policy.
The two sections provide a background to the conversation on undocumented migra-
tion and the governments response to irregular migration. Malaysias on-going security
and border operations are explored from the perspective of ever-increasing numbers of
detention centres and the countrys reliance on RELA, an armed non-state actor, to
manage the inux of irregular migrants. Additionally, the governments regularisation
of irregular migrants, which is designed to ensure the continued growth of the labour
force, has made the countrys immigration policy a contentious issue nationally. This
study focuses on Peninsular Malaysia for two reasons. First, immigration is an autono-
mous matter in each of the three Malaysian political entities Peninsular Malaysia,
Sabah and Sarawak so it is reasonable to follow this line of delineation. Second, Pen-
insular Malaysia is not only the largest and most economically signicant political
entity but its situation is quite different from that of the other two entities due to the
continuing heavy dependence on foreign labour. In Sabah, irregular migration has
become an intractable problem due to the states long porous land borders with Indone-
sia, past migration connections and other political issues (see, for example, Aliran,
2001). In Sarawak, the need to recruit foreign labour for the agricultural sector during
the Brooke period was not a crucial factor since the Brookes invitedChinese agricul-
tural settlers to grow crops and populate the state (Kaur, 1995). Indian migrants in both
states were recruited mainly for the police and other government departments.
347 Amarjit Kaur
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Labour Migration in Peninsular Malaysia: From Regional Migration Pathways to
a Guest Worker Program, 1970s Early 1990s
Shifting Immigration Agenda
Against the background of previous concerns about uncontrolledChinese and Indian
immigration and a new border enforcement strategy, in 1959 the Malayan government
instigated its rst immigration-related legislation, the Immigration Act. This Act was
intended to regulate the entry of non-citizens into the country and essentially restricted
low-skilled migration. Then, following the creation of Malaysia, the government passed
the Employment Restriction Act (1968), which made admission of non-citizens to the
labour market conditional on the possession of work permits, making Malaysian
employers obtain permits for non-citizen workers. The work permit system was also
intended to ensure that only skilled non-citizens would be allowed admission into the
country (Kaur, 2009). This Act established that non-citizens had no rights of employ-
ment, regardless of any earlier connections to or residence in Malaya. Hence foreign
Asians who had not taken out citizenship had to leave or face repatriation. It is esti-
mated that thousands of Indian and Chinese plantation workers were forced to leave
the country, creating labour shortages in the plantation sector (Migration News, April
1994).
Malaysias foreign labour regulatory frameworks in this early phase were not aimed
at addressing labour shortages, but rather focused on expelling Indian and Chinese
non-citizens. Nevertheless, following complaints from planters, the government turned
a blind eye to the recruitment of Indonesian and Thai migrants by labour brokers acting
on behalf of Malaysian employers. In subsequent years Indonesians were also used by
politicians to boost the electoral power base of the indigenousMalays vis-à-vis the
Chinese and Indian Malaysians and found it much easier to acquire citizenship. It is
widely acknowledged that during Dr Mahathir Mohamads premiership, identity cards
granting citizenship to illegal Indonesian and Filipino migrants in Sabah were provided
in exchange for votes and it is estimated that there was an increase in illegal immi-
grants of 390 per centthat surpassed the rate in Sarawak (146 per cent) and Peninsular
Malaysia (Nomy Nozwir, Bumburing quits BN, pledges to aid Pakatan,The Malay-
sian Insider, 29 July 2012). Crucially, irregularIndonesian migrants utilised informal
entry channels to access jobs in the country, building on their pre-World War II social
networks and connections and shared history with Indonesian communities in the coun-
try. They thus formed the main source of low-skilled foreign workers until the imple-
mentation of a formal less-skilled labour recruitment policy around 1970 (Kaur, 2005;
Kassim, 2005). In this early phase, therefore, the Malaysian government did not have a
comprehensive policy to address labour shortages but was surreptitiously allowing
irregular labour migration, mainly from Indonesia.
Following the 13 May 1969 race riots in Malaysia and a leadership change, the gov-
ernment adjusted its development policies and instigated an interventionist economic
strategy, known as the New Economic Policy (NEP). The NEP was designed to
enhance Malaysias longer-term growth objectives and to establish the supremacy of
Malay interests. Additionally, the government became the pre-eminent player in eco-
nomic development and established poverty reduction and income redistribution pro-
grams based on afrmative action for the Malays. Concurrently, Malaysia maintained
an open economy, commenced industrial policies that correlated with global production
Managing Labour Migration in Malaysia 348
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chains and the new international division of labour, and started major public infrastruc-
ture projects. There were continuities in agricultural production and large-scale agricul-
ture, originally centred on rubber but expanding to include oil palm. Under the
auspices of the Federal Land Development Authority (FELDA), extensive tracts of for-
est were cleared as government agencies developed lands for Malay settlers, a process
associated with the capitalisation of smallholder agriculture. The governments land
settlement projects took place against the backdrop of a sustained fertility decline,
restrictive immigration policies and predictable labour shortages (Sundaram, 1990).
During this period, demand for women workers in the manufacturing sector also
expanded, especially in labour-intensive industries in the export-processing zones
(Kaur, 2004a, Chapter 8). It is well established that women form an important source
of labour in the agricultural sector and womens internal migration to the urban areas
accordingly impacted on the supply of agricultural labour. The gap between real wages
in the manufacturing sector and in agriculture which had widened from one in two in
1967 to one in three in 1981 (Migration News, April 1994)also led to increased
rural-urban migration and further labour shortages. The construction boom in the urban
centres also aggravated the labour situation and consequently growing numbers of
Indonesian illegalmigrants entered the country, utilising their existing social net-
works and pre-existing channels. The government responded by introducing new
enforcement measures and established a Committee for the Recruitment of Foreign
Workers in 1982. The intention was to meet labour shortages, particularly in the planta-
tion sector but also in other sectors, by permitting legal recruitment of foreign workers.
Initially, regional migration pathways facilitated recruitment of foreign workers. Never-
theless, since the demand for labour exceeded supply and government machinery was
ill-equipped to deal with large labour ows, irregular migration into the country contin-
ued to grow (Kaur, 2010; Kanapathy, 2008, pp. 67).
Malaysia then decided that recruitment of low-skilled workers was essential for labour
force growth and would deliver benets to the economy. This led to a revised strategy
on foreign labour recruitment, and so the government developed a Comprehensive Pol-
icy on the Recruitment of Foreign Workers in 1991 that established the terms and condi-
tions for the employment of foreign labour. As in Singapore, Malaysia introduced an
annual levy or charge on foreign workers to regulate the foreign labour supply. Thus a
temporary or guest worker program was instituted whereby foreign workers were
recruited under a work-permit system and were bound to their employers and particular
job locality (Kaur, 2010). Signicantly, the workersrecruitment coincided with changes
in the Malaysian labour market, which had undergone considerable fragmentation. The
earlier model of the long-term relationship between employer and employee (for exam-
ple, in the pre-World War II rubber plantation sector), where there was a settled work-
force that was provided with housing and other facilities and had some labour
protections, was supplanted by a range of non-standardor atypicalforms of employ-
ment (see ILO, 1996, p. 15). Chief among the new employment practices was contract
labour, which is mainly driven by demand-side factors. Contract work therefore became
the preferred model of temporary employment in the plantation, manufacturing and con-
struction sectors. The services sector in the country was also transformed and foreign
domestic workers were admitted under temporary work programs.
Additionally, the generally labour-intensive sectors where the migrant workers were
clustered were the non-traded sectors, such as construction, agriculture and services.
349 Amarjit Kaur
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These sectors are known for their variable demand and unpredictability, and migrant
workers were considered a exible resource in production processes. Foreign workers
therefore had, and continue to have, few privileges and are not guaranteed the same
protections as local workers under Malaysian labour laws. Employers also transferred
some managerial tasks to sub-contractors of labour (see, for example, Devi, 1986).
Hence uneven economic growth between Southeast Asian (and Asian) states, accompa-
nied by enhanced cooperation between these states and the needs of capital, provided
conditions for the appropriation of segments of the working class from poorer states
(cf. Hewison and Young, 2006).
Intergovernmental Agreements and Regulation of Migrant Workers
Malaysia was well positioned to take advantage of the benets of migration and
became a regional migration hub. Aside from the centralisation of migration and a
comprehensive foreign labour policy, the government signed labour accords with neigh-
bouring countries. Under these accords migrant workers were recruited in their own
countries and provided with the necessary documentation to migrate for work in Malay-
sia. In 1984, Malaysia signed the Medan Agreement with Indonesia to recruit Indone-
sian workers for specic employment sectors (Hosen, 2005). This Malaysia-Indonesia
labour supply agreement facilitated the recruitment of Indonesian workers for Malay-
sian plantations, government land settlement schemes, and the construction sector. Gen-
erally, most of the newforeign workers comprised irregular Indonesian migrants
recruited from the Indonesian squatter settlements in Kuala Lumpur. It has been esti-
mated that there were around 500,000 irregular migrant workers working in the planta-
tion sector in Peninsular and East Malaysia in 1984 (IOM, 2008, p. 56). Then, in 1985,
Malaysia signed a labour accord with the Philippines for the recruitment of domestic
workers. Subsequently, labour accords were signed with Bangladesh and Thailand in
198586, permitting employers to recruit workers through approved labour brokers for
projected labour shortages in the plantation and other sectors, despite opposition from
the Malaysian Trades Union Congress (MTUC) (Kaur, 2004c).
Typically, government agencies played an important role in the trade in foreign work-
ers. In Indonesia, a Centre for Overseas Employment was established in the Manpower
Department to promote labour migration and oversee labour ows. Private labour bro-
kers and intermediaries meanwhile offered a multiplicity of services, including loans,
money-changing facilities and assistance with travel arrangements. In Malaysia, private
labour brokers sent agents to Indonesia to deal with their Indonesian counterparts and
provide information on Malaysian employersmanpower requirements and job descrip-
tions. These brokers and the commercialisation of recruitment processes corresponded
with the growth of a migration industry in both countries. Concurrently, weak immigra-
tion enforcement structures led to larger inows of irregular migrants to plug gaps in
designated sectors. Malaysia then suspended foreign labour recruitment in 1986 to man-
age irregular migration against the background of the general economic downturn.
Nevertheless, the suspension was short-lived and the government subsequently resorted
to the regularisation of the undocumented workers by announcing an amnesty period.
Undocumented workers in the plantation sector were advised to register and legalise
their status in Malaysia, despite protests from trade unionists and members of the public.
Managing Labour Migration in Malaysia 350
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The legalisation program for irregular migrants had modest cooperation from plantation
senior management.
During this enforcement exercise (carried out in Peninsular Malaysia from November
1991 until 30 June 1992), undocumented workers in the domestic work, construction,
plantation, manufacturing and other service sectors had to submit themselves for regis-
tration at special registration centres set up by the Immigration Department. The
responsibility for registration rested with the workers and their employers. Employers
were also required to transport the workers after the registration exercise to their
respective embassies to obtain temporary travel papers and undergo medical checks.
Not surprisingly, Indonesians accounted for 83 per cent of the 442,276 workers who
presented themselves for registration during this period (Kassim, 1995, p. 15). Workers
who had communicable diseases were deported while others were allowed to return to
the Immigration Department for temporary work permits. Border enforcement was also
stepped up to prevent further illegal entry and the State posted Police Field Force per-
sonnel along the main coastal areas in the Malay Peninsula across from Indonesian ter-
ritory (Kaur, 2006).
The government then followed up with raids on known squatter settlements and con-
struction sites to weed out irregular workers who had not registered under the program.
Additionally, Malaysia instigated an on-going border security and surveillance program,
known as Ops Nyah (Operation Expunge) to prevent further entry of undocumented
workers. Crackdowns on some recruiters and employers of irregular workers, and raids
on work sites, dwellings and known hiding places supplemented these programs, along-
side arrests of corrupt immigration ofcials and police. Employers who hired irregular
workers were also targeted during this exercise (see Kaur, 2006). The heightened
security focus correlated with the need to regulate foreign labour inows and improve
data collection. As stated previously, Malaysia also introduced an annual levy (or tax)
on migrant workers in the 1991/1992 national budget, ostensibly to discourage the util-
isation of and reliance upon foreign workers. The levy varied according to sector and
migrantsskill categories (general, semi-skilled and unskilled), as shown in Table 1,
and was payable by either employers or the foreign workers. As to be expected,
employers made the workers pay the levy. Levies were increased in subsequent years
and correlated with global economic conditions and the demand for Malaysian
commodities.
The levy imposed on general workers was lower than that for other migrant labour
categories. Interestingly, skilled workers and professionals known as expatriates”–
were initially required to pay higher levies on the assumption that there were no critical
Table 1. Malaysia Foreign Labour (Guest Worker) Annual Levy (October 1991) by Sector and
Skill Category
Sector General Category Semi-skilled Category Unskilled Category
Agriculture RM420 RM600 RM720
Construction RM420 RM600 RM900
Manufacturing RM420 RM600 RM900
Services RM360 RM540 RM720
Source: Adapted from Devadason and Chan (2010).
351 Amarjit Kaur
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labour shortages in the highly-skilled/professional category. During this period, Singa-
pore imposed a higher levy on low-skilled workers and a correspondingly lower levy
on highly-skilled workers (Ruppert, 1999). Nevertheless, in the past decade the Malay-
sian government has devised new entry regulations to attract highly-skilled migrants
that include longer periods of stay, other forms of social protection, and rights to secure
citizenship (World Bank, 2013). This policy change is consistent with the governments
aspiration to achieve developed nation status by 2020.
Despite these measures, poorer economic conditions in neighbouring countries con-
tinued to attract large numbers of undocumented migrants to Malaysia. The government
held employers and labour brokers responsible for the irregular migrants and therefore
required employers to advertise in the local newspapers and liaise with local Employ-
ment Service ofcials. If local workers were unavailable, employers had to contact the
Ministry of Human Resources, which then approved the employersapplications. Only
then were employers permitted to recruit foreign workers via Malaysian labour brokers.
These brokers then contacted their counterparts in the sending countries who had to
provide full details of potential workers to be sent out to Malaysia. These arrangements
were intended to ensure that only authorised workers were admitted into the country,
consistent with the governments policy on irregular migration. Nevertheless, irregular
migration continued to increase.
Malaysia then made further modications to its labour management policy to halt irreg-
ular migration. Recruitment of new labour hires was suspended but eligibleemployers
were allowed to hire irregular workers from among those incarcerated in immigration
detention centres. The employerseligibility for hiring the irregularworkers was con-
tingent on them making the case for their labour needs and subsequent verication by the
relevant migration management authority. Thus the new prerequisite namely, verica-
tion of employerslabour requirements in the initial regularisation of irregular migrant
procedures facilitated the centralisation of migration management. Consequently, not all
irregular migrants were regularised and the surplus to requirementsmigrants were
either expelled or repatriated (Kaur, 2006). The government also tightened the work-
permit system by granting only one-year, renewable work permits. Migrant workers fur-
thermore had to obtain approval from the Immigration Department in order to change
jobs or employers, and they were liable to nes or imprisonment if they breached these
regulations. Consequently, the responsibility for changing jobs or employers was con-
signed to individual workers. This situation was fraught with tension since labour brokers
usually held on to the workerswork permits for safekeeping. Employers often had no
means of checking on the validity of the work permits or ensuring that workers were
recruited lawfully. Some were allegedly complicit in the recruitment arrangements.
Renewed debate on the guest worker program resulted in further policy changes on
foreign worker recruitment and greater inter-departmental coordination. As stated previ-
ously, a Cabinet Committee on Foreign Workers had been formed to coordinate and
regulate foreign labour recruitment processes. The Committee was required to provide
independent oversight and review the States recruitment strategy. The government sub-
sequently formed a new committee in the Ministry of Human Resources to handle for-
eign labour employment and incorporated intergovernmental cooperation in labour
recruitment to ensure transparency in recruitment procedures. This policy shift also
enabled the government to cast its migrant worker recruitment net into the wider Asian
seas (Kaur, 2005). Simultaneously, Malaysias foreign labour policy became closely
Managing Labour Migration in Malaysia 352
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intertwined with border control-cum-law enforcement strategies. Henceforth, border
controls were tacit in the management of foreign labour recruitment. The policy instru-
ment of regularisation of irregular migrants was also viewed as a practical approach for
labour force growth.
Malaysias response to irregular migration ows also foreshadowed what was soon
after to become a distinctive pattern in the governments centralised migration manage-
ment policy. The systematic policy sequence is evocative of what has been generally
described elsewhere as running in circles. Initially, the government allows the regu-
latedbut inadequatelysupervised recruitment of foreign labour for the various eco-
nomic sectors in the country under the mainly cross-border networkdescribed below.
When economic conditions deteriorate the government concedes that the large irregular
migrant inows pose a threat to the States sovereignty. Next, it takes steps to control
the inux of irregular migrants by implementing a freeze on new admissions, followed
by roundups/amnesty-cum-regularisation programs (cf. IOM, 2008, p. 55). The police
then conduct raids at workplaces and dwellings to verify migrantsstatus, and irregular
migrants are sent to immigrant detention camps (IDCs) pending deportation. The gov-
ernment then deploys the Police Field Force to apprehend migrants who make unau-
thorised landings and subsequently incarcerates them in detention centres, prior to
deportation. The police also pursue migrants who ee the scene by escaping into the
surrounding jungle and those who are caught are sent to the IDCs (Kaur, 2005).
This review of Malaysias immigration regulatory frameworks and processes is
essential to an understanding of the complexities of the management of labour migra-
tion, particularly Indonesian migration, to Malaysia. As discussed earlier, Indonesian
labour migration did not take place randomly. It happened due to earlier historical and
colonial linkages, the governments indigenisation policy and the socio-cultural net-
works that facilitated migration. According to an article in the Washington Post, Malay-
sia would not succeed in keeping Indonesians outsince migration from Indonesia to
Malaysia is less a trend than an industry, creating an entrenched subculture of migrants,
labor brokers, prostitutes and corrupt immigration authorities who have created a
massive cross-border network(Washington Post, 7 April 1998).
Contextualising Immigration Policy and Migration Management Frameworks,
Mid-1990s 2011
Policy and Practice
From the mid-1990s, Malaysia invested an ever-increasing amount of resources in
enforcement instruments by enhancing immigration controls and disrupting illegal activi-
ties. Nevertheless, irregular migration and the illegal employment of undocumented
migrants continued to thrive, largely due to the actions of people smugglers, trafckers,
corrupt ofcials, unscrupulous employers, not to mention the undocumented migrants
themselves. This situation was also due to the increased costs of migration, brought
about by tougher border controls which deterred migrantsreturn to their country of ori-
gin, and subsequent re-entry on payment of brokersand agentsfees, travel costs and
employment-related levies. Low-skilled migrants are hired on short-term contracts (nor-
mally three years). They are allowed to extend their contracts for limited periods. But
they are required to return to their countries of origin and begin the whole process all
353 Amarjit Kaur
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over again. They thus have to incur recruitment and related costs all over again. Conse-
quently, they prefer to remain in an irregularsituation upon completion of initial con-
tracts. Increasingly, too, the Malaysian government has invested resources in post-entry
enforcement, especially the utilisation of regularisation as a policy instrument.
Malaysia then decided to concentrate on both regulatory frameworks and the direct
administration of foreign labour recruitment. Changes in the guest worker program
allowed specic labour market demands to be met in the short term while ensuring
greater labour exibility. In late 1994 the government formed a Special Task Force on
Foreign Labour to handle/process foreign labour applications. This Task Force was
intended to be a one-stop agency and it took over the task of processing foreign labour
approvals from the Immigration Department. Since domestic workers were not consid-
ered formalemployees, private labour agencies were allowed to organise and process
applications for them, prior to submitting the applications to the Immigration Depart-
ment. The Immigration Departments role was also expanded to include management of
foreign labour recruitment; the identication of appropriatelabour-source countries;
and determination of eligibility of sectors/rms requiring foreign workers. Four sectors
agriculture, manufacturing, services and construction were considered eligible for
foreign worker employment, based on their contribution to the export-oriented compo-
nent of the Malaysian economy and/or role in sustaining Malaysias continued eco-
nomic growth. Other eligibility factors for individual rms included considerations
such as a rms minimum capital investment and its specic local labour to foreign
labour ratios in the workforce, as listed in Table 2.
The government also amended the duration of the work permits/contracts. In the
early stages, foreign workers had been hired on one-year contracts, and employers were
allowed to renew their contracts for up to seven years. Subsequently the initial contract
was amended to three years with further annual extension on a year-to-year basis until
the fth year. Further extensions were allowed only upon application to relevant certify-
ing authorities after the fth year, and with the workers status being upgraded to that
of a skilled worker (Shamsuddin Barden, 2006).
Enterprises and employers also had to demonstrate their inability/difculty in recruit-
ing local workers and make certain there was no discrimination between foreign and
local workers. The revised policy indirectly stipulated a Malaysianvariant of labour
market testing and the hiring of local workers alongside foreign workers in the main
sectors. These conditions were rarely enforced and the legacy from the previous policy
meant that foreign labour numbers (documented and undocumented) continued to grow
without hindrance by legislation.
The great increase in size of the documented foreign workforce by sector (per cent)
for the period 19992008 is shown in Figure 1.
Documented foreign workers were predominantly employed in the manufacturing
and plantation sectors, followed by the construction, services and agricultural sectors.
During this period, Malaysia also implemented a basic approach to ensuring regu-
latedmigration by signing Memoranda of Understanding (MOU) with labour-sending
countries. The government currently has agreements with 16 countries for recruitment
of migrant workers, as listed in Table 3. The Table also details employment restrictions
by race and gender in specied occupational sectors, and the governments bias for
workers from certain countries, and mirrors the efforts made to reduce dependence on
any one country.
Managing Labour Migration in Malaysia 354
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Indonesians represent the largest foreign migrant labour cohort in the foreign work-
force, followed by Bangladeshis, as shown in Figure 2. The growth of the Bangladeshi
workforce has corresponded to Malaysias adoption of the labour outsourcing policy
(discussed below).
The high migrant labour intakes also point to Malaysias position in the new interna-
tional division of labour, the pre-eminence of its primary commodity exports, and
labour-intensive manufacturing export competitiveness. It was also touted as a Third
World success story in the 1980s, but Malaysiasbumiputera policy (aka indigenisation
of assets/resources and afrmative action policies), party capitalism and government-
party collusion (see Gomez and Sundaram, 1997) have continued to adversely impact
Malaysias economic dynamism. The government continues to state that it will phase
out labour-intensive industries and move up the value chain.
Table 2. Malaysia Criteria for Employment of Foreign Workers in Selected Sectors
MANUFACTURING SECTOR
1. Export-Oriented Companies
Eligibility Criteria
a. Minimum export value RM50 million
b. Eligibility ratio of local workers vis-à-vis foreign workers 1:3
2. Non-Export-Oriented Companies
Eligibility Criteria
a. Minimum paid-up capital RM100, 000
b. Sales value RM2 million
c. Eligibility ratio of local workers vis-à-vis foreign workers 1:1
3. Companies in the Electrical and Electronic Sectors
Eligibility Criteria
None
Eligibility ratio of local workers to foreign workers is 1:2, irrespective of whether the
company is designated export-orientedor non export-oriented
PLANTATION SECTOR
Eligibility Criteria: Owner of plantation or lessee
Type of cultivation or nursery: oil palm, rubber, cocoa, teak and other species of forest
Approval criteria depend on two factors:
a. land area
b. number of existing workers (local and foreign)
i) For every 8 hectares of oil palm: 1 foreign worker
ii) For every 4 hectares of rubber: 1 foreign worker
CONSTRUCTION SECTOR
a. For construction workers < 50
Employer needs to get approval from the Construction Labour Exchange Centre
b. For construction workers > 50
Employer needs to get approval from Ministry of Home Affairs
Source: Adapted from Shamsuddin Barden (2006).
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Figure 1. Malaysia: Foreign Workers by Sector, 19992008 (per cent)
Note: Agriculture is used in a generic sense to refer to commercialised agricultural
activities, excluding large-scale (mainly) oil palm cultivation
Source: Derived from Ministry of Home Affairs, Economic Planning Unit (2011).
Table 3. Malaysia Rules on Country of Origin of Foreign Labour in Designated Sectors, 2008*
Construction Philippines (male), Indonesia, Cambodia, Kazakhstan, Laos, Burma, Nepal,
Thailand, Turkmenistan, Uzbekistan, Vietnam, Bangladesh
Manufacturing Philippines (male), Indonesia (female), Cambodia, Kazakhstan, Laos,
Burma, Nepal, Thailand, Turkmenistan, Uzbekistan, Vietnam, Bangladesh
Plantation/
Agriculture
Philippines (male), Indonesia, India, Cambodia, Kazakhstan, Laos,
Myanmar, Nepal, Thailand, Turkmenistan, Uzbekistan, Vietnam, Bangladesh
Service
Restaurant All source countries for general worker posts (except India cooks only).
Restaurants in major towns in Peninsular Malaysia
Laundry All source countries except India
Cleaning/
Sanitation
All source countries except India
Caddy All source countries except India
Resort Islands All source countries except India
Welfare Homes All source countries except India
Cargo All source countries except India
High Tension
Cable
India only
Domestic
Workers
Sri Lanka, Indonesia, Thailand, Philippines, Cambodia, India,* Nepal,*
Vietnam,* Laos,* Bangladesh,* Pakistan*
Foreign Nurses Albania, India, Bangladesh, Philippines, Pakistan, Indonesia, Burma
Note: *Includes changes until 2011. The government has also announced that it will recruit
domestic workers from Kazakhstan and Uzbekistan to reduce dependence on Indonesia.
Source: Modied from Kanapathy (2006).
Managing Labour Migration in Malaysia 356
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Crisis and Change
The 199798 Asian nancial and economic crises had major repercussions for eco-
nomic growth. Indonesia, Malaysia and Thailand were confronted with the prospect of
slower economic growth, restructuring, a period of scal austerity and higher unem-
ployment levels. Economic growth in Malaysia, for example, fell from 7 per cent in
1997 to 3.5 per cent in 1998. While Indonesia and Thailand turned to the International
Monetary Fund (IMF) for rescue funds in return for economic reforms, Malaysia imple-
mented its own reforms without the IMFs assistance. Additionally, against the back-
ground of capital outows, business failures, rising local unemployment and worker
layoffs, Malaysia introduced tougher immigration measures, halted new labour hires for
most sectors, and resorted to getting rid of documented and undocumented workers
who were no longer needed in the country.
As a rst step, the Special Task Force on foreign labour recruitment was disbanded
in 1997 and its responsibilities were handed over to the Immigration Departments For-
eign WorkersDivision. The government then initiated scrutiny of security issues and
data collection methods to verify the legality and visa status of migrant workers. There
were then around 2 million migrant workers in the countrys labour force of 8 million.
It was estimated that only 1.2 million of them were registered/documented. Three other
tools were also utilised to limit migrant labour numbers. These included channelling
foreign workers to the expanding oil palm plantation sector; introducing a colour-coded
work permit system for the different sectors; and new legislation specifying that foreign
workers had to be laid off before local workers were dismissed. The government subse-
quently announced the repatriation of around 400,000 workers who were employed in
non-export sectors (Migration News, January 1998). This roundup program focused on
irregular migrants from Indonesia, Thailand, the Philippines, Bangladesh and Pakistan.
As reported in Migration News (April 1998), the StatesOperation Clean Sweeputi-
lised 500 police ofcers, 500 soldiers and 50 immigration ofcials to surround and
Figure 2. Malaysia: Foreign Workers by Country of Origin, 19992008 (per cent)
Source: Derived from Ministry of Home Affairs, Economic Planning Unit (2011).
357 Amarjit Kaur
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search squatter settlementsto round up those without ofcial papers. Concurrently,
Malaysia increased the number of detention camps in the country.
The government also targeted both employers of irregular workers and
undocumented migrants in the waragainst undocumented migrants. The Immigration
Act (amended earlier in 1997) was further amended in 2002 to remove ambiguities and
tighten regulations. The amended Immigration Act 2002 called for irregular migrants to
be ned up to RM10,000; a 5-year prison sentence; and six strokes of the cane.
Documented domestic workers who had been abused or had run away from their
employers were also considered irregular workers and held in detention camps. There
were stiffer penalties for employers who employed more than ve undocumented
workers and they were also liable to nes, imprisonment and physical punishment
(Sreenevasan, 2006).
In August 2002, Malaysia arranged for an estimated 600,000 undocumented migrants
of the 1.5 million foreign workers (Holt, 2002) to leave without penalty under the
amended 2002 Immigration Act. The Indonesian government then dispatched naval
vessels to Malaysian ports to repatriate the expelled Indonesian migrants. Malaysias
deportation program unfortunately caused a humanitarian crisis at Nunukan, a tiny
Indonesian island off Tawau in East Kalimantan. According to the Jakarta Post (3 Sep-
tember 2002), Nunukan had limited facilities and only one health centre for its 40,000
inhabitants. Around 22,000 expelled Indonesian workers from Java and Sulawesi were
stranded on the island and had to sleep rough. Food and water shortages and lack of
medicine exacerbated the situation and it is estimated that at least 64 workers and their
children died of hunger and disease (see also New York Times, 15 August 2002; Ford,
2006). During this period the Malaysian Prime Minister temporarily halted the
deportation of around 12,000 Filipinos at the request of the Philippines President
(Migration News, October 2002).
This episode foreshadowed important changes in Indonesian-Malaysian relations con-
cerning the recruitment of Indonesian labour in Malaysia. First, it led to greater advo-
cacy and action regarding the human rights of overseas Indonesian workers by
Indonesian and international non-governmental organisations (NGOs), acting on behalf
of Indonesian migrants. Second, in response to growing criticism by Indonesians and
others, the Indonesian government demanded better working conditions and pay for
documented migrants. The Indonesian government also insisted that authorised Indone-
sian labour-exporting companies handle the recruitment of Indonesian workers and the
earlier practice of recruitment through Malaysian recruitment companies be discontin-
ued. These negotiations resulted in a Memorandum of Understanding (MOU) in 2004
between Indonesia and Malaysia. The MOU required Malaysian employers to deal
directly with licensed Indonesian labour recruiting agencies. Other issues included
revised age eligibility requirements for migrant workers, the obligation of pre-departure
training, and improved wages. Migrant workers were also not allowed bring their fami-
lies (Tirtosudarmo, 2011).
The Indonesian parliament also passed new legislation in 2004 (the Overseas Place-
ment and Protection for Indonesian Workers Law), which established authorised Indo-
nesian recruitment agencies. The ban on private labour brokers and agents in Indonesia
was lifted and Malaysian rms/employers that wanted to employ Indonesian workers
were allowed to recruit them directly through the Indonesian agencies, or utilise the ser-
vices of local labour brokers. The latter then liaised with the manpower division in the
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Indonesian Embassy in Malaysia to recruit workers from Indonesian labour-exporting
companies. On the Malaysian side, the government also improved recruitment mecha-
nisms for Indonesian workers. This legislation also provided for the stationing of labour
attachés in Malaysia (and other destination countries) to represent the interests of Indo-
nesian workers (Caram Asia, 2011, p. 23). This 2004 legislation on Indonesian over-
seas labour employment was a signicant policy change in migration governance since
Indonesia was allowed to be involved (even if in a restricted way) in organising Indo-
nesian workersrecruitment processes and such workers had recourse to an Indonesian
ofcial in Malaysia. Additionally, Malaysia had to amend a key established recruitment
practice and consent to labour intermediaries in Indonesian labour recruitment.
As the economy improved, foreign workers were again welcomed into Malaysia.
Earlier, in 2001, the maximum time limit of the temporary work pass had been reduced
from 5 to 3 years but this was revised in 2002 and the maximum time limit was
extended to a 3 + 1 + 1 ruling, except for domestic services (Devadason and Chan,
2010, p. 5). After the fth year, foreign workers had to return home for a minimum
one-year period, before seeking reemployment. Interestingly, the government later
allowed workers in the plantation sector ve-year extensions. These developments also
ensured a continuing supply of cheap labour, permitting Malaysia to continue its depen-
dence on cheap migrant labour rather than moving up the value chain.
In 2006, the government adopted a pro-business and demand-driven policy on for-
eign labour recruitment. It established a One-Stop Centre for the Recruitment of For-
eign Workers. This Centre was assigned the task of approving and processing
applications to obtain foreign workers for Malaysian enterprises. Henceforth employers
who wanted to recruit temporary guest workers had to apply for approval from the
Ministry of Home Affairs and the One-Stop Centre. Employers had to satisfy a range
of conditions to get approval from the Centre. An Electronic Labour Exchange (ELX)
system was also established at the Ministry of Human Resources and entrusted with
labour market testing. Henceforth it became mandatory for employers in the main eco-
nomic sectors to advertise vacancies in the ELX before they could apply to bring in
foreign workers. According to Kanapathy (2008, p. 16), the Centre was intended to sat-
isfy employersdemands and promote the interests of capital.
The management of domestic workers is a separate labour issue in Malaysia and has
to be explored in the context of the changing division of labour, dual-income families,
migrant womens work in private households, and the governments exclusion of the
private spherefrom outside scrutiny. Generally, the demand for paid domestic work
has corresponded with the increase in Malaysian womens employment in well-paid
occupations. For these women, hiring a domestic worker enables them to cope with
and organise their work, home and child rearing responsibilities and also provide for
elder care in their homes. Domestic workers allow both exibility and affordability
(they are paid comparatively lower wages), and since they are employed in private
homes are considered informal workers by the government. Moreover, there are no
exact job specications, or educational or skill requirements for the job. Originally,
there were no age requirements but this omission was rectied in 2005.
Importantly, domestic worker employment was also linked to a sponsorship-immi-
grationpolicy arrangement. Previously, a Malaysian employer who wanted to hire a
domestic worker was required to rst approach a certied Malaysian domestic worker
recruitment agency. The agency then initiated a search order with a counterpart agency
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in the sending country and offered a selection of applicants to the client. After selec-
tion, the prospective employer had to pay for all training, visa and travel costs up front.
Employers were then allowed to recoup their costs through salary deductions. Further-
more, employers were allowed to retain their domestic workerspassports to prevent
ight by domestic workers and perform the surveillance role, limiting their freedom
and mobility (Interview with B. Singh, Kuala Lumpur, 2006; Kaur, 2007). Conse-
quently, domestic workers had to contend with a range of restrictions, including having
to undergo regular pregnancy checks, and were excluded from the provisions of the
Employment Act 1955.
These workersexclusion from the Malaysia-Indonesia 2004 MOU was strongly crit-
icised by Human Rights Watch in its report, Help Wanted: Abuses against Female
Migrant Domestic Workers in Indonesia and Malaysia (2004), and exposed the Indone-
sian and Malaysian governmentslack of concern for this category of migrants. The
inherent unequal gender hierarchies in both countries meant that domestic workers had
no avenue for redress, and were susceptible to abuse by employers. Following a series
of well-publicised abuse cases, Malaysia and Indonesia signed an MOU in May 2006
that specied a standard contract for Indonesian domestic workers in Malaysia.
Although the pay scale was revised upwards, the withholding of salary continued,
employers retained the domestic workerspassports, the issue of a minimum wage was
not resolved, and employers were unwilling to grant a weekly day off to domestic
workers (Kaur, 2007).
In 2009, there were fresh cases of abuse and deaths at the hands of employers, and
the Indonesian government imposed a moratorium on the recruitment of domestic
workers for work in Malaysia. After lengthy negotiations on working conditions, and
under the scrutiny of international and Indonesian NGOs, the Indonesian government
lifted the ban in late 2011. A new MOU on domestic worker employment was signed
between the two countries, and domestic workers were informallyincluded under
Malaysias Employment Act 1955. The new MOU contains clauses such as the stipula-
tion of a day off; allowing domestic workers to retain their passports; a revised pay
scale; and the condition that employers have to bank the domestic workerssalaries in
their bank accounts. Signicantly, since domestic workers cannot join or form trade
unions, they are allowed to le complaints of mistreatment with the Labour Ofce and
seek assistance from enforcement agencies and NGOs. Thus, they may seek redress
under Malaysias Anti-Trafcking in Persons and Anti-Smuggling of Migrants Act
2007, if forced to carry out tasks not stipulated in their contracts. This new arrangement
continues to enhance the role of labour brokers and absolves the Malaysian government
from incurring additional costs in the regulation of domestic workers.
Generally, the governments policy of maintaining the countrys export competitive-
ness based on cheap foreign labour has resulted in Malaysia being caught in a middle-
income trap. Malaysia continues to rely on foreign investors to create jobs for Malays
and migrants(Migration News, January 2012), and is competing with lower-wage
countries, especially in the manufacturing sector, but Malaysias share of Southeast
Asian FDI ows has been dropping. The country, which received 35 per cent of South-
east Asias FDI ows in 1980, attracted only 13 per cent in 2008 (Migration News,
January 2010). In order to encourage further private sector initiatives and increased
investment, the government endorsed a newmodel of labour brokerage or labour out-
sourcing arrangements for rms employing fewer than 50 workers from 2005. This
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labour model has coincided with the push by multinationals such as Nike to utilise
boutiquecontract factories in Malaysia for the manufacture of clothes and sports
shoes that carry their brand names. Specialised agro-horticultural farms utilising the
same labour model have also mushroomed in the country.
Under previous sub-contracting arrangements, rms had been allowed to supply
workers to plantations and other enterprises and also managed matters such as accom-
modation, transportation, insurance and the like (see Devi, 1986). The government had
approved the arrangement primarily to allow employers to shift some of their responsi-
bilities concerning workers to a third party namely the labour sub-contractor, who
often organised seasonal labour gangs but the employer nevertheless retained overall
responsibility for the workers. Under the new arrangements, the outsourcing agents
have become contractorsof labour, which was illegal under the provisions of the
Employment Act 1955 that provided for a direct employer-worker employment relation-
ship only (see Charles Hector blogspot, 03/2012). The government therefore inserted a
new clause on contractors of labourinto the Employment Law and succeeded in hav-
ing it accepted (after an initial withdrawal of the bill in 2010) in 2011, despite strong
opposition from trade unionists and human rights defenders.
The Ministry of Home Affairs then licensed about 270 outsourcing/labour hire rms
in 2006 to recruit workers from countries other than Indonesia (particularly from Ban-
gladesh) for the small and medium enterprises. These companies are required to be
wholly Malaysian-owned and workers are responsible for all recruitment and transpor-
tation costs and the recruiters charges. Essentially, workers hired under this system
have to payfor the privilege of recruitment. The Malaysian government has argued
that the outsourcing system is superior to recruitment via agencies since the intermedi-
aries, who charged exorbitantfees, no longer have a role in the recruitment process.
The outsourcing system has effectively introduced a Malaysian variant of labour bro-
kerage for both local and foreign workers. Workers are brought into the country on the
basis of calling visas issued on behalf of outsourcing companies (by means of arrange-
ments with labour brokers in the sending countries). Although legally obliged to pro-
vide specic jobs for the workers they bring in, the labour hire rms also operate as
speculative labour contractors, moving workers around to get the best deal for them-
selves. The labour hire rm also functions as the de facto employer. Workers hired by
labour hire companies are also not included in the quotas assigned to the different sec-
tors. It has been alleged that the outsourcing system has transformed the migrant work-
ers into bonded labour (Fernandez, 2008; Ramachelvam, 2008), and horror stories of
their exploitation have been reported in the media (Tenaganita, 2007; Interview with
Irene Fernandez, July 2011).
Despite the governments efforts to control the numbers of irregular migrants, the
outsourcing system has resulted in an accumulationof unauthorised migrant workers.
The MTUC has reported that the activities of these labour hire rms have worsened
the problem of human trafckingin Malaysia since they have brought in as many as
500 workers eachwho were then soldor outsourced(humantrafcking.org, News
and Updates, 17 May 2007). Undoubtedly the government-sponsored outsourcing
recruitment policy has resulted both in the exploitation of workers and in making them
become irregular. It is also generally known that workersirregularity occurs in tan-
dem with exible labour markets and where employers who are not able to remain in
business without the low-cost exibility resort to sacking workers en masse. Many of
361 Amarjit Kaur
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the Bangladeshi workers brought into Malaysia in possession of calling visas issued on
behalf of an outsourcing company had not received work permits and hence worked
illegally.
The migrant labour management policy sequence of roundups/amnesty/repatriation/
regularisation programs for irregular migrants in subsequent years is summarised below
to demonstrate the continuing weaknesses in Malaysias regulatory frameworks and the
increasing reliance on technology and other methods. A 2005 operationresulted in
massive shortages in the plantation and construction sectors and the regularisation of
irregular migrants became a top priority. The government then approved an amendment
to its previous policy and allowed foreign workers whose contracts had expired to
change employers within the same economic sector. Concurrently, new Mobile Immi-
gration Enforcement Teams were utilised to authenticate the ngerprints of foreigners
against government databases (Migration News, October 2008;New Straits Times, 4
November 2008). Malaysias biometric capabilities were also enhanced, and the govern-
ment stepped up patrols, constructed more detention centres, and organised regular
roundups of irregular migrants. In 2008, the Home Ministry also supplied colour-coded
identity cards (I-Kad) to migrant workers, based on their employment sector, to
improve the monitoring process (The Star, 17 January 2008).
The government then turned to an ally from the past for assistance with its foreign
labour management cycle. It enlisted the services of a non-state actor, the Ikatan Rela-
wan Rakyat Malaysia (RELA) or Peoples Voluntary Corps, in its crusade against irreg-
ular migrants (including refugees and asylum seekers). RELA had been formed in 1972
to assist, maintain and safeguard peace and security in the country (Funston, 1980,
p. 270). The government has armed RELA personnel whose revitalised responsibilities
include orders to stop, search and demand documents, arrest without a warrant, and
enter houses or premises believed to house irregular migrants. The volunteers were
also given bounties for captured irregular migrants (Suaram, 2006, pp. 12021). RELA
recruits were also immune from prosecution in relation to their conduct(FIDH-Sua-
ram, 2008, p. 12).
The governments foreign labour management policy-cum-regularisation of irregular
migrants has also undergone some modication. The 201112 variant was the States
largest comprehensive policy in the on-going cycle. It has been branded the 6Poper-
ation and comprised six essential components: pendaftaran [registration], pemutihan
[legalisation], pengusiran [deportation], pemantauan [monitoring], penguatkuasaan
[enforcement] and pengampunan [amnesty]. The operationwas also intended to pro-
vide accurate gures on the number of migrant workers in the country (estimated at
around two million) and register/regularise undocumented departing workers (also
believed to number two million). Furthermore, the operation was utilised to determine
whether migrant workers were employed only in the permitted sectors: construction,
manufacturing, plantation and farming (agriculture) and services. Following registration
procedures, workersparticulars were entered into the governments biometric system
to enable better control over foreign labour(Economic Times, 1 December 2011).
The apprehended unauthorised migrants were required to formally register them-
selves, a process that involved payment of both a ne and special visa fees, and were
given a biometric ID. They also had the option of leaving Malaysia or obtaining work
permits to stay on. According to the Home Ministry secretary-general, by May 2012
the government had collected nearly RM1.5 billion in levies and the program had
Managing Labour Migration in Malaysia 362
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delivered 1,136,598 new regularisedforeign workers (The Star, 15 May 2012). In
implementing this strategy of offering amnesty(that is, payment of a ne and visa
fees rather than incarceration) and an opportunity to become regularised, Malaysia
follows on the heels of the United States, the European Union and Thailand (Levinson,
2005; Martin et al., 2006, Chapter 6; Bangkok Post, 10 December 2012). Furthermore,
the policy has created a larger legal labour pool that has consequences for both domes-
tic and international investment.
Malaysias evolving regulatory frameworks for the temporary guest worker program
and the legalisation of irregular migrants as a policy instrument have corresponded with
two distinct periods in policy-making on foreign labour. The rst was a largely deregu-
lated period, consistent with the growth strategy of maintaining the countrys competi-
tiveness based on cheap labour. Subsequently, the implementation of new foreign
labour management frameworks marked the start of a centralisation period that com-
prised a cycle of roundups/registration/amnesty/repatriation, followed by regularisation
of irregular workers. Overall, Malaysia has not transitioned to a viable policy where it
is in a position to successfully manage irregular immigration and simultaneously
employ effective migration policies for labour force growth.
The governments policy of maintaining the countrys export competitiveness based
on cheap foreign labour has resulted in Malaysia being caught in the middle-income
trap. The challenge is to plan for long-term dependence on foreign labour without
continuing the cycle of roundups, deportations, amnesties and regularisation. In 2011,
the government introduced a minimum wage in the country for all workers (apart from
domestic workers and gardeners). This policy change may lead to the availability of a
greater pool of local workers who had previously been left out of the labour market
due to low wages and dismal working conditions. It is also unrealistic to depend on a
never-endingsupply of cheap foreign labour. Accordingly, Malaysia will need to
improve the quality of its labour force and review its bumiputera policy, i.e. Malay
preferences in employment and universities (cf. Hill, 2012, Chapter 1; Hill, Tham and
Ragayah (2012, various chapters) to address the root causes of loss of talent and labour
shortages in the country.
Acknowledgments
The research on which this article is based was assisted by the generous support of the
Australian Research Council [DP0666015Kaur_2006].
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List of tables List of figures List of contributors Preface 1. Malaysian economic development: looking backward and forward - Hal Hill 2. Political challenges in economic upgrading: Malaysia compared with South Korea and Taiwan - Joan M. Nelson 3. The politics and policies of corporate development: race, rents and redistribution in Malaysia - Edmund Terence Gomez 4. The Malaysian economy during three crises - Prema-chandra Athukorala 5. Monetary policy and financial sector development - Michael Meow-Chung Yap and Kwek Kian Teng 6. Public sector resource management - Suresh Narayanan 7. Microeconomic reform in Malaysia - Cassey Lee 8. Services liberalization: the need for complementary policies - Tham Siew Yean and Loke Wai Heng 9. Is Malaysia's electronics industry moving up the value chain? - Rajah Rasiah 10. The crisis in education - Lee Kiong Hock and Shyamala Nagaraj 11. Poverty eradication and income distribution - Ragayah Haji Mat Zin 12. Demographic and labour force dynamics - Gavin Jones 13. Shifting the policy goal from environment to sustainable development - A.A. Hezri and S.R. Dovers References Index
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This book examines the various economic, political and developmental policy challenges that Malaysia faces in her shift from a middle income to high-income economy. This issue is of great interest to academics, policy makers and development practitioners in the developing world, particularly in middle-income economies where there is a widespread concern about the challenges of managing such a transition.