29 January, 2007

Why Malaysia needs migrant workers

THE movement of people from one place to another is not a new phenomenon. For centuries people have been on the move for one reason or another. Many were displaced by war as well as man-made and natural calamities, others driven out by poverty in their home country while some migrate in search of greener pastures. Thus, there exist both pull and push factors behind the migration of labour.

In the last forty years, a substantial section of the world population has been involved in international migration. It was either for better economic fortunes, escaping natural and man made disasters or for socio-political reasons. As a result, about 280 million people are said to have lived outside the country of their births in 2005.

Today in Asia there are about 20 million people who work in neighbouring countries. During the 1970s, many Asian workers particularly from the Indian subcontinent began seeking employment particularly in Middle Eastern countries and the United States, Canada and Australia. Several countries in the region like Saudi Arabia, Kuwait and UAE enjoyed buoyant economies due to escalating oil prices in 1973. This, in turn, attracted a large number of foreign labourers to carry out their massive infrastructural investments. But since the '90s, many from labour abundant South Asian and Southeast Asian countries preferred to work in the fast-growing Southeast Asian countries.

Demand for both skilled and unskilled workers has grown from rapidly growing nations of the Pacific Rim such as Japan, South Korea, Singapore, Hong Kong, Taiwan and Malaysia.

Multi-ethnic population in Malaysia demonstrated the long history of migration. About 40 per cent of its 26 million people are of migrant stock.

Due to its geographical location at the crossroads of Southeast Asia, Malaysia had for centuries been open to traders and travellers from the East and the West. But it was only during the British colonial administration in the late nineteenth and early twentieth centuries that the inflow of foreign labourers especially from the Indian subcontinent, China and Indonesia contributed to the formation of a multi-ethnic, mutli-religious, multi-cultural, and multi-lingual plural society in Malaysia.

The descendants of these migrant workers, especially from China and India, are classified officially as non-Bumiputra as opposed to Bumiputra (Malays and other indigenous people). Those from Indonesia have been assimilated with the Malay groups and are categorised as Bumiputra.

Before Independence in 1957 the British colonial administration, having confronted labour shortage resorted to the importation of cheap labour from India and China to work in tin mines, rubber plantation and for the overall development of the infrastructure. In fact, these migrant workers provided cheap as well as adequate supply of workers when local workers either found not suitable or interested in working under the same harsh conditions faced by the migrant labours.

The number of people involved was in millions and the inflow was abrupt and the migrants were from different ethnic and socio-cultural backgrounds. These factors led to the formation of an alien community. Although the primary objective of the migrant labours was to make some fortune and return home after sometime, a combination of factors operating within British Malaya and in the countries of origin resulted in many migrant workers taking the decision of not returning to their respective countries of origin and instead settling down in Malaya permanently.

However, many migrants returned to their homeland during the recession years in the thirties but the number of those who remained behind was still large. The majority of those who chose to stay opted for Malaysian citizenship after independence in 1957.

After Independence, this free migration was curbed by various policies and the 1963 Malaysian immigration policy made it very difficult for non-Malaysian born persons to gain permanent residence or citizenship while working in Malaysia. Therefore, the major changes in the demographic balance between ethnic groups had taken place more due to changes in fertility and mortality rates and less in net migration from overseas.

The economic development after independence is characterised by a widening economic gap between rural and urban sectors as well as between Bumiputra and non-Bumiputra communities.

Bumiputra groups after independence were found mostly in the countryside, working as peasant farmers while the migrant groups (non-Bumiputra), in particular the Chinese, were mainly involved in commerce and trade in the urban sectors. The Indians, on the other hand, were found mostly in the plantation sector working as labourers. The extreme economic disparities consequent from liberal economic strategy based on growth without redistribution together with political and ideological differences contributed to the inter-ethnic violence of May 1969, which had eventually led to the formation of the New Economic Policy (NEP).

This NEP was adopted to correct the economic imbalance and to remove occupational segregation among the major ethnic groups in Malaysia.

As a result of NEP, Malays who confined themselves to the rural areas began to migrate to the urban areas as employment opportunities were expanded largely because of the structural transformation of the Malaysian economy that created new jobs in the manufacturing and services sectors.

This migration to the industrial urban areas also affected the position of the rural population including Indian estate workers and the Malay small and marginal farmers. This has, in fact created an acute labour shortage in the rural areas in general and in the plantation sector in particular. This is how the dynamics within the country created a vacuum thereby setting the stage for pull factors to rekindle the labour inflows both legally and illegally.

The plantation sector was the first to feel the heat as the labour force began to deplete. Many educated youths opted to work in new factories rather than toil in plantations. Deplorable living conditions and low wages discouraged them to stay on. On the other hand, the new labour intensive companies provided attractive salaries and fringe benefits.

The construction industry also faces a similar situation. Hiring cheap foreign workers was the solution as it was difficult to attract local workers at prevailing wages. Later on, there was a pressing labour problem in the manufacturing sectors. Unskilled workers were in demand and to ease the tight market condition, the companies were allowed to recruit migrant workers based on specific needs.

There is a great demand for skilled workers in the electronic industry including technicians, engineers and production workers.

At the beginning, the labour shortage in the plantation sector has attracted mainly Indonesian workers and a small number of workers from the Philippines and Thailand. Later on, the rapid economic growth and the huge influx of foreign investment with emphasis on export oriented industrialisation strategy created a vacuum in the economy in terms of overall labour shortage.

More jobs were created in the construction, manufacturing and the services sectors. Therefore, without the importation of foreign workers the country's rapid development, construction and infrastructural programme could not be sustained.

Malaysia has undergone a major structural transformation from an agro-based economy to an industrialised one .This is consistent with the objective of achieving a developed country status by the year 2020. Primary commodities are being replaced by manufacturing industries by increasing its share in the total merchandise export. Because of this structural transformation and rapid economic growth, all sectors of the economy are in dire need of foreign labours since the local work force can not meet the growing need for labour.

Several factors such as limited skilled labours, lack of institutions to train workers, slow growth of skills to meet technology change and attitudes of the locals who shun menial jobs are likely to contribute to the current labour shortage in Malaysia. Government report and statistics demonstrate that there is a serious labour shortage in various sectors including manufacturing, plantation and construction. As such, a stable pool of workers both skilled and unskilled is needed to meet the on-going need of the economy.

- Zahid Zamir, financial express.

(The writer teaches at York College, City University of New York and a Research
fellow at IERF)



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