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Managing Labor Migration in the Twenty-First Century
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Occupational Distribution of Employed Workers, March 2002
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June 1995 Volume 2 Number 6

Malaysian Reliance on /a>Foreign Workers


Malaysia's booming economy has drawn more than a million migrants from Indonesia, the Philippines and Bangladesh, among others, in search of jobs.

By one estimate, if economic and job growth continue at current rates--the government projects economic growth of seven percent per year to 2020-- Malaysia will need 23 million workers in 2020, but will have only 13 million workers. Malaysia currently has a per capita GDP of $3200.

Despite promises by Malaysia's Prime Minister to permit industrial wages to rise, and to reduce the country's reliance on foreign workers, the government is considering extending the work permits for foreign workers. The Malaysian Department of Human Resources proposed a 3+2 formula which would allow work permits for foreign workers to be extended for two years upon the request of an employer.

Foreign workers are currently given two-year work permits, with the employer having the option of extending the permit for one year. Employers have ask the Malaysian government to permit another two year extension so that they can keep trained workers.

Malaysia is considering imposing stiffer fines on recruitment agencies who employ foreign workers in illegal activities. Some of the proposed penalties include higher fines, jail and caning. A bill with the proposed changes is expected to be submitted by the Attorney General's office before the end of 1995.

Malaysian authorities arrested over 3,000 illegal Indonesian migrants in just two months, mostly in the provinces of Johor, Selangor, Melaka and Negri Sembilan. Many of the illegal immigrants are arriving by boat. Those caught are held temporarily in one of five immigration detention camps.

In 1992, the government licensed about 300,000 illegals from these camps for temporary employment in households, plantations and the construction industry to ease the acute labor shortage in these areas.

Malaysia is considered an economic success story, but there continue to be concerns about the country's treatment of unions. The Malaysian electronics industry employs 140,000 workers, including 120,000 women, but labor law bans unions from this "pioneer" industry in which the government hopes to lure foreign investment.

Most electronics workers are young women who start on the assembly line at age 17 to 25, and stay for less than 10 years, earning $140 to $250 per month. A Spring 1993 survey reported that electronics workers were 75 percent female, 63 percent Malay, and 57 percent skilled.

Skilled workers were paid an average $1.15 per hour or $221 per month, including benefits. Unskilled workers were paid an average $133 monthly.

The Australian government reports that fewer Malaysians are settling in Australia. Between 1984 to 1994 over 40,000 Malaysian, 16 percent of all settlers from Southeast Asia, settled in Australia. Malaysia was the third largest source of settlers after Vietnam and the Philippines.


"Extension of work permits will benefit all involved, The Straits Times, May 29, 1995. "Agencies 'should not be held liable for maids' actions,'" The Straits Times (Singapore), March 4, 1995. "3,300 illegal aliens held in 2 months"," The Straits Times, May 13, 1995. "Illegal immigrants arrested in Malaysia," Xinhua News Agency, May 11, 1995.
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