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July 1998, Volume 5, Number 7

Malaysia: Shortage and Surplus

Some 35,000 workers were laid off in Malaysia in the first five months of 1998--13 percent were foreign workers. However, in four months of 1997, 325 Malaysian employers applied for 77,431 new foreign workers, mostly for jobs in manufacturing and on plantations. The government approved the importation of 21,763 foreign workers for manufacturing and 18,088 for plantations.

Plantation workers receive about 60 percent of the average manufacturing wage, a ratio that has remained stable over the past 25 years. One state-owned firm in southern Johor is trying to recruit Malaysians to work on oil palm, rubber, tea and banana plantations by offering free housing and child-care. More than 2,400 workers have accepted the offer, which is open to Malaysians under 45 years. The export price of palm oil increased to US$ 542 a ton during the first quarter of 1998. The government is hoping that the country can increase natural resource exports to boost the economy.

At the same time, the Malaysian government is adhering to the August 15, 1998 deadline for the repatriation of all foreign workers employed in construction and manufacturing. Employers are asking for exceptions: the Johor Master Builders Association wants to exempt from repatriation foreign construction workers with at least six years' work experience.

Illegal foreign workers in Malaysia are attempting to leave the country without going through formal channels. They attempt to leave surreptitiously to avoid being sent to detention camps, where their savings are often confiscated to pay taxes and fines.

UNHCR in June said that 22 Indonesian Aceh inside the US embassy and the UNHCR compound who are resisting repatriation should be permitted to remain in Malaysia or be resettled in a third country because they face political persecution in Indonesia. Indonesia said that it will not object to the decision of the UNHCR to arrange political asylum for the 22 Acehnese. The asylum seekers say that they would face torture and perhaps death by the Indonesian military if they were deported.

Malaysian authorities reported that fewer Indonesians were attempting to illegally enter Malaysia because they had too little money to pay smuggling fees, but that more illegal Indonesians were attempting to leave the country illegally to return home with their savings.

In Malaysia, the number of professional engineers, architects, scientists, system analysts and technicians who are Bumiputeras (native Malaysians) increased from 671 of 3,483 in 1980 to 5,520 of 14,869 in 1991. The number of Indian professionals increased from 391 in 1980 to 1,603 in 1991, and the number of such Chinese increased from 2,211 to 7,622.

In Malaysia, two blocks of apartments which were formerly used by the Royal Malaysian navy have been converted into rental units for single professional and technical foreign workers. The developers plan to offer the housing to single foreign professionals, who often have generous housing allowances, but who until now have usually stayed in dormitories with unskilled workers at construction sites. The rent is $1,000 a month and a three-room apartment can be shared by four workers. About 40 of the 200 apartments were rented immediately, most by Filipino engineers.

Remittances. Foreign workers in Malaysia remitted about US$1.3 billion in 1997, equivalent to about two percent of Malaysia's GDP. About 65 percent of remittances went to Indonesia, 22 percent to Bangladesh and six percent to the Philippines. Malaysian workers abroad remitted US$ 127 million to Malaysia in 1997.

Brunei. Some of the biggest construction and development companies are pulling out of Brunei, an oil rich sultanate. Unofficial estimates are that nearly 75 percent of the foreign workers left the country in 1998, as the government reduced spending.

"Let foreign workers with experience stay," New Straits Times, June 17, 1998. "RI does not object to UNHCR asylum plan for Acehnese," Jakarta Post, June 11, 1998. "Foreign workers in Malaysia remit US$1.3 BLN abroad in '97," Asia Pulse, June 4, 1998. Rashid Yusof, "Two sectors seek 11,647 more foreign workers," New Straits Times, June 4, 1998. "Malaysia lures locals to plantations to replace foreigners," Deutsche Presse-Agentur, June 3, 1998.