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August 1995, Volume 2, Number 8

Malaysia Loses Foreign Workers Remittances

The Malaysian government says it is losing about US $960 million dollars a year in foreign exchange because of remittances by foreign workers. The government estimates that each of the nearly one million foreign workers sends home about $80 US per month. [In Lebanon, 700,000 foreign workers, mostly Syrians, earn an estimated 20 percent of that nation's income.]

The Malaysian government warned that the country's reliance on foreign labor in only temporary, and the deputy home minister claimed that the presence of over one million foreign workers is a serious threat to security.

On July 15 the government extended for another two years the three-year work permits of foreign workers in construction, manufacturing, and hotels and restaurants. The decision to extend the passes was criticized by some unions, but praised by the construction industry.

The Malaysian Trades Union Congress cited examples of abuse of foreign workers and demanded that the government prevent further mistreatment.

The government will continue to allow gas stations to have two foreign workers for every Malaysian employed, although the industry had requested more. Five-year work passes for plantation workers will continue to be issued. The government stopped issuing work passes for foreign caddies at golf courses, but employers can continue to use foreign caddies until their current work permits expires.

The Malaysian Home Ministry warned foreign workers that they face a maximum fine of M$300 (US $ 123) or court action if they illegally change jobs. Many foreign workers have work permits restricting them to work as maids, and they have been found to be working illegally in restaurants, grocery stores, offices and in entertainment. Employers face of maximum fine of M$10,000 (US $4,000) or five years' imprisonment or both upon conviction.

The Bangladeshi government is concerned about the large number of illegal Bangladeshi workers in Malaysia, and plans to try to curb illegal labor exports. Bangladesh's labor exports to Malaysia slowed down in recent months as the Malaysian government discussed new policies to curb the influx of illegal foreign workers.

As of June, 1995, a total of 161,067 Bangladeshis were employed in Malaysia with valid documents, while 60,000 to 70,000 Bangladeshi labors are believed to be working illegally. Of these, about 26,000 are to be legalized. About 3,200 Bangladeshi illegal workers are being held in Malaysian detention camps.


"Dhaka Concerned Over Illegal Labor exports to Malaysia," Xinhua News Agency, July 24, 1995. "1.2 million foreign workers in Malaysia 'a threat to security,'" Straits Times (Singapore), July 21, 1995. "Builders welcome and unions reject work-pass extension," Straits Times (Singapore), July 17, 1995. "Malaysia losing a billion dollars a year from remittances, by foreign workers," Agence France Presse, July 17, 1995. "M$2.4b remittances by foreign workers inevitable: economists," Business times, July 19, 1995. Kieran Cooke, Manuela Saragosa and Ted Bardacke, "Boat People turn backs on home," Financial Times, July 3, 1995. "Malaysia losing a billion dollars a year from remittances by foreign workers," Agence France Presse, July 17, 1995. "Malaysia willing to accept Pakistani workers," Xinhua News Agency, July 1, 1995.