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Tensions between Malaysia and neighboring Indonesia and the Philippines are still smoldering as Kuala Lumpur continues to deport illegal foreign workers. On Aug. 28 Kuala Lumpur reportedly summoned the Indonesian ambassador over earlier anti-Malaysia protests in Jakarta, while in Manila new anti-Malaysia demonstrations broke out. Political factions in all three governments are fanning the flames for their own domestic gains, even though all three nations stand to lose from the current row.

Analysis

The Malaysian government summoned the Indonesian ambassador Aug. 28 to express its concern for the safety of Malaysian citizens in Indonesia, according to the daily Malaysiakini. Earlier in the week, Indonesian demonstrators, protesting Malaysia’s new and harsher punishments for illegal laborers, burned a Malaysian flag and tried to push through the gates of the Malaysian Embassy in Jakarta. In Manila, smaller protests broke out on Aug. 28, also concerning Malaysia’s migrant labor rules.

These incidents are the latest in a diplomatic row between Malaysia and neighboring Indonesia and the Philippines, triggered by the Aug. 1 amnesty deadline for illegal-immigrant laborers to leave Malaysia before facing stricter punishments, including mandatory prison terms and caning. Politicians and interest groups in each country are exploiting the issue for their own gain, only adding fuel to the fire. Given the current social and economic conditions, each nation stands to lose from the current tensions.

On July 31 amnesty ran out for the estimated 600,000 illegal workers in Malaysia to leave or accept new, harsher punishments. Kuala Lumpur estimates that nearly half of the illegal workers left during the months leading up to the deadline, but tens of thousands were rounded up for deportation or fled at the last minute, straining the social, economic and medical capabilities of their home countries. Malaysia viewed the illegal immigrants as a security threat -- a pool of potential criminals and a hiding place for transnational Islamic militants.

But Kuala Lumpur also was concerned with the sheer number of foreigners, both legal and illegal, working in the country. During an early August visit to Indonesia’s resort island of Bali, Malaysian Prime Minister Mahathir Mohamad noted that there were an estimated 2 million foreign workers in Malaysia, nearly 10 percent of the total population of 22 million.

Malaysia relies heavily on foreign labor, particularly in the construction and plantation sectors and in labor-intensive export manufacturing. For Mahathir, this dependency represents a serious danger to Malaysia’s economic growth and stability. Given that foreign workers are paid less than Malaysians, and illegal workers even less than that, domestic businesses often seek foreign workers as a means of cutting costs. But this takes potential jobs away from ethnic Malays.

Malaysian businesses argue that ethnic Malays, who benefit from the government’s affirmative action program for the majority ethnic group, are unwilling to work lower-paying jobs. But Mahathir has been pushing Malays to quit relying on foreigners to do all the heavy-duty work and on their government subsidies to make ends meet or risk losing out in the long run to ethnic Chinese Malaysians, who are much more productive. Mahathir has repeatedly criticized ethnic Malays for growing lazy, and kicking out foreign workers is in part his way of forcing Malays to start working for themselves.

But this has proven less than effective. In the Malaysian construction sector, for example, 70 percent of the total 500,000 foreign workers are illegal immigrants, primarily Indonesians, according to the Master Builders Association of Malaysia. With the recent mass exodus of illegal laborers, the construction sector started to slow noticeably, and construction firms lobbied the government to ease the regulations. Builders estimated their direct losses from the delay in projects caused by the shortage of illegal Indonesian labor would be $79 million in the first two months, according to Malaysia’s New Straits Times Press.

By mid August, builders had convinced Kuala Lumpur to return Indonesians to the list of approved foreign workers, which also includes those from Nepal, Thailand, Uzbekistan and Vietnam. The government then announced it was looking for as many as 500,000 new legal foreign workers, a number that would nearly replace the illegal foreign workers, though Mahathir warned businesses that they could be blacklisted if they didn’t first try to recruit domestic labor. With this call, it is clear Mahathir has failed in his attempts to reduce the country’s dependence on foreign workers and spur ethnic Malays to be more productive.

It is still unclear that expelling illegal foreign laborers will significantly improve Malaysia’s security either -- and to top it off, politicians and other interest groups in both Indonesia and the Philippines have leapt on the migrant labor issue, stirring resentment against Malaysia. But these two countries are suffering as well from the deportation of their citizens.

Both nations have taken a double economic hit from Malaysia’s actions: They have lost the remittances the workers once sent home, and now they must pay to house, feed and care for tens of thousands of returnees, many of whom left in the first place because they had few options for making a living at home. The situation was dire enough for many of them to brave chances of poor treatment and reports of near indentured servitude among illegal laborers in Malaysia.

Indonesia’s official unemployment figures for the first half of 2002 stood at 8.4 million jobless, while unofficial estimates put the figure of those unemployed or under-employed closer to between 40 million and 45 million. And with domestic political instability and security concerns, foreign investment is drying up and layoffs are on the rise. Already in the first half of the year, the Ministry of Manpower and Transmigration puts the number of laid-off Indonesian workers at 62,166. The total number of layoffs in 1998 -- the peak of the Asian economic crisis and of social instability in Indonesia -- was 131,000, just more than twice the figures for the first half of 2002.

Rather than trying to create new jobs at home, Jakarta instead is seeking ways of sending the deported Indonesians back to Malaysia, albeit legally this time. But its efforts to renegotiate with Kuala Lumpur are being hampered by comments from local politicians, particularly Amien Rais, the National Assembly speaker.

In comments reported in Indonesia’s Kompas Aug. 27, Rais reportedly said Malaysia’s treatment of illegal workers did not surprise him, because, "after all, Mahathir had persecuted even his own deputy, Anwar Ibrahim, let alone Indonesian workers." The reference to Mahathir’s former handpicked successor, who was later tried on trumped up sodomy charges after failing to toe Mahathir’s line on economic policy, did little to improve the situation between Indonesia and Malaysia.

Amid this political tension, each nation is feeling the economic impacts of the disputes. Neither Indonesia nor the Philippines was prepared for the influx of former illegal workers, as Indonesian officials admitted, despite months of warnings from Malaysia. And as Malaysia’s ambassador to the Philippines bluntly said when questioned about the deaths of three children of deported illegal workers -- deaths that appeared to stem from poor health care under Malaysian supervision -- "It doesn’t look good to see children dying and their mothers grieving over the loss of their children, but the fact remains that this is a situation that could have been easily avoided."

But for all three nations, even when they lower their diplomatic hackles, the economic and social effects of Malaysia’s latest crackdown on illegal foreign workers will linger.Results Page:

MALAYSIA CRACKS DOWN ON MIGRANTS

Date Added: Wednesday, July 31st, 2002
Contributed by: RCN Administrator