REGIONAL LABOR CIRCULATION: INDONESIAN WORKERS IN MALAYSIA | Hadi | Populasi 12341 24364 1 PB

REGIONAL LABOR CIRCULATION:

INDONESIAN

WORKERS

IN

MALAYSIA

Abdul SamadHadi*

Intisari

Jumlah

pekerjamigrandiMalaysiadariberbagainegarasarnpaiawaltahun 1998diperkirakanmencapai sekitar 1,2 juta, duapertiganyaberasal dari Indonesia.PekerjamigrandariIndonesiayangmasukkenegaramilebihbattyak yang menggunakancaratidakresmi/ilegal,dan menimbulkanbanyakmasalah

diMalaysia.Denganadanya pekerja migransirkulerdariIndonesiakeMalaysia

tersebui dirasamenguntungkankeduanegara.DiMalaysia,dengan masuknya pekerja inimasalahkekurangantenagakerjadapatditanggulangi,terutama sektorpekerjaan yang kurangdimmati oleh pekerjadarinegaraitu.Pada sisi lam,pekerjamigransirkuler dariIndonesiamerasadiuntungkan,baikdarisegi tinggirtyaupahmaupunpeningkatanketerampilanyangdiperolehselamabekerja

dinegaratersebut.

Introduction

Inthe late twentieth century

wewitnessed the upsurgeinthe

movement of people across nation-states, someto flee the political upheaval in their

countriesandbecome refugeesin

othercountries, someleavingthe drudgery ofpovertyintheir home countriesforthe land ofpromise

inanother countrywhile others circulate from their less productiveruraleconomy for urban opportunities created by recentindustrialdevelopmentin

nearbycountries.Includedinthe

movements are anincreasing number of students leaving their

countries for foreign tertiary

institutions,andprofessionals working for multinational corporations moving across

countriestoservetheiremployers. Hence,there issufficientsupport

to Castleand Miller's (1993)

observation that the lateyearsof

thetwentieth century isan eraof internationalmigration.This is

because the international

* Abdul Samad Hadi, staff for Centrefor GraduateStudies Universiti

Kebangsaan Malaysia Bangi,Selangor, Malaysia.

Abdul SamadHadi

movementof peoplehasincreased

involumeanddirections,anditis expected that the number of

moverswillincreasefurtherinthe nextmillennium following the

space contraction of theworld during the process of glo¬ balization. The bulk of the

movements originatefrom the developing regions.However,

professionalsmove from the countriestovariousdestinations includingthose inthedeveloping countriestomanthemultinational corporations.Therecentsurgein

internationalmovementofpeople

isnot a newphenomenon.His¬ torically,internationalmovement of people involving the de¬ veloping countries such as Malaysiahastakenplacesincethe

15thcentury whenthe European explorers openeda channel of

interactionbetweenthepeoplein

the SoutheastAsian areaand the peopleinthe restof the world. Some forms of current inter¬ nationalpopulationmovement involving Malaysia are the

continuationof the population movements generated by the inter-countrylinkages developed during the British colonial rule, suchas the in-movements of

Bangladeshworkerstotheservice

sector in Malaysia. In fact,

movementsofPhilippinestothe

United States and Indianand Pakistanis workerstoBritain are onfamiliar channel developed under colonialism.Other forms of labor movementslately have takenplace betweencountries whichhaveno formal political linkagesinthepast, suchas the

incoming of maids from the

Philippinestowork inMalaysian homes,as partsoftheirmovement streams tothe MiddleEastern

countries.Thebulk of therecent

labor migrationintoMalaysia nevertheless originates from

Indonesia.Thislabormovementis insomewaytherejuvenation of

historicalmovementsof peoplein the 'Nusantara'.

Thispaper isabout the post 1970 Indonesian workers in Malaysia. It will discuss the

movements of theseIndonesian workers to Malaysiawithin the general context of worldwide

movementsof workersin recent decades. Their movementsare

articulatedwithin theframework

of the newclassical economic

argument,and theseworkers gain fromthemovementalthoughthey

arefoundinthejobcategorythat is shunnedby the locals. The

prospects for theworkers haveto

berelookedinthecontextofthe recentAsianfinancialmeltdown.

RegionalLaborCirculation:Indonesian Workers inMalaysia

Socio-Economics Convergence

andTheMovements of

Workers Worldwide

Certainpartsoftheworldhave emergedintheclosingdecadesof

the twentieth century as the centers of socio-economics

opportunitiesandconsequently they become the favored destinations of workers from surroundingareas.Thesecenters

are relativelymore developed offeringopportunitiestopeoplein

relatively lessdevelopedareas.

Utilizing the data from Segal's Atlasof InternationalMigration

(1993),wehaveextractedthethree consecutive diagrams below. Although the data maynotbe comprehensivetofullyrepresent

the totalmovementsof people over the years throughout the world, they are still usefulto illustrate the concentrationof

moverstospecificareasoverthe globe.

FromFigure1,asubstantial number of people (about 80 million) were estimatedtohave movedinternationallyinrecent years andthe trendisexpectedto

showanincrease inthefuture.It

iscertainthatsuchalargenumber of migrants will impactdirectly notonlyonthe varioussending

areasbutalso onthecountriesthat

haveemergedas thepersistent

destinationareasforinternational

migration.InFigure2,the various receiving regions for voluntary international migration are

identified. North America,

Western Europe,the MiddleEast,

Japan,HongKongandpartsof the SouthEast Asian countries are seen to haveattractedpeople largely from the surrounding countries. Similar

origin-destinationlinkagepatternsare observed forthemigrant workers

inFigure3.This meansthat the flows of migrantworkers took

placewithinthe regionalaction

spaceof international migration.

Likethe internationalmigrationin

Figure2,these migrant workers hadcomefromcountrieswhich mightormightnothaveprevious relations with the destination

countries.Those workers, some travellinga great distancefrom their country of origin,usually involved those from areasthat alreadyhadsomeformofrelations suchasthose fromthe ex-colonies. Thedestinationcountries are developedcountries that have sustained theirdevelopmentand they are seen as centers of

opportunities.WesternEurope,

NorthAmerica andJapanarethe

triad economic giantsoftheglobal economy.Their industrialstrength have dominated the world in

wealthaccumulation such that

AbdulSamad Hadi

Figure1

World Migration Trends Total Number of Foreign-Bom in All Countries

to

-90

-19

-1909 1990 ion 1700

Source:Segal, 1993.

these countrieshavebuiltastrong image of areaswithwidespread opportunities.Theothercentersof

socio-economics convergentare

the newly industrializing

economies inEast Asia and in Latin America (Bohning,1972;

King,1993;Segal,1993;Hourani, 1991). Incontrast,the countriesof originlagindevelopmentwith

excess labor following their

relatively higher natural populationgrowth and slower

rateofsocio-economicsdevelop¬ ment (UNCAD, 1994& 1997). Theyarecountriesinpartsof Latin America,SouthernandEastern

Europe, Africa, South and Southeast Asia.

UnderlyingProcessof

InternationalMovement of Workers: TheMalaysianCase

The international migration patternsofworkersthe worldever

5000km

Figure 2: GLOBALVOLUNTARY MIGRATION: RECEIVING COUNTRIES

-

Greaterthan 50,000

andlessthan 750,000 Migrationflows 50,000

—

750,000 ormore orlessarenotdepicted

£

I?

r

o

E*

§

s

%

SOWkm

ROBINSON PROJECTION

Figure3:INTERNATIONALMIGRANT WORKERS

-

1990 NUMBER OFMIGRANTS

-

Less than 730,000

RegionalLabor

Circulation:

Indonesian Workers inMalaysia

discussed earlier illustrate a realistic

response

tothe accu¬ mulation

wealth

intheestablished industrial

areas

of Western Europe, NorthAmerica,Japan and

the

neWly

industrializing countries in the Asia-Pacific

including

LatinAmerica which have created varied work opportunities forworkersinthe less developedcountriesaround themttrattheirown

workers

have shunned.Thesejob opportunities includehard manualworkinthe constructionindustriesandinthe

agricultural

anddomesticsectors. Massey,wholeadsanIUSSP committeeonmigrationfromthe countriesofthe southtothe north

examinesand assesses current

theoriesofinternationalmigration

toderiveaframeworkofanalysis thatwillexplainthe international migration process from the countriesofdiesouthtothenorth (Masseyetal.,1993).Itishoped thatsomepolicyinitiativescan thenbeformulatedtoregulateand protect workers and die desti¬

nationcountriesfrom negative

outcomes.The group examined theories that have been built aroundeconomicsformulations,

inparticular thenewclassical

economic, formulations and proceededtolookintoexisting theories onsocialnetworks and the role of institutions in

international migration. The group also discussed

conceptual

frameworks

that

have

been

developedbyGurtnarMyrdaland the worldsystemtheory.

The

committee argued that

the

available

theoriesoninternational

migration havesetthecausesat variouslevels of analysisacross thecountriesof theworld.The groupstatedfurtherthatalthough propositions,assumptions and

hypotheses

thatcanbederived fromthe theoriesdonotcontradict each other, eachhasitsown specific policyimplications.The bulk ofthe existing theories that the group

discussed

seems sectoralintheircoverageandas

such,they maynotbehelpfulto

explain fully the process of international population mi¬ gration, letalonetoexplain the

movementsof workers across bordersof nation-statesin recent years.The world systemtheory offersmorepromisebutithasto bereworkedtobringthesituation

inaparticularcountry intofocus

inordertohelpusunderstandthe increasing flows of foreign workersintodie country.

Oneway tohelpaccount for theattractionofforeign workers

intoMalaysiainthe post-1970 years is to relate the recent

Malaysian socio-economic

* changes _to the

process

of

Abdul SamadHadi

globalization(Robertson,1992).In the past, Hobsbawm (1979) arguedthat industrialproduction inthe worldhadbeenconfinedto thenation-states intheindustrial west.Since about theseventiesthe process of industrialproduction hadspreadallover theworld, initiallyfromthewestand Japan tothenewlyemerging industrial

economicsintheAsia-Pacific rim. CountriesinLatinAmericaandin Asiaemergedatdifferenttimesas

the newly industrializing countries.Theemergenceofthese newly industrializingcountries was made possible by global industrial restructuringandthe outflows ofinvestment outofthe industrializedcountriesthrough theactivitiesofmultinationaland transnational corporations

(Dicken,1992;Dunning,1993).For many decades in the past, investmentsfromtheindustrial

countrieswerepartlychanneledto

their coloniestoproduce local

resources for industrial pro¬ duction in the metropolitan centers, but in recent years investments from the old industrial countries to the developingcountriesincluding former colonies are for the productionof industrialproducts for theworldmarkets.Therearises a newinternational division of labor replacing the old one

(Massey,1984).Inthiscontext,the focus of Malaysia'seconomics

undertheBritishcolonialtime was

fortheproductionofrubber and

tin.Duringthat period,'Malaysia' (Malaya, Sarawak and North

Borneo then) became the destination of migrantworkers frombothSouthern Chinaand

SouthernIndiatowork inthe colonialmultinationalcompanies

in rubber and tin mining industriesandfrom

Java

totoilin

the ruraleconomies.Inthe initial

stage,thebulk of the Chinese, Indianand Indonesian workers

were temporarymigrantsinthe country.Theyreturnedhomeat thecompletionoftheircontractor

stayasthecasemightbe.Inlater years,especially after the Second World War, these workers remainedmorepermanentlyin Malaysia following internal changesinpolitiesinIndia,China, Indonesia and Malaya. The multiracial make up of the Malaysiansociety today isthe outcomeof the movementsof workers from thesecountries in

thepast.

In the new international

division of labor,Malaysiahas developed slowly into an

industrializedcountrytoenableto solve some persistent socio¬ economicsproblemsarisingfrom themulti-ethnic,multi-cultural

RegionalLabor Circulation:Indonesian WorkersinMalaysia

and theunevenimpacts of British colonialism on the Malaysian people.Fornearly13yearssince itsindependencein1957Malaysia

hadtograpplewithwidespread poverty,underdevelopmentand

theproblemof nationbuilding. The global shift inindustrial

productionhasprovidedMalaysia

withsome solutionsto itsnational problems. Althoughinthe new

international divisionof labor, Malaysiahashadto comefaceto face withthepresenceandwith therisingnumberofmultinational

and transnational companies whose power some observers arguemay dilutethegrip of the state on its own control, the

country hascome to termwith

their presence.Itistruethat these big companies can move to any

countrytheywanttolocate their industrialactivitiesandcanplace demandsontheMalaysianstate for the provision of certain

infrastructuresandamenitiessuch as the demand for specialfree tradezonesand industrialestates

closetoport andairportfacilities,

theMalaysianstatestillhas some

controlontheiroperations.There existssomekindof arrangements thatbenefitboth partiesin the

short andlongterms. Between 1970-1997Malaysia recorded gains from the industrial developments.Forabouttenyears

(1987-1996)Malaysiaexperienced higheconomicgrowth, averaging eightpercentperyear.Inshort,the incomingofmultinationalswith investments inmanufacturing industries from the developed countriesandalso from the newly industrializingcountrieshave broughtonthe countryawealth

accumulation. Mohamedand Yokoyama (1992) argued that Malaysiawasthen abletoadapt to the changing social and

economic conditionsof the time

while the economy of the developed countries was in

difficultieswithveryslowgrowth, byadoptinga moreliberalview

towards longterminvestments and tax incentives that were

attractive to the active private sector participating in the developmentofthecountry.The high economic growth was sustained through policy

measureswithina continuingly stablecountry.Withinthe scenario of growthandpolitical stability,

localinvestmentswerealso rising inthoseyearstohelp spurfurther economicgrowth. The expansion

in export industrialization has

hastened the changes to the Malaysianeconomic structure fromanagriculturalexport base

to anindustrialexportbase.The changes in the Malaysian

economic structureinturnhas

AbdulSamadHadi

helped to bring about an accelerated transformation ofthe Malaysian society. The new

industries that have been decentralizedfromthe national

growthpole down the urban hierarchyrequireda sustained supplyofworkers.At first,young

maleand femaleworkers fromthe ruralareasmigratedtothetowns to fill up vacancies in these industries.

As the economic expansion

continues, older agricultural

workers fromthevillages were

also drawnintothe workforceto

filluptheunskilled works that

hadgonetobegging.Thiswasthe timethatMalaysia witnessed the rising incidence of farmers abandoningtheir small riceplots andrubber stands fortheoff-farm jobsorjobsinthecities.

The attractionof workersto

Malaysiafrom thesurrounding

countries inthenewinternational division of labor is relatedtothe abovechangesin theMalaysian

economic structure.The some¬

what detailedaccountof socio¬ economic convergence in Malaysia vis-a-vis some neighboringcountries in the regionearlier isimportantin the attempt tosituate thecoming of immigrantworkers.Althoughthe

Malaysianpopulationincreasedat around 2.3 percentper year in

recentdecades, the totalactive populationisnotableto service the labor marketespecially in certainsectors which the local

workersbypassedforthe 'cleaner 'work. At this juncture,Malaysia begantoopenitsdoortoforeign workers to work in the

agriculturalsector atfirstand later diffused intothe construction

industries and certain servicesto which male foreign workers congregated (Ong

Jin

Huiand ChanKwok Bun [eds.], 1995; Martin,Mason,Ching-LungTsay, 1995).The demand for house helpers has alsoincreased,which hasbeen seenbythe arrivals of Filipino and Indonesian maids

intoMalaysianmiddleand upper classhomes.Alongsidetheflows of foreign workers were professionals, albeit ina much

smallernumber whocame to man

the multinational and trans¬

nationalcorporations,educational institutions and specialized

services.

The CircularMovementof IndonesianWorkers andIts Impacts

Upto1998,theforeignworkers inMalaysiahave come from several countries notably

Indonesia, the Philippines, BangladeshandThailand.The

RegionalLaborCirculation:Indonesian Workers inMalaysia

bulk of themhowever,camefrom Indonesia. The differences in development status between IndonesiaandMalaysia,thelarger reserve of under-employed workers inIndonesiaanda more

liberal attitudetowards foreign

workersadoptedbytheMalaysian

statehave facilitatedthe inflows ofmaleandfemaleworkers from allover Indonesialegally and illegally.Those who came in legallywillhavetoleaveattheend oftheircontractswhile theillegal immigrant workers havetowork under uncertainty thatthey might havetoleaveanytimeespecially when caught by Malaysian authorities. All of them,judging from their declaredintention, wanted to return to Indonesia eventually(IRPA, 1997).Thus,the

development ofexport industries inMalaysiainthe 1970's-1980's hasshapedaform ofinternational circularmigrationofworkers from Indonesia (a kindof circular movementdiscussedbyHugo, 1978).TheMalaysian plantation areasand urbansettlements inthe

newinternationaldivisionof labor

are abled toextend the source

areas for workers beyondthe

boundaryoftheMalaysian nation-state.Foraslongastheeconomy was moving and generating wealth these workerswereableto

come into the country without

muchdifficulty.Evenintheevent oftheeconomicslow down after theAsian economic crisisstarting around July 1997,Malaysiawas

stillhavingasubstantial number of foreign workers. Thus, in February 1998,the Malaysian CabinetCommitteeonForeign

Workersinthe country estimated

that about 1.2 millionforeign workerswerestill inthecountry

despite theeconomicslow down following theEast Asian financial meltdown.Fromthetotal,755,000

workers were from Indonesia 306,000from Bangladesh,83,000

fromthePhilippines,19,000from

Thailand, 17,000from Pakistan and 39,000 from several other countries. The breakdown,

according to sectors were as

follows;30.7percentworked inthe

manufacturingindustries, 20.7 percent in construction, 11.6 percentasmaids, 11.03percent in

otherservicesincluding working as gas attendants, and 26.52 percent intheplantation

sub-sector.The totalnumber ofillegal

immigrants was still illusive despiteattemptstotracethemand

to legalize them. The number

couldstillremainlargedespite the

fact that Malaysia has limited

impervious borderswithmany

countries inthe region.

The fact that the comingof

these workers to Malaysiawas

AbdulSamadHadi

economically motivated, our

study confirmed the previous

observationsby many studies

earlier that these workerswere readytotakeanyworkofferedto

them andwerepreparedtowork

longerhours eventhoughthe wages were unattractive inthe eyesof localworkers.They kept living expensestotheminimum

and they stayed in the

accommodations provided by their employers, whichwas in

goodbungalowsforthemaidsbut

meremakeshift buildings for those workinginconstruction. Nonetheless, they saved on transportationcost.

Thereisa tendencyfor these workerstostay closeamong their ownethnicgroupsandworkers

from the sameplaceof originin the samework areas.Thisway theycouldmaintainclose rapport thatprovidedageneralsupport for their welfare inaforeignland. The workersalsomaintainedtheir socialnetworkswithpeopleinthe

home villages. The social networksweremaintainedand

strengthenedthroughremittances,

news and homevisits at least

duringnonworkingdays (hari libur) when the portsinMelaka,

Penangand

Johor

Bahruaswell

astheinternational airportswere

strainedtohandle thevolume of

workers travelling home to

Indonesia. Through these

networksalso,morenewworkers

were recruited from theareaof origin in Indonesia. These networks indeed served the workersinbothdirections;one as

achannelofmovementsfornew

workers inachainmigrationflow, andthe other, theassurancefrom

homeareasthatthe workers still haveaplaceto returntointhe end.

By the middle of 1997,the global financialcrisis inAsiahad broughtadrasticdownturntothe Malaysianeconomy. The ensuing

recessionhadimpactedonvarious economic sectorsof thecountry althoughtheextentof the damage was relatively mildsuch that

many of the sectors could still afford to retain some of their workers. However, a large numberof foreign workers hadto leave at the endof their stay

without any prospect of renewing

their contracts. The illegal immigrant workers were ina

worse predicament as most of them wereeasilylaid off without muchthoughtof compensation.

Overall, the incoming of Indonesian workers to Malaysia during the expansionof export industrializationhashelpedthe

process of industrializationand

the development of the country. Certainsectors ofthe economy mighthave beenneglectedin the

RegionalLabor Circulation:Indonesian Workers inMalaysia

process.Likewise,tothe extent that the workersgainedemploy¬

ment was aformofbenefittothe

Indonesianworkforcewho could

not beabsorbed fully intothe

Indonesianeconomicsector,thus lessening the pressure fromthese

workers forjobplacementsinthe Indonesianlabor market.

Investment and the Return Flows of IndonesianWorkers

From theearliersections, it is

learned that foreign direct investmentsintoMalaysiahasnot

only provided a push for industrializationinMalaysia,but also the increasing circulation of foreign workerstoandback from Malaysia.The presence of the Indonesianworkers hashelpedto

sustain the industrialization programinMalaysia. Indirectly, these workers contributed works towards moving thesectorsthat arebeing bypassed bythe local workerssothat the localworkers could concentrate on the manufacturingindustries.Asthe

manufacturingindustriesexpand, sodoes the vacancies for more

Indonesian workers. The

incomingof largenumbersof illegalandlegalmigrantworkers from Indonesia between 1970-1997were inpartas aresponseto the industrial expansion in

Malaysia.Inthiscircumstance,the Malaysiangovernmenthadkept

amoreaccommodativeattitude,

eventowardsthe illegal workers.

However,inthe long-terminterest

tobothIndonesia andMalaysia, the pursuit of enriching the neighbor policybyMalaysiaprior tothe1997economicslow down

in Asia, was an attempt to encourage Indonesiatogo for

export industrialization.The

industrial expansionmighthelp controlthe continuousflows ofthe IndonesianworkerstoMalaysia.

The circulation of Indonesian workers back and forth to

Malaysiashouldbeseenas aform ofhumanresourcesinvestmentto Indonesia. In the long-term activity,the experiencesgainedby theseworkerswhileworkingin

the various sectors of the Malaysianeconomywillbeuseful

in the development of these sectorsinIndonesia.Forexample those female workers in the multinationalelectronic industries

in

Johor

couldhaveeasily formed

the core group for similar

IndustriesinIndonesia.Relatedto thisissue,hadalltheseIndonesian

workersbeengivensomekindof training's before they left

Indonesia(aswhattheyhavebeen carriedonlately)these workers

would have been lesspronedto exploitationinMalaysia. They

AbdulSamadHadi

could demandbetter salariesas

well as belter working experiences.

Prospect of IndonesianWorkers CirculationtoMalaysia

Amajorbehaviorpatternofthe multinational andtransnational corporations is that these companies would shift to any place that offers them political stability and an investment

climate that is conducive for

maximizing their profits. As

industrialization progressesin

Malaysia,the country hasbegun

to losesome of itscomparative advantagesto someotherregions. Evenbeforethe Asianfinancial meltdownin1997,the investment trendsbyforeign companies have slowed down. In these circumstancesMalaysiacouldno

longersustain its imageasoneof the convergent socioeconomic

areas inthe EastAsianregionto

which foreign workers will

continueto moveto incoming years.As forthepresenttime,the Malaysianlabormarketisstillable

toabsorbforeignworkers albeitin

amuchreducednumber.

Conclusion

Globaleconomic restructuring inthe lastfewdecades ofthelate 20thcentury hasgivenMalaysia the optiontoparticipate inthe

global industrialization process

andtoemergeinthe presenttime

as one of the newly rising

industrializingcountries inEast

Asia.Theprogressthat follows

bringsits ownproblems.The

relativelysmalllocalpopulationis opentopreference ofwork that doesnotincludethe moremanual and'dirty' jobs eventhoughthe

payisreasonably good. Malaysia hastorelythenmoreonforeign

workerstoservicepartsof itslabor requirements.Toforeign workers

thefact thattheyobtainedjobsin Malaysiaseems tohavefulfilled

their needs,butthejobs thatthey took often pay them minimally althoughthere areworkers who

could earn alargeamountoftake homepaybyworkinglonghours. Intheend,theyfindthemselves still marginal compared to the positionof the local workers. These Indonesianworkersengage

incirculationto and from their

villagesinIndonesiaasameans

of security arrangementsat the endoftheir stay inMalaysia.

RegionalLabor Circulation:IndonesianWorkers inMalaysia

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