EMPLOYMENT ASPECTS OF INDIAN FOREIGN WORKERS IN MANUFACTURING SECTOR IN MALAYSIA

Thirunaukarasu Subramaniam Mohammad Raduan Mohd. Ariff Prakash Arunasalam Department of Southeast Asian Studies, Faculty of Arts and Social Sciences University of Malaya, Kuala Lumpur, Malaysia.
ABSTRACT Recent years have seen an influx of foreign workers that came to Malaysia to seek employment as Malaysias tremendous economic growth created many employment opportunities. These foreign workers filled the job vacancies in sectors where Malaysians shy away due to dirty, dangerous dan demeaning (3Ds) nature of these jobs. The demand for foreign workers from Southeast Asia and South Asia is increasing as there is a high demand for workers in plantation, construction, manufacturing and services sectors in Malaysia. Local work force is simply unable to meet the demand for labour in the Malaysian labour market. At the same time, Malaysian government doesnt want the Malaysian economic growth to be halted due to lack of manpower. To better understand the presence of foreign workers in Malaysian labour market, this study has narrowed down its focus on Indian foreign workers (IFWs) in the manufacturing sector. Sixty IFWs employed in a furniture factory in Batu Tiga, Shah Alam, were asked to fill questionnaires which was prepared in Tamil language. Further, personal interviews were also conducted with selected informants to better understand the problems faced by IFWs. The main findings of this study are as follows. Firstly, they are found to work long hours and receive less wages. Secondly, two major expenditures incurred by these Indian foreign workers include levy payment and food expenditure. Expenditures on levy payment and food expenses comprise approximately 50 percent of their monthly income. Thirdly, this study also reveals that the quality of the accommodation facility provided by the employer is in a poor condition. Keywords : Indian, Foreign Workers, Manufacturing, Malaysia, Employment

1. INTRODUCTION Recent years have seen an influx of foreign workers that came to Malaysia to seek employment. Malaysias tremendous economic growth created many employment opportunities in all economic sectors. About 2 million foreigners work in Malaysia legally, and an estimated 1 million more work illegally.1 These foreign workers filled the job vacancies in sectors where Malaysians shy away due to dirty, dangerous dan demeaning (3Ds) nature of these jobs. The foreign workers in Malaysia hailed mainly from Southeast Asia and South Asia countries. In Southeast Asia, Indonesia is the largest exporter of foreign workers to Malaysia. Others comprise Myanmar, Vietnam, Thailand and the Philippines. From South Asia, the largest exporter of foreign workers to Malaysia is Bangladesh. Others came from Nepal, India, Pakistan and Sri Lanka. The demand for foreign workers from Southeast Asia and South Asia is ever increasing as there is a demand for workers in plantation, construction, manufacturing and services sectors. Malaysian work force is simply unable to meet the demand for labour in the Malaysian labour market. At the same time, Malaysian government does not want the Malaysian economic growth to be halted due to lack of manpower.

Star Online, March 24, 2010, Amnesty International urges Malaysia to protect foreign workers . Available at http://thestar.com.my

Table 1 shows that most of the foreign workers in Malaysia came from Indonesia, comprising 56.1 percent of total foreign workers in Malaysian labour market in 2007. The second major exporter of foreign workers to Malaysia is Bangladesh comprising 10.6 percent of total foreign workers. According to a report by Asian Economic Institute, in 2006, the top three sources of Malaysian foreign workers are Indonesia (65.7 percent), Nepal (10.8 percent), and India (7.6 percent).2 As of early 2008, foreign workers make up 21 percent of the 11 million-strong labor force in Malaysia, where unemployment is at about 3.5 percent.3 Table 1: Total number of foreign workers in Malaysia according to Country of Origin, 2000- 2007
Country of origin Indonesia 2000 2001 2002 2003 2004 2005 2006 2007

603,453 (74.8) 2,335 (0.3) 14,651 (1.8) 158,149 (19.6) 3,101 (0.4) 25,407 (3.1) 807,096 (100)

634,744 (74.7) 2,508 (0.3) 11,944 (1.4) 114,308 (13.5) 2,392 (0.3) 83,933 (9.9) 849,829 (100)

788,221 (73.8) 20,599 (1.9) 21,234 (2.0) 82,642 (7.7) 2,000 (0.2) 152,833 (14.3) 1,067,529 (100)

988,165 (73.9) 10,158 (0.8) 17,400 (1.3) 94,541 (7.1) 2,141 (0.2) 224,575 (16.8) 1,336,980 (100)

1,024,363 (69.7) 5,463 (0.4) 16,663 (1.1) 54,929 (3.7) 1,156 (0.1) 367,516 (25.0) 1,470,090 (100)

1,211,584 (66.7) 5,751 (0.3) 21,735 (1.2) 55,364 (3.0) 13,297 (0.7) 507,507 (28.0) 1,815,238 (100)

1,174,013 (62.8) 13,811 (0.7) 24,088 (1.3) 62,669 (3.4) 11,551 (0.6) 583,077 (31.2) 1,869,209 (100)

1,148,050 (56.1) 18,456 (0.9) 23,283 (1.1) 217,238 (10.6) 16,511 (0.8) 621,267 (30.4) 2,044,805 (100)

Thailand

Philippines

Bangladesh

Pakistan

Others

Total

Source: www.epu.gov.my

Table 2 displays sector that employs foreign workers in Malaysia. The main sector that employs foreign workers is manufacturing representing 36 percent from the total in 2007. Other sectors include domestic helping, plantation and construction. Employment of foreign workers in plantation sector shows a declining trend whereas in construction an opposite trend is displayed.

Asia Economic Institute. (2010). Foreign Workers Unwelcome in Malaysia. Available at http://www.asiaecon.org/special_articles/read_sp/12488 3 Asia Economic Institute. (2010). Foreign Workers Unwelcome in Malaysia.

Table 2: Number of foreign workers in Malaysia by sector, 2000-2007

Sector 2000 2001 2002 2003 2004 2005 2006 2007

Domestic helpers Manufacturing

177,546 (22.0) 307,167 (38.1) 200,474 (24.8) 68,226 (8.5) 53,683 (6.7) -

194,710 (22.9) 312,528 (36.8) 222,886 (26.2) 63,342 (7.5) 56,363 (6.6) -

232,282 (22.0) 323,299 (30.6) 298,325 (28.2) 149,342 (14.1) 64,281 (6.1) -

263,465 (21.2) 385,478 (31.1) 350,351 (28.3) 252,516 (20.4) 85,170 (6.9) -

285,441 (19.4) 475,942 (32.4) 384,473 (26.2) 231,184 (15.7) 93,050 (6.3) -

320,171 (17.6) 581,379 (32.0) 472,246 (26.0) 281,780 (15.5) 159,662 (8.8) -

310,662 (17.6) 646,412 (34.6) 354,124 (18.9) 267,809 (14.3) 166,829 (8.9) 123,373 (6.6) 1,869,209 (100)

314,295 (15.4) 733,372 (35.9) 337,503 (16.5) 293,509 (14.4) 200,428 (9.8) 165,698 (8.1) 2,044,805 (100)

Plantation

Construction

Services

Agriculture

Total

807,096 (100)

849,829 (100)

1,057,156 (100)

1,239,862 (100)

1,470,090 (100)

1,815,238 (100)

Source: www.epu.gov.my

There are many factors that caused foreign workers to be attracted to work in Malaysia. The main push factors are political instability, uncertain economic condition, limited job opportunities and poverty. On the other hand, some of the the pull factors are higher salary received, differences in exchange rate, political stability, abundant job opportunities and better infrastructure. The objectives of this study are organized as follows. Firstly, this study aims to identify the employment aspects related to the Indian foreign workers (IFWs) in Malaysia. Secondly, it aims to identify the major expenditures incurred by IFWs. Thirdly, this study aims to analyse the elements of manipulation in their employment. Lastly, this study aims to identify the sacrifices made by the IFWs. 2. LITERATURE REVIEW

Many studies highlighted the push and pull factors. Some of the push factors in the place of origin include low wages, poverty, lack of employment opportunities or higher unemployment (Athukorala, 2003), economic crisis (Firdausy, 2005) etc. On the other hand pull factors comprise more employment opportunities, higher wages (Manning, 1998), better facilities etc. According to Rigg (1997), labour shortages in countries like Malaysia, Singapore and Brunei, coupled with a widening in wage differentials between countries and between sectors within countries, have amplified the economic incentive for movement. Wage equalization hypothesis states that in a perfectly competitive market, differences in wage can become a push factor (from lower wage country) and a pull factor( to a higher wage country) until equilibrium is reached in those two countries. Harris-Todaro Migration Model4 also points out that higher expected real wages is the determining factor in migration of labour. Firdausy (2005) for example stated that the wage rate received as a domestic helper in Malaysia is about RM350 (Rp. 875 000) and it is 4 times higher than the wage rate received by domestic helpers in Jakarta.
4

For an elaborate discussion on The Harris-Todaro Migration Model, look at Todaro M.P. and th Smith, S.C. (2003). Economic Development. 8 ed. Singapore: Pearson-Addison Wesley.

Several economic sectors that have seen a surge in foreign workers include services especially domestic helping, construction, plantation and manufacturing. According to Athukorala (2006) in Malaysia migrant workers are increasingly employed in manufacturing, mainly in small segments of lagging industries and in small and mediumscale enterprises. No doubt that the presence of foreign workers had helped to ease the labour force shortage in the Malaysian labour market (Idris and Rahmah, 2006) and contributed positively to Malaysias economic development (Kassim, 2005; Economic Report 2004/2005), their presence in this country has some negative repercussions too. Leaving aside the social consequences, the economic consequences to the Malaysian economy is something that need to be observed and reduced. Firstly, the remittances made by foreign workers represent an outflow from the Malaysia economy and it could be detrimental to the Malaysian economy in the long-run (Kanapathy, 2006). Secondly, the presence of foreign workers in Malaysia is also able to suppress real wages (Pillai, 1995 ; Devadason, 2009; Athukorala and Devadason, 2011). Thirdly, there will be negative consequences in restructuring the Malaysian economy from one which is labour intensive to capital intensive in the future (Kanapathy, 2006; Devadason, 2009). 3. METHODOLOGY To better understand the presence of foreign workers in Malaysian labour market, this study has narrowed down its focus on Indian foreign workers (IFWs) in the manufacturing sector. Sixty IFWs were asked to fill questionnaires which was prepared in Tamil language. As this study only focuses on Indian foreign workers in manufacturing sector in Malaysia, so all the Indian workers are taken as respondents. To further substantiate the findings from the questionnaires distributed, personal interviews were also conducted with selected informants in order to better understand the problems faced by IFWs. These respondents were employed in a furniture factory in Batu Tiga, Shah Alam. The data collection process was carried out from May to June 2007. 4. FINDINGS AND DISCUSSION

PERSONAL BACKGROUND Table 3 displays the personal background of the respondents. Most of the respondents fall in the 20-29 age bracket and with only primary education. Most of them are also found not to have any exposure in a foreign country.

Table 3 : Personal background of repondents Item Percentage(n=60) Age 20-29 56.7 30-39 23.3 Above 40 20.0 Religion Hindu 86.7 Christian 8.40 Muslim 5.0 Educational attainment No education 6.67 Primary education 63.3 Secondary education 23.3 Tertiary education 6.67 Working experience in a foreign country Yes 8.3 No 91.7 Medium of communication Tamil 100.0
[Source: Fieldwork, 2007]

ENTRY PROCESS Reasons to leave Fifty-five percent of the respondents surveyed indicated that the main reason for them to leave India is due to monetary necessity (Table 4). The respondents that stated monetary necessity as the main reason to leave India and to look for employment in Malaysia came form rural area and are from poor family background. Another 23.3 percent stated that the main reason for them to India is due to debt problem. Approximately 8 percent of the respondents stated that the main reason to leave India is because of lack of employment opportunities. Table 4: Main reason to leave India Reasons for leaving India Monetary necessity Debt Less employment opportunity Poverty Family problem No savings Marital problems Follow family members Tourism purpose Total
[Source: Fieldwork, 2007]

Percentage (n=60) 55.0 23.3 8.3 3.3 3.3 1.7 1.7 1.7 1.7 100.0

Method of entry Most of the IFWs that worked at Batu Tiga Shah Alam used agents as middleman to come to Malaysia. Ninety-five percent of the respondents used the service of an agent. The agency services is needed because the job securing process becomes easier and all the necessary paperworks will be handled by the agent. These agents also have good contacts in Malaysia. Two of the respondents came on their own and another respondent was invited by one of his friend who has already been working here. Most of the respondents also used the service of an agent by the name of Prakash.5 Even though some of these IFWs have never seen the agents, they put their complete trust in them. They gave a huge sum of money to these agents to look for jobs, prepare visa and to arrange contacts to work in Malaysia. However according to some of the informants, from ten agents at least one cannot be trusted. One of the IFWs for example has the experience of being cheated by an agent. According to Senthil:
These agents are paid approximately Rps 90,000 for airfare, visa processing and levy payment for three years. I realized that all promises are simply lies. Upon arrival we were told that all expenditures incurred for airfare, and levy payment will be deducted progressively from our salary.6

Cost Incurred Every IFW that came to Malaysia spent a different amount of money. From the survey, it is evident that these IFWs spent a large amount of money. Table 5 shows the amount of money spent to come to Malaysia. The lowest cost incurred is Rps 80,000.00 (MYR 8,000.00) and the highest is approximately Rps 100,000.00 (MYR 10,000.00). Approximately 17.0 percent of the respondents spent Rps 80,000.00, 50.0 percent spent Rps 85,000.00, 3.3 percent spent Rps 87,000.00, 16.67 percent spent Rps 90,000.00. Approximately 13.0 percent of the respondents spent more than Rps 90,000.00. Table 5: Cost incurred Amount spent (Rupee)7 80,000 85,000 87,000 90,000 95,000 100,000 Total
[Source: Fieldwork, 2007]

Percentage 16.67 50.0 3.33 16.67 3.33 10.0 100.0

Even though the amount of money spent varies, the main objective of their presence is the same that is to obtain as much money as possible. These IFWs are ever willing to sacrifice in order to have a better life both for them as well as for their family members. This study reveals that there are a lot of cheating elements in the recruitment process of IFWs to Malaysia. Some of the respondents admits that they were cheated by the agents. Some of the agents after receiving half of the payment will eventually disappear. Quite a number of respondents have to borrow money again from their friends even though the interest charged is much higher that is Rps 20.00 for every Rps 100.00
5 6

Personal interview with Jega at Subang on 23rd of May 2007 at 6.00 p.m. Personal interview with Senthil at Subang on 27th of May 2007 at 5.30 pm. 7 The exchange rate at the time of this study is one Malaysian ringgit equals 15 Indian Rupees.

borrowed. The IFWs also pay different interest rates as it varies on the basis of with whom they borrowed, the amount borrowed and whether they know the lenders personally or not. If the borrowers know the lenders, the interest charged will be much lower (for example Rps 10.00 for every Rps 100.00 borrowed). The money received by the agents will be used to buy air ticket and to cover visa processing costs. After deducting all the expenses, the large portion of the money goes as commission to the agents both in India and in Malaysia.

Sources of finance The dreams of every IFWs that came to Malaysia is to earn as much money as possible This caused them to willingly spend a huge amount of money. Table 6 shows the source of financing. Only 10 percent of the IFWs surveyed use their personal savings to come to Malaysia. The remaining 90 percent borrowed with interest ranging from Rps 10.00 to Rps 20.00 for every Rps 100.00 borrowed. Table 6: Source of finance Source of finance Saving Borrowing
[Source: Fieldwork, 2007]

Percentage 10.0 90.0

Interest (Rps) 0 Rps 10.00 to Rps 20.00

They came with the expectation that they can payback all the debts taken as soon as possible. But they are unable to settle the debt as their take home salary is lower after deducting levy payment, electricity and water bills. This causes them to remit money only once in three months. Money remitted to India is only sufficient to pay the interest. If only the interest is serviced, the principal borrowed will remain the same. Thus, the IFWs will try their best to send a bigger amount of money to settle the principal with its interest. According to Murugesu, one of the informant:
The amount of money that I borrowed to come to Malaysia is Rps. 85,000.00. Now, I can only send approximately Rps. 5,000.00 in every three months. The money sent can only cover the payment of interest for the principal 8 borrowed.

Most of the respondents have to be thrifty in order to sent money to India. There are instances where some of them became ill due to lack of food. They feel it is better for them to go back to India, rather than going through hardship in Malaysia. Documents The travelling documents in possession of the respondents are photocopies and not the original documents. These documents are important to verify that they are legally allowed to live and work in Malaysia. The employer will keep the original document because of the fear that the IFWs will leave their present job to a better paying job. This causes the respondents to be tied up with the present employer throughout their stay in Malaysia. If some of the IFWs forgets to bring their document when they go out and if they are caught they just have to utter the phrase aunties worker and immediately they will be released by the enforcement officers. Their movement are very much limited as their employer

Personal interview with Murugasu at Subang on 27th of May 2007 at 6.30 pm.

keeps their passports. They cannot even leave Malaysia as a tourist even to Singapore for example to visit their family members.

EMPLOYMENT ASPECTS Previous employment Table 7 below shows the respondents previous employment prior to their arrival in Malaysia. Most of the respondents (52 percent) are found to work as farmers. This is not surprising as 70 percent of Indian population lives in rural areas and are mainly involved in agricultural sector. Quite a number of them are also found to be involved in services sector employment such as driver, sales personnel or milk vendor. It is also interesting to note that there are respondents who worked in government sector as assistant teacher and bus driver. They were willing to leave their permanent employment in order to obtain a better wages in Malaysia. There are also respondents who were self-employed and were willing to forego their businesses in order to work in Malaysia. According to Pachaippan, one of the informant interviewed,
I was rearing cattle. I sold my cows to pay to the agents so that I can come to Malaysia. One of my friend that came to Malaysia earlier made a fortune. Selling milk in India is very competitive. 9

Table 7: Respondents previous employment in India Sector/Employment Percentage(n=60) Farmer 51.7 Driver 10.0 Factory worker 6.7 Sales personnel 6.6 Building house 5.0 Own business 3.4 Milk vendor 3.3 Trade Union 1.7 Electrician 1.7 Teacher 1.7 Mechanic 1.7 Tailor 1.7 Welder 1.7 Fisherman 1.7 Education 1.7 Total 100.0
[Source: Fieldwork, 2007]

Only a handful of them that had previous experience in manufacturing as factory workers (approximately 7.0 percent). They worked mainly in stone, cement and wood factory.

Personal interview with Pachaipan at Subang on 23rd of May 2007 at 5.30 pm.

Current employment Table 8 shows the current employment of respondents in Malaysia. Even though most of the respondents do not have experience in manufacturing sector they were willing to take the challenge. Approximately 50 percent of the respondents worked in furniture factory as production workers, 15 percent as machine operators, 33.4 percent in packaging unit and the remainder as storekeeper. Table 8: Current employment Assignment /Unit Production operator unit Packaging unit Machine operator unit Storekeeper Total
[Source: Fieldwork, 2007]

Percentage (n=60) 50.0 33.4 15.0 1.60 100.0

Working Hours The IFWs work 8 hours a day. They start to work at 7.45 a.m and finish at 4.45 p.m. An hour of break in total will be given which is divided into three small breaks. First break will be from 9.45 a.m to 10.00 a.m., second is from 12.30 to 1.00 p.m and the third is from 2.45 to 3.00 p.m. If there are too many furniture orders received by the company and it need to be met in a short period of time, they would do overtime. During festive season especially Chinese New Year, they have to work until 11.00 p.m because the factory will normally be closed for a week. All IFWs will be asked to complete their tasks as quick as possible. Payment of overtime is dependent on the days that the repondents work. This factory do not pay double if they work on Sundays because the employer will deduct the overtime to pay for water and electricity bills. Some of the workers complained that if they dont want to work on Sundays, they will not be allowed to work on the following day. This is an act of revenge by the employer indirectly. What is obvious is that the action of the employer is clearly against the 1953 Malaysian Employment Act. Sometimes the employer will not give overtime for workers that do not want to work on Sundays. So, they have to work on Sundays even though they are not willing. Workers that worked on public holidays are only paid daily wages and not the double payment. There are many cheating and manipulation that takes place in the factory studied. Based on the interviews, we found that sometimes the employer is also willing to employ workers without permit as these workers are willing to work at a lower wages which is as low as MYR15.00 a day. Most of the IFWs that are working in this furniture factory is approaching the end of their contract. Most of them had worked for more than two years. As their permits are fixed to work with their present employer, they cannot leave to other factories. Their passports are taken and kept by the employer to avoid the workers from running away. In a month, the IFWs will work for 26 days except on Sundays. Sometimes they have to work on Sundays and even on public holidays. Income IFWs came to Malaysia with the expectation that they can accumulate as much money as possible. They were also promised many perks such as high salary, allowance and bonuses by their agents. But upon arrival, they realised that most of the promises are just promises which were never fulfilled. The salary received is about MYR18.00 per day. If they work overtime, an additional MYR2.50 will be paid every hour. On average, if they work for 26 days in a month they will earn an income of MYR468.00. The salary received

will be deducted with a levy payment of MYR120.00 every month. The period of levy deduction is throughout their legal stay in Malaysia. When asked about levy payment to one of the informant, Vinnirex, he said:
This levy is deducted in stages. I am not sure how my employer deduct the levy 10 payment as we were not informed about it.

The net salary received by these Indian foreign workers are only about MYR338.00 a month. They will also sometimes have to work on Sunday if the company receives too many orders. The salary on Sundays will be doubled to MYR36.00. If they work on two Sundays in a month, the employer will deduct the salary received on one Sunday to pay their water and electric bills. So, the payment received is only for one Sunday. Table 9 shows the monthly income received by IFWs in Malaysia. Most of the respondents received an income of MYR500.00 MYR599.00 a month (approximately 48 percent). Only 5.40 percent of the respondents received an income of more than RM900 and above. It is worth mentioning that the income received is before deduction of bills and levy payment of RM120.00 per month. Table 9: Respondents monthly income Monthly income Less than RM500 RM500-RM599 RM600-RM699 RM700-RM799 RM800-RM899 RM900 and above Total
[Source: Fieldwork, 2007]

Percentage (n=60) 21.4 48.2 14.3 3.6 7.2 5.4 100.0

EXPENDITURE, SAVINGS AND REMITTANCES Expenditure Two major expenditure incurred by IFWs include levy payment and food expenditure. For levy expenditure, the employer will deduct the payment form their salary.11 The levy payments vary according to sectors. The period of stay in Malaysia will also determine the amount of levy paid. The longer they stay in Malaysia, the lesser the amount of levy paid. Table 10 shows the amount of levy paid by the respondents. Approximately 66 percent of the respondents are found to pay a levy of RM154.00 a month.

10 11

Personal interview with Vinnirex at Subang on 13 June 2007 at 5.10 pm. Levy is payment imposed by Malaysian government on foreign workers. Annual levy payment for foreign workers in manufacturing sector is RM1200.00

10

Table 10: Amount of levy paid by the respondents Amount of levy paid (RM) 100 110 115 120 130 150 151 154 155 156 159 160 Total
[Source: Fieldwork, 2007]

Percentage (n=60) 3.3 1.7 1.7 1.7 1.7 6.7 1.70 66.7 1.7 1.7 8.3 3.3 100.0

The expenditure on food is concentrated mainly on purchase of groceries needed on a daily basis. Most of the groceries needed will be purchased at Econsave, a local supermarket chain situated nearby their hostel. The workers normally do their shopping once a week especially on Sundays. They will buy groceries such as rice, dhal, sugar, salt and vegetables. Sometimes they will buy liquor to get rid of the exhaustion. They also sometimes buy a packet of cigarette which can last for several days. Our observation reveals that they are very thrifty in their spending. Table 11 shows the expenditure for food. Most of the respondents are found to spend a quarter of their monthly income on food. Approximately 70 percent of the respondents spend MYR150.00 on food. Approximetely 6.70 percent of the respondents are also found to spend an average of only MYR100 per month on food. These people tend to minimise their expenditure in order to save money to send to their homeland. Table 11 : Average monthly expenditure for food Average Monthly expenditure for food (RM) 100 120 125 130 150 180 200 Total
[Source: Fieldwork, 2007]

Percentage (n=60) 6.7 13.3 1.7 3.3 71.7 1.7 1.7 100.0

Another significant expenditure incurred by IFWs is telecommunication expenditure. Most of the respondents owns a mobile. If they are not able to purchase a mobile, they will buy the sim card and borrow their friends mobile phones to make calls to their beloved ones in India. Table 12 below shows the telecommunication expenditure of IFWs in Malaysia.

11

Table 12: Telecommunication expenditure Telecommunication expenditure (RM) 25 30 35 40 45 50 Total

[Source: Fieldwork, 2007]

Percentage (n=60) 6.67 30.0 1.67 8.33 1.67 51.7 100.0

Approximately 50 percent of the respondents spend MYR50.00 as telecommunication expenses mainly to call their beloved ones in India using mobile phones. The smallest amount spent on telecommunication expenditure is RM25 by approximately 7.0 percent of the respondents. The expenditure on telecommunication is approximately one eighth of their monthly income. The top-up will normally be done only once a month. About 90 percent of the respondents are found to use Digi line or 016 and the remainder uses Maxis or 017 line. Most of the respondents uses Digi line because the cost is much lower compared to other lines. Expenditure on clothing is less significant. As clothing last longer, it is normally brought from India. They also feel that clothings are more expensive in Malaysia as India is a major textile producer and clothings are cheaper in India. They will only spend on clothings when it is really necessary. Table 13 below shows the expenditure on clothings. Only 40 percent of the respondents spend RM30 for clothings being the largest amount spent. Table 13: Monthly expenditure for cloth/attire Monthly expenditure for cloth/attire (MYR) 5 10 15 20 25 30 50 60 Total
[Source: Fieldwork, 2007]

Percentage (n=60) 1.7 3.3 20.0 18.3 1.7 40.0 10.0 5.0 100.0

Several informants told us that they have a tendency to buy clothings only during Deepavali or if they want to go for travelling. They are also found to spend more on clothings when they want to go back to India especially as gifts for their family members. Other expenditures comprise a very negligible amount. This include spending on cigarette, liquor, purchase of four digit number, purchase of newspapers and magazines, and purchase of items for daily use such as soap, toothpaste etc. Savings The IFWs aim to come to Malaysia is to save as much money as possible and eventually send it back to India. They love to save and normally spend wisely. Most of the respondents are found to keep their money in Maybank, one of the well-known local bank

12

to ensure the safety of their savings as the employer will bank-in their monthly salary into their respective bank accounts. Table 14: Respondents Saving Amount saved (RM) Less than MYR250 MYR250 MYR349 MYR350 MYR450 Total
[Source: Fieldwork, 2007]

Percentage(n=60) 10.0 77.0 13.0 100.0

Table 14 shows the amount of money saved by the respondents every month. Approximately 77 percent of the respondents are found to save between MYR250.00 to MYR349.00 a month. Approximately 10 percent of the respondents save less than MYR250.00 a month and the remainder save about MYR350.00 - MYR400.00 a month. The differences in amount saved is due the differences in the amount of salary received. Remittances Remittances are normally done by IFWs through banks or money orders. The money remitted will normally be used to pay the interest incurred on the loans made or for the use of family members. Sometimes the IFWs do send money through their friends that go back to India either for holidaying or for good. Table 15 : Amount of money sent to India Amount sent Less than RM100 RM100 RM199 RM 200 RM299 RM300-RM399 RM400 dan above Total
[Source: Fieldwork, 2007]

Percentage(n=60) 5.0 8.0 72.0 8.0 7.0 100.0

Table 15 shows the amount of money remitted by IFWs. Even though the salary received is little, they will ensure that they send money to India as their family members live in high expectation. Approximetely 70 percent of the respondents are found to send between RM200.00 to RM299.00 a month on average. Only 5.0 percent of the respondents send less than RM100.00 a month and 7.0 percent of the respondents send more than RM400.00 a month. DILEMMAS AND SACRIFICES This study also reveals that there are many dillemmas that are faced by IFWs in Malaysia. Most of the respondents were cheated by the agents causing them to placed in an inconvenient and unsatisfactory working environment. Initially, agents promised that a good job will be given with a decent salary. Upon arrival, they were told that they will work in manufacturing sector. The salary paid is also much lower and not as promised, as the levy payment is deducted. The agent initally told them that levy payment is included in the initial payment. Most of the respondents were shocked to learn that the levy payment has to be paid again from their monthly salary. A report by Amnesty International also reveals that migrant workers brought to Malaysia by agents are often deceived about their pay, the

13

type of job - some dont even get work and their legal status in the country. 12 Even the employer told the workers that this is the amount of salary that you will receive, if you want to work you can work and if you want to go back to India, by all means you can do so. The purpose of the employer in making those remarks is just to put fear in the heart of IFWs so that they dont report or complaint about the exploitation that is taking place to third parties. These IFWs are caught in a situation that they can do nothing. They do not have any choice that they have to work and finish up their contract in Malaysia.

Upon arrival to Malaysia, they were placed in a huge godown that are partitioned into small rooms made of plywoods. This little room will be shared by three or four individuals as there will be two double-decker beds placed in the room. Our observation reveals that the quality of the accomodation provided by the employer is rather unsatisfactory (see Devadason, 2009 for example). These issues gave so much pressure to them causing them to loose interest to work. From the social aspect, their relationship with local Indians is not as good as compared to other races as they have some negative experiences such as being robbed by local Indian youth. They are also fearful to talk with local Indian due to such negative experiences. Senthil one of the IFWs for instance was robbed while he was going back to his hostel from Econsave. Dinesh also was a victim of robbery. According to them:
Our monies and phones were taken. Due to this incident, we are afraid to mix with local Indian community. If we want to go out, we will go in a group as we 13 feel safer and the local Indian youth will not disturb us.

Personal interviews with the informants also reveal that several IFWs change their identity by putting on earrings and bangles to create an image of a rowdy so that they are not disturbed by local Indian youth. Our observation also reveals that there is a slum area called Bunga Raya Village inhabited by local Indian community near Econsave. Most probably the Indian youth that robbed Dinesh and Senthil came from this village. The lives of IFWs also involve many sacrifices. They have to sacrifice their life comforts such as movie-going, home-cooked food and attachment with their families. They are caught in a situation where they cannot return until they complete their three years contract in Malaysia. They are willing to endure hardships to ensure that their debt is settled. Another dimension of sacrifice made is leaving their parents, wives and children to work abroad. They cannot meet their beloved ones for at least three years. They also do not have the opportunity to attend family functions such as marriages even though they are the main contributor in terms of finance to ensure the auspicious function takes place. Sometimes they also do not have any opportunity to attend funeral of the beloved ones. They will just communicate over the phone. 5. CONCLUDING REMARKS Most of the IFWs that came to Malaysia were working as farmers in India. They do not have any experience in manufacturing sector. They are found to receive lower wages. Their expenditure is mainly focused on levy payment and food expenditure which comprise more than 50 percent of their income. With remaining income, they have to ensure all
12

Star Online, March 24, 2010, Amnesty International urges Malaysia to protect foreign workers. Available at http://thestar.com.my 13 Personal interview with Senthil and Dinesh at Subang on 23rd of June 2007 at 5.30 p.m.

14

debts taken, together with its interest are settled progressively. Even though there are many cheating elements involved in the recruitment process, these IFWs do not waver. They will be as thrifty as possible to ensure that all debts taken are settled. They will remit money at least once in three months even though the amount remitted is small. They realised their family members are dependent on the money sent. They also support the marriage expenses of their sisters in the form of dowry payment. Based on the findings, the following policy implications can be derived. Firstly, there are so many cheating elements in their recuitment process. To avoid all these fraudulant elements, the government should abolish the services of agents. The Malaysian and Indian government should establish an independent unit called Foreign Workers Department/Unit in Malaysian embassy in India. If the foreign workers intend to work in Malaysia, they will register at the Foreign Workers Department/Unit and all the documents processing should be done by this unit. With the presence of this unit, the fraudulant elements can be reduced to the minimum. Secondly, the Malaysian government should implement minimum wages to avoid the exploitation of foreign workers. The observation made reveals that in a nearby automobile component factory, minimum salary received by the IFWs working there is MYR800.00 a month. IFWs in the furniture factory tend to compare their salary received with their counterparts in automobile component factory and this may create dissatisfaction as the money spent to come to Malaysia is almost the same. If the minimum wage mechanism is introduced, this sort of problems can be overcomed especially by eliminating exploitation by employers that want to gain more profit. Finally, the Malaysian government should provide guidelines regarding basic amenities provided to foreign workers. Basic amenities provided to IFWs in this study is found to be unsatisfactory. If the government provides a guideline on quality of the basic amenities, this would ensure that the welfare of the foreign workers is taken care of. The government should come up with a list of facilities that must be provided by the employer. Also, the monitoring and enforcement process will ensure that the quality of the basic amenities is at par with the standard guidelines prepared. If the employer fails to abide to the guidelines on basic amenities, government should cancel the permit to take foreign workers in order to ensure the welfare of the foreign workers is taken care.

REFERENCES
Amjad, R. (1989). To the Gulf and Back. Studies on the Economic Impact of Asian Labour Migration. Geneva: International Labour Office. Aris Ananta and Evi Nurvidya Arifin(eds). (2004). International Migration in Southeast Asia. Singapore : ISEAS. Athukorala, P.C. (2006). International labour migration in East Asia: trends, patterns and policy issues. Asian Pacific Economic Literature. Volume 20, Issue 1, 1839. Athukorala, P.C and Devadason, E. (2011). The Impact of Foreign Labour on Host Country Wages: The Experience of a Southern Host, Malaysia. Working Paper No.2011/03, Arndt-Corden Department of Economcis, Crawford School of Economics and Government, ANU College of the Asia and Pacific, March. Azizah Kassim. (1995). Recruitment and Employment of Foreign Workers in Malaysia. In in Rokiah Talib & Tan Chee Beng (eds,). Dimensions of Traditions and Development in Malaysia, Kuala Lumpur:Pelanduk Publications.

15

Azizah Kassim. (2005). Cross-Border Movement of Foreign Workers in Malaysia: A Comparative Analysis. Master Builders Journal, 3rd Quarter, 78-91. Available at http://www.mbam.org.my/mbam/images/MBJ3Q05pdf/@CROSSBORDER%287891%29.pdf Devadason, E. (2009). Socio-Economic Effects of Foreign Workers on the Host Economy: The Case of the Malaysian Manufacturing Sector, FEA Working Paper Series No.200927, June, Faculty of Economics and Administration: University of Malaya. Durall, R.F. (1989). Foreign workers in Malaysia: Issues and implications of recent illegal economic migration from Malay World. The Trade in Domestic Helpers.Causes, Mechanisms and Consequences. Kuala Lumpur: Asian and Pacific Development Centre.

Economic Report 2004/2005. Foreign Workers and the Malaysian Economy. Kuala Lumpur: Ministry of Finance Malaysia . Firdausy C.M. (2005). Trends, Issues and Policies Towards International Labor Migration: An Indonesian Case Study. Paper available at http://www.un.org/esa/population/meetings/ittmigdev2005/P02-CMFirdausy.pdf United Nations Expert Group Meeting on International Migration and Development. New York: Population Division, Department of Economic and Social Affairs, Hugo, G.J and Young, S. (eds.), (2008). Labour Mobility in the Asia-Pacific Region, Singapore : ISEAS Hugo, G.J. (2008). In and out of Australia: Rethinking Indian and Chinese Skilled Migration to Australia. Asian Population Studies , 3, 4. Idris, J. and Rahmah, I. (2006). Elasticity of Substitutions between Foreign and Local Workers in the Malaysian Manufacturing Sector. Pertanika Journal of Social Sciences and Humanities. 14(1), 63-76. Jamilah Ariffin. (1995). Foreign Migrant Labour in Malaysia: A Study of Institutions and Mechanisms at the Local Level. Cross-national Labour Migration in Asia and Regional Planning: Implications for Local Level Management, UNCRD Research Report Series No. 10 Nagoya, Japan. Jomo, K.S. (1993). Plantation Capital and Indian Labour in Colonial Malaya. In K.S. Sandhu and A.Mani (eds). Indians communities in Southeast Asia. Singapore: ISEAS and Times Academic Press. Kanapathy, V. (2006). Migrant workers in Malaysia: An overview. Paper presented at Workshop on East Asian Cooperation Framework for Migrant Labour, Kuala Lumpur, 6-7 December. Pillai, P. (1995), Malaysia, ASEAN Economic Bulletin, Vol.12, No.2, pp.221-236. Ramasamy, P. (2004). International Migration and Conflict : Foreign labour in Malaysia. In Aris Ananta and Evi Nurvidya Arifin(eds). International Migration in Southeast Asia. Singapore : ISEAS.

16

Rigg, J. (1997). Southeast Asia: The human landscape of modernization and development. London: Routledge. Todaro M.P. and Smith, S.C. (2003). Economic Development. 8th ed. Singapore: PearsonAddison Wesley. www.epu.gov.my

17