Exploitation among migrant labour

CHAPTER 1

INTRODUCTION

All human beings, irrespective of race, creed or sex, have the right to pursue both their material well-being and their spiritual development in conditions of freedom and dignity, of economic security and equal opportunity.
-1944 The Declaration of Philadelphia, ILO[1]

Am I been exploited, are a teacher been exploited, are a doctor been exploited, or else an insurance sales man been exploited? It seems to be the question of the day. In today’s world there are so many things occurring around and in front of us, thereby the word exploitation is been a crucial topic to be looked into depth. Thus, the initial explanation that tends to be exposed in this project paper is that exploitation is a crucial thing that is going through even after the onset of the Modern world system. The term “exploitation” in this paper will generally draw on the exploitation among migrant labour that answers the question above. They are really been exploited in the world system that is constantly under the umbrella of capitalism. The big trouble of the world today is that market forces are overwhelming the state institutions and this happens when the governments in the rich countries are being forced to scrap their welfare state services. Meanwhile in the poor countries forces to abandon populist measures introduced to uphold national independence and protect the poor’s.

In illustrating this paper, the well-known world system theory will be a theoretical framework basically in explaining the exploitation among migrant labour.The opening of the 21st century has witnessed continuing controversies over how nation states should react to potential migrant flows and the seeming inability of migrants to integrate into the receiving state. Whether migrants always benefit the population that is expected to receive them is quite another matter, however. The only clear beneficiary of migration is the migrant. Whether their movement benefits the people in the country of destination all depends on circumstances. That is why borders cannot be fully opened, just as in peacetime they cannot be fully closed. [2] Indeed, the investment in developing countries made by developed countries takes full use of the cheap labour. Meanwhile the migrant labour’s productivity is very comparable to local low waged workers.

Simultaneously, open border is urged as a parallel to free trade, as though people were goods. But goods do not go where they are unwanted, goods have no rights or feelings, goods do not reproduce or vote, goods can be sent back or scrapped when no longer needed. Immigration concerns people, not objects, and consequently political and social importance is potentially much greater than any economic effect it may have. All areas of human activity have safeguards and regulations because markets are imperfect. It would be a very harsh world without them. Absolutely free movement of people is no more possible then the absolute free trade. Trade is never free, and ‘free trade’ always depends on negotiated conditions. It seems that the border is symbolising a free trade, but the sad thing is that international system and international law itself is against international labour mobility especially as in the case of the free movement of migrant labour in question.

Subsequently, the national borders are precisely what are hurled faced by migrants in Europe and beyond. Ranging from temporary seasonal workers who are exploited in the fields of Andalusia in Spain; to “legal” migrants who live and work every day in Eurospace; undocumented migrants working in irregular jobs in Italy or the UK, in factories or in the home, as many women do; “tolerated refugees” living in an isolated “junglecamp” in Northern-Germany; migrants detained in a camp in Greece or Poland, or even in front of the externalized EU-borders in Morocco or Ukraine. They all are crossing and forcing the boundaries living inside and struggling against the same “monster” which is the border control. Even as a strong regional economic power, due to its extensive reserves of oil and gas, Kazakhstan have been identified by numerous cases of violations of the rights of migrant workers, especially those working in the agriculture and construction industries. Migrants without regular status and without contracts are particularly vulnerable to exploitation: long working hours, lack of rest days, confiscation of passports, non-payment of salaries and sale of migrant workers from one employer to another. In both Kazakhstan and Kyrgyzstan, corruption within the police, customs, and border officials places migrants at constant risk of extortion and deportation. Such violations are generally committed with complete immunity.[3]

Consciously, today’s migrants labour, men and women alike, face various challenges including poor conditions of work and harsh working environments, racism, sexism and labour market discrimination. In addition, women and men migrants frequently sacrifice decent living conditions, health care, nutrition and education. Women migrant workers’ concentration in private homes and other unregulated venues rather than public workplaces can represent more vulnerability in terms of discrimination on gender, racial, ethnic, occupational and nationality grounds. They certainly could find themselves victims of exploitation, hazardous work conditions and psychological, physical and sexual abuse. In occupations such as domestic work, women migrant workers often find themselves excluded from the right to family reunification. Large numbers of them can also often find themselves excluded from legal employment when arriving as spouses of temporary workers. It is widely recognized that the most painful social cost of migration is the separation of children from their parents, especially when it is the mother that has migrated.

Simultaneously, all over the world capitalist exploitation is unimaginable without the global differences, constructed through filters and zones, the hierarchies and inequality, and through the external as well as the internal borders. Illegalisation and deportations on one hand, selective inclusion and recruitment of migrant workforce on the other hand, are two sides of the same coin: migration management for a global apartheid regime, whose most precarious conditions of exploitation are based on the production of hierarchies in terms of rights and on racist discrimination. Low wage countries in the south are used to undercut wages through relocation of production, low wage sectors in the north are targeting young migrant workers: trying to keep them obedient by blackmailing them, as their right of residence is linked to their jobs. It surely makes sense that migrant labour is forced to live in precarious hell, and they still struggles and finds a no way out to improve conditions traditionally, or even voice demands for visibility, rights and citizenship.

Historically, in the last twenty years, World System theory has become one of the common structures used by historians and also the social scientists to account for the political economy of complex societies. The world system theory thus emphasizes the role of long distance exchange dominated by highly centralized core areas as the main factor explaining both the organization of less complex neighbouring, institutions, and routes of developmental change. The classic and defining example of a world system is the extension of European colonial control over Africa and the Americas from the sixteenth century to the present. But now, the system is well known as capitalist world system under which capitalism acting as a dominator in the class system divided by core and periphery in which situation that the core dominates the periphery. [4]

Ideas of Adam Smith, Ricardo, Karl Marx have significantly contribute to the development of the world system theory. Marxism does influence popular scholar like Immanuel Wallerstein who has analysis the modern world system that comprises core, periphery and also the semi-periphery.Wallerstein have stated that the relations between the three stages (core, periphery, semi-periphery) are interconnected with each other and there is an unequal dependencies among the three stage.[5] Thus, the unequal or unbalanced dependencies introduces another significance of stimuli in migrant labour as will be shown in the Malaysian case..

So, following from the historical development, the concept of nationality emerged to link citizens formally to the state. Simultaneously, the presences of international migration come to be defined as the movement of persons that is non-nationals or foreigner, across national borders for purposes other than travel or short-term residence. [6]

Significantly, globalization that drives as a force to modern world system has become more crucial since 1990s mainly after the collapse of Soviet Union. In a matter of fact, the trend of globalization has significantly widened the scope of free market economy albeit movement of capital and this has sufficiently created the income gap between developed countries and developing countries. Marauding capitalism in other words is farther reshaping as the free market system which are been dominated by the core or developed countries. Thus, with the wide economic disparity, labour market imbalances between the countries and the undeveloped labour migration regimes have all inevitably contributed to cross-border labour movement, especially immigrant labour.[7] Significantly, it is obvious that there is an unbalanced development going on mainly because of the surplus of production that is unevenly dispersed.

It can be stressed and pointed out that the migrant labour that has been a subject of exploitation since the emergence of capitalism and more critically known as world capitalist system. In capitalism, workers sell labour, so labour is a commodity as well that is bought and sold and has exchange value. It is exactly proven that all profit that gain by capitalism comes from the labours. Meanwhile, the flow and movement of workers to other countries are according to the labour market that is being caught under the power of capitalism. In this matter, migrant labour is the main momentum to the capitalist mainly to increase their capacity. Migrant labour which are largely from Asian countries such as Indonesia, Thailand, Vietnam and Philippines move to other countries due to the flow of the labour market system.[8]

Many migrant labour enter illegally or on various short-term pretexts seeking to stay and improve their position by any available means. And even the economic benefits of labour migration, once uncritically acclaimed, are less clear than they were and may well in some cases be negative when all costs are considered. Too easy an access to migrant labour can create distortion and dependency in an economy. Any large modern society which finds that it in some way needs constant flows of immigrants, over a long time, is suffering from this labour problem with its society or labour market or economy which it ought to rectify by reforming itself, not depending on the rest of the world. (Borjas 1996, Wardensjo 1999)

In no other area of public policy are we urged to believe without doubting whatever business has revealed about its supposed labour needs, and to give it all it wants. Business interests however are short-term. Easy immediate access to labour will always be preferred to the costs of training and capital investment for the longer term. According to fundamental economic theory, uncontrolled migration is always beneficial because labour is then enabled to flow from countries with abundant cheap labour and little capital to high wage areas where labour is scarce but capital abundant. Obviously, free migration is expected to equalise the ratio of capital to labour everywhere, until equilibrium is reached where wages have equalised and capital efficiency is maximised. Net migration then comes to an end.

However these simple assumptions are seldom satisfied. Poor counties with population to spare greatly outweigh destination countries. Compared with the latter, their populations are effectively infinitely large. The equalization of wages expected from this process means lower wages in the receiving countries. Fundamental political theory and practice tells us the wage reductions so welcome to economists and employers are distinctly unattractive to employees and electorates. Most migrants do not bring capital with them, in addition many move forreasons little connected with the labour market. So instead, the supporters of migration now spend much effort assuring us that the theoretically desirable macro-economic deflationary consequences of migration cannot actually arise, but that all can benefit from higher incomes. The latter argument is looking increasingly messy as evidence mounts that the effect is divisive. Previous immigrants, and the poorer sections of society,suffer adverse consequences while the middle class may enjoy cheaper services from migrant labour.[9]

In a matter of fact, the segmented labour market provides another escape route that some jobs will not be done by locals and must be done by immigrants. However one of the reasons why locals will find some jobs unattractive is because it is mostly immigrants who perform them. If employers can pay immigrant, not in local wages, they thereby become dependent on perpetual immigrant labour, in some cases illegal. The concept of segmented labour markets finds little realistic support on a large scale. Where such segmented markets do exist they tend to be a function of excessively low wages, insufficient capitalisation of the function in question or excessive levels of employment protection in the regular economy running hand in hand with illegal migrant for employment. The suggestion that some unattractive jobs must in future be done by foreigners implies the weed of a permanent ethnically distinct underclass.[10]

More strategically, migration changes economies and creates dependence on further migration. It allows obsolete low-wage, low-productivity enterprises to continue in poor conditions, which otherwise would have to raise the wages of their workers, introduce more capital intensive processes or export the function to the countries where it could be performed more cheaply for everyone’s benefit. International migration refers to the push and pull movements of populations across national frontiers that are the circulation patterns of persons in which who emigrate (exit) and immigrate (enter).

Simultaneously, one of the most striking changes in the character of international labour migration in Southeast Asia especially in Malaysia during the second half of the twentieth century has been the great increase in the scale, complexity, and significance of Indonesian labour migration. Malaysia had selectively practised ‘open borders” even after gaining Independence in 1957, and irregular migration revealed itself as a problem only in the early eighties when the economy began to slow down. In the first half of the twentieth century, there are plenty of migrant labours that comprised a large number and were welcomed both as settlers and temporary indentured workers.

Thus, it has been stated that the foreign workers come from twelve countries in the region that is from the ASEAN countries and neighbouring countries supplying a much needed workforce in Malaysia’s agricultural, construction, manufacturing and services sectors.[11] Of the 1,8 million persons registered in the statistics by the Ministry of Home Affairs, the largest number of migrants come from Indonesia (1,2 million) and works mainly in the plantation sector (381,582 of them) followed by Nepali (192,332 persons registered) mostly represented in the manufacturing industry (159,990). According to the figures, Indian workers (134946) are legally employed in the same sector (34685) but also in the services (61,273) and in the plantations (27,759). Other sending countries include Burma (88,573), Vietnam (81,194), Bangladesh (55,389), Philippines (21,694), Pakistan (13,296), Cambodia (5,832),Thailand (5,753), Sri Lanka (3,050) and China (1,295).[12]

Based on official figures, the foreign working force seems to be constantly growing. However, no consistent national immigration policy has been decided by the authorities. There is a total absence of direction between the various national Ministries involved in the management of migrant workers. The absence of a written immigration policy or immigration quotas also reflects the ad hoc approach of the government; the policy in this field seems mainly reactive. Various members of civil society confirmed that the sustainability of the Malaysian economy is deeply related to this illegal immigration. Malaysia, as with many countries of immigration, relies on foreign workers for the ‘3D jobs’ (Dirty, Dangerous and Difficult), often avoidedrejected by the Malaysian nationals.

From the late 1950s to the 1960s, undocumented migrants, predominantly from Indonesia, were silently welcomed as they belonged to the same racial stock and could be easily assimilated and integrated into the Malay community. This political motivation was later followed by economic necessities. In the 1970s, rapid development under the New Economic Policy (NEP) allowed for the absorption of a new wave of migrants, and by 1984, there was an estimated half a million migrant population in the country, all of whom were undocumented. The unofficial estimates were much higher at around one million.[13]

Their movement to Malaysia was also unrestricted. Since the 1980s, economic, social, and demographic changes in the region, consistent with accelerated globalisation, have deeply affected Indonesian labour migration to Malaysia. The destinations of Indonesian labour migrants currently overlap national boundaries to a far greater extent than before, and many more Indonesians have acquired the ability to move as free workers.

Despite the legal and administrative channels to employment in Malaysia, irregular migrants take high risks to be in irregular status for a variety of reasons. Unlike the employment of highly-skilled labour, legal recruitment of low-skilled labour involves several intermediaries in the sending and receiving countries to process their movement, raising their transactions costs of migration. In contrast, illegal employment is less time-consuming and uncooperative, and cheaper for both employers and migrants. In another view, it is obviously can be stated that the most migrant labour came to Malaysia as a legal workers, but after some time, the workers will be cheated by their agents or their employers, and finally the legal or documented workers will be become illegal.

Besides that, policies also tie foreign workers in legal status to a particular employer and location. Hence, foreign workers who prefer greater freedom and flexibility, and seek more opportunities to earn higher income resort to irregular migration. On the supply side, there is a ready secondary job market for irregular migrants. Despite severe sanctions against employers hiring irregular migrants, they continue to hire irregular migrants since they are cheaper and can be hired for shorter periods than warranted by the work permit. In addition, employers caught hiring irregular migrants are rarely punished, giving the impression that they are immune to the tough laws. Irregular migrants are likely to work in the informal sectors of the economy or in the remote parts of the country. They are also more open to exploitative working conditions and resort to crime when unemployed. They live in horrible housing conditions and are a source of highly contagious diseases.

As far as concerned, estimates of irregular migrant workers varied from as low as one million to as high as two million in the mid-1990s, depending on whether it is official or unofficial. The high incidence of irregular migration has been curbed to some extent through a combination of measures that include tough immigration and labour laws that penalize migrants as well as those hiring, harbouring or trafficking in irregular migrants, strict border and internal controls, regularization and amnesty programmes and bilateral engagement with host countries. Apprehended irregular migrants are either prosecuted and sentenced to imprisonment or placed in detention centres before being deported. The Malaysian government faces enormous problems in repatriating irregular migrants due to legal barriers and lack of administrative resources.

In overall, the goal of this project paper is to investigate the push and pull factors that have given a deep impact on labour exploitation, as in the case of Malaysia and Indonesia labour movement. Thus, Wallerstein’s concept of World System Theory will be used as a theoretical framework in this project. Significantly, Wallerstein’s concept did explain the exploitation of core on periphery, but this project paper tend to add his concept by emphasizing that in current context, labour exploitation did occur among the peripheries/ semi peripheries especially in the case between Malaysia and Indonesia. This paper also will briefly explain the level of exploitation among migrant labour in various sectors in Malaysia.

PROBLEM STATEMENT

This paper is mainly written to explain the relevance of Wallerstein’s concept of labour exploitation in current context. Thus, this paper illustrates the current situation of migrant labour in contemporary world system where they are being the subject of exploitation.Basically, in current situation, a large number of migrant laboursare going through a stage of exploitation. For instance, we can look at what is going on in Florida, where thousands of migrant farmworkers are being abused and can be regarded as modern slavery. Meanwhile, if we look at Dubai now, thousands of migrant construction workers mainly from South Asia are being exploited. More precisely, this paper mainly focuses on the level of exploitation among the Indonesia migrant labour in Malaysia in a variety of sectors especially plantation, construction, and the domestics. Beside, this paper will add to Wallerstein’s concept by stressing that labour exploitation did occur among the peripheries/ semi peripheries mainly because of the uneven development between them.

RESEARCH QUESTIONS

The research questions ask as follows:

1. Does International Law discriminate against international mobility of migrant labour?
2. Is Indonesian migrant labour being the subject of exploitation in Malaysia, and if it is true, in what sense are they being exploited?
3. What is the push and pull factors shaping Indonesian migrant labour exploitation in Malaysia?
4. What are the remedies taken or proposed?

OBJECTIVES OF THE STUDY

The main objectives of this study is as below:

1. To analyse the wallerstein’s theory of labour exploitation in the current context.
2. To determine whether Indonesian migrant labour in Malaysia being exploited or not.
3. To analyse the push and pull factors that persuade Indonesian migrant labour seeking job in Malaysia.
4. To suggest solutions and options to overcome the labour exploitation in Malaysia.

SIGNIFICANCE OF THE STUDY

This paper will precisely illustrate the difficulties that are being faced by the migrant labour according to the World System theory and specifically on the Indonesian migrant labour in Malaysia. Thus, the problem of what faced by the immigrant labour is not of a small scale, but are in a big and complex proportion. they all are facing a large problem that we should consider. The migrant labour are largely been exploited in many ways by capitalists. Therefore, this paper is trying to look into this matter more sharply and take into consideration on the exploitation among Indonesian migrant labour in Malaysia that shaped by the push and the pull factors causing the uneven development between the semi periphery that is Malaysia and the periphery that is Indonesia. So, this project paper tends to deepen the World System theory by putting a point that there is an uneven development going on between Malaysia and Indonesia that really shape the exploitation among the migrant labour from Indonesia.

SCOPE OF THE STUDY

The world can be perceived as a core and periphery dichotomy where core countries are characterized by high levels of development, a capacity at innovation and a merging of trade flows. The core has a level of dominance over the periphery which is reflected to flow of migrant labour to other countries. In a simple way, it is obvious that international relations are shaped by global inequality that is under the sphere of world system theory, core-periphery, and dependency theory. In specify, this paper will touch on the capitalist exploitation on migrant labour especially on the matter of Indonesian migrant labour in Malaysia. This paper also will touch on the different level of capitalist dependency between Indonesia and Malaysia that caused the dependency between the semi-periphery and periphery country that contribute to the flow of Indonesian migrant labour to Malaysia and how are being exploited mainly because of the uneven development and capitalist system.

LITERATURE REWIEW

There are few writers that have significantly pointed out their views on migrant labour on being a subject of exploitation in the current context. In Marxian political economy, exploitation refers to class exploitation, meaning to say the producer exploit the proletariat with low wages well below the actual amount of work done. The proletarian is forced to sell his or her labour power cheaping in order to survive. While the capitalist exploits the work performed by the proletarian by accumulating the surplus value of their labour. Therefore, the capitalist makes a living out of owning of the means of production and generating a big profit, which is really the product of the labour, the actual producers. Refer to the www.answers.com)

Sarah H. Paoletti. (2009), have pointed out that migrant labour can be found labouring in all industries and all socioeconomic levels across the world. But it is migrant workers both with lawful status and without-who are engaged in low wage employment defined in the international dialogue by 3 D’s – dirty, dangerous, and degrading. The writer has critically stated that there is a vast amount of exploitation among the migrant labour which are specifically from low skilled or unskilled jobs. In addition, the writer has taken the human rights perspectives.

In other perspective, Bach. R. L.,and Schraml. L.A. (1982), have stressed that the push and the pull factors are in a matter of fact shaping the labour exploitation. In this case, it is true that immigration results from push and pulls factors. It is tend to be said that the pushers can be famine, hurricanes, civil war, lack of jobs and drought meanwhile the pullers may be social stability, economic strength or real job possibilities.In this case, Bach and Schramltend to say that the migrations among people especially labour are being subjected by the push and the pull factors. Generally these scholars tend to agree that labour exploitation really takes place because of the push and pull factors.Meanwhile, Castles and Kosack (1973) advocate a Marxist interpretation of race relations, which arise essentially from the way in which the richer European nations have dominated and exploited poorer nations. It is useful to capitalism to have a reserve army of labour. Furthermore, migration favours the host country. The migrants are young, strong and healthy and have had their upbringing at the expense of their parent country. Thus, the host country has not had to pay for this. They regard “migration as a form of development aid for the migration countries” that acquires labour with little cost.

Besides, Claudia von Werlhof (2007), a well-known Professor of Women´s Studies at the Institute for Political Science, Department of Political Science and Sociology, University of Innsbruck, have put into consideration the “woman question” was addressed as a part of the wider social and ecological context. Generally, she intent was to explain how these phenomena could exist in the midst of alleged peace and democracy, which is a capitalist regime of wage labour, and allegedly ever increasing standards of living within industrialized nations what passes for “western civilization”. However, a look beyond the confines of the so-called “First World” expanded the question further on how was it possible that, despite its incorporation under”progress” and “development”, the so-called “Third World” remained characterized by underdevelopment and a lack of skilled labour.

Borjas (1999) has introduced the notion of a “global migration market”, where individuals nationally calculate the relative benefits of staying put as opposed to moving to one or another foreign destination. People migrate to places where the expected net returns over a given time period are greatest. But in this matter of fact, immigrant labour that goes to other countries have going through exploitation mainly because of the capitalist that conquer the labour. It is true that dependency have cost a lot of implication to the immigrant labour because the unbalanced and different level of dependency among core and periphery have definitely cause a nation state to send their labour to another countries. Borjasalso describes a more modern version and extension of the economic equilibrium approach to migration. He also shows that the self-selection of migrants on the basic of the unobserved abilities depends entirely on the extent of income inequality in the host and the source country. Usually international migration is rarely a free movement of people across borders, but usually strongly influenced by various physical and non-physical barriers.

A prominent scholar Samir Amin(1990) observed that workers at the periphery are been super-exploited because the differential of wages and incomes from non-wage labour in general is much higher than the differential of productivities and in which productivity increases that take place in developed nations are passed on to their workers in the form of higher wages and income, while most or all of the productivity increases that take place in developing nations are reflected in lower prices. In another perspective, B.N. Ghosh (2007), expressed that exploitation contributes to the generation of inequalities, and inequalities in many cases are responsible for exploitation. Ghosh’s view is sufficiently been revealed from the view of Mahatma Gandhi and he also strongly believed that capitalist development accentuates inequalities that lastly created the exploitation among people especially the labours. According to Ghosh from the political economy perspective, exploitation implies taking advantage of some people or situation to serve selfish interests without corresponding compensation to the exploited party. Thus, in this matter, his view is really on the point that the capitalist really exploited the labours especially on what is going through by Indonesian immigrant labour in Malaysia that is being exploited by the capitalist and because of the uneven development.

It is interesting to read the article of Thomas P. Rohlen (2002), on Cosmopolitan Cities and Nation States: Open Economics, Urban Dynamics, and Government in East Asia, have sufficiently explained that global capitalism in the new world system is shaping the urban agenda that he had mainly focused in East Asia countries such as Taipei, Japan, and Korea. In this article also, Thomas had explained that how a city which unable or unwilling to comply with the expectations and the standards of international capitalism are precisely look to be in a state of disadvantage. Its seems that capitalism in the world system did significantly became a force to give instruction to other states and this could bring about the stage of exploitation mainly among labours.

Meanwhile, Thomas R.S. (1989), from the economic point of view, pointed out that the additional supply of cheap labour helps to keep wages down. Capitalist exploitation may also make ideological use of migrant labour. It can justify exploitation of migrant workers on the grounds that they are racially inferior. Secondly, immigrants can be blamed for economic problems. Thirdly, racial prejudice divides the working population into segments and this prevents class consciousness from evolving. ImmanualWallerstein is sufficiently influenced by Marxism and links the concepts of nationalism and racism to the evolution of capitalism. He specifically argues that the international economy has developed into a world system in which the core areas (developed, first world countries) exploit peripheral areas (undeveloped countries).

Presumably, Wallestein once expressed that the division of labour prolong the system of peripheral exploitation and uneven development in the world system. He stressed the periphery produced cheap raw materials and agricultural commodities in exchange for core produced manufactured goods and prices for peripheral exports were low because producers invested relatively little in equipment and relied mostly on very cheap and unskilled labour. So, according to Thomas, the world system theory by Wallerstein has created three zones of the world-economy (Core, Periphery, and Semi-periphery) that are linked together in an exploitative relationship.

THE THEORETICAL BACKGROUND

Generally, the theoretical background of this paper will generally explained on migrant labour, the world system theory by Wallerstein, and the labour exploitation that shaped by push and pull factors. Thus, using the world system theory, this paper will generally agree to the theory and would add that there is an unbalanced dependency that is going on among the peripheries using the case between Malaysia and Indonesia.

RESEARCH METHODOLOGY

This paper will generally focus on class theory, journal archive, and library research methodology. Thus, this paper also will explain the push and pull factors that shape the labour exploitation and illustrates the Wallerstein’s World System theory.

CHAPTER 2

History of Indonesia-Malaysia relations as been shaped by migrant labour

Despite irregular dislikes at the government level since Malaysia’s independence in 1957, at the people to people level, Malaysia-Indonesia relations for the three decades since the 1950s can rightly be termed as generally warm and friendly, based on shared values for the majority stemming from religious beliefs and linguistic commonality, geographical closeness in the Malay Archipelago, as well as a common history and racial unity or serumpun. Frequent socio-cultural and academic interaction and exchanges, particularly amongst teachers and other educationists promoted a sense of understanding and kinship. In this context, members of the intellectuals or experts emerged as influential grassroots and national leaders, forging a strong spirit of companionship between the two nations. Hence, the intimate connections at the people to people level facilitated closer government to government ties, and enabled leaders to overcome initial political conflicts. In other words the people to people relations impacted upon and interconnected with government to government relations, rather than progressing in a parallel line.

Historically, Indonesia and Malaysia is in fact are neighbouring countries that have sufficiently when through many kind of agendas and issues involving both the countries. Indonesian labour migration to Malaysia has been an historical and on-going process. The second half of the nineteenth century was marked by trade liberalization in Europe and Southeast Asian states became colonies, protectorates or part of the informal empire of European powers. After 1870 the British assumed control over the whole of the Malay peninsula by bringing the Malay States under formal protectorate status between 1874 and 1914. At the same time, the Dutch took control over most of the island territory of the Malay Archipelago.[14]

In fact, Malaysia was integrated into world commodity and capital markets became the provider of resources for its colonizer and began to be in the manner through shortage of labour workers. The Malay administration thus sourced labour from outside countries including India and China. The Javanese was the third migrant labour stream which reflected the historical links in the Malay world. This was the first time that Malaysia was confronted with the problem of multi-ethnicity (Mantra, Ida Bagoes1999). During the colonial period, a liberal immigration policy was adopted, but the British viewed and treated Javanese migrants different from the other migrants from India and China since they were regarded as origination from the same racial stock as the Malays.

A pattern of differential treatment for migrants based on ethnicity was thus established, which was to have major implications for labour migration into Malaya after independence in 1957. The flow of Indonesian migrant workers to the Malaysian Peninsula experienced a sharp increase in the 1930s. The results of the 1950 Malaysian population census showed that there were 189,450 people born in the Island of Java, 62,200 people originated from South Kalimantan, 26,300 people from Sumatra, 24,000 people from the Island of Bawean (East Java), and 7,000 people from Sulawesi[15].

Simultaneously, the movement of Indonesian migrant workers to Malaysia declined during the War and also during the period of the confrontation between Indonesia and Malaysia. However, it increased again after the relationship between the Indonesian government and Malaysian Kingdom normalized.[16] From 1970s, Indonesian labour migration to Malaysia took place again, following the implementation of the New Economic Policy. The New Economic Policy, emphasizing public sector expansion and export-oriented industrialization, fostered the rural-urban migration and urban job-orientation of many Malays, thus creating labour shortage in certain sectors such as construction industry, low-paid service and rural area. The Malaysian government thus pursued a proactive policy to recruit foreign migrant workers, mainly from Indonesia but also from Bangladesh, Myanmar and the Philippines.

Asbothcountriesexperiencedrapideconomic transformation and political developments, Malaysia’s people-to-peopleandgovernmenttieswith its most important ASEAN neighbour, Indonesia, have certainly at times come under pressure. In effect, Malaysia’s so-called special relations with Indonesia largely based on the idea of serumpun – have been tested time and again at both levels of interaction and in different ways in each country.

MajorsocioeconomictransformationofMalaysiaunderTunMahathirMohammad in most of the 1980s and 1990s witnessed a significant rise in the number of foreign workers, particularly from Indonesia, and in a variety of sectors. With their reputation as being hardworking and willingness to work long hours, Indonesian male workers were most sought after in the construction and plantation sectors.

Meanwhile,youngIndonesian women were recruited as domestic maids or restaurant workers and even as factory labour. This subsequently led to a relatively unrestricted policy towards Indonesian immigration. However, due to massive undercover immigration, rising popular dissent towards immigrant labour, the Asian economic crisis of 1997-98, and the less privileged position of the Indonesians in terms of being without proper documentation for identification, public discourse has changed. Shifting from the liberal immigration policies from the 1960s to 1980s to the recent strict regulation and immigration quotas towards Indonesians, the attitude of the Malaysian government and public has been to maintaining the multi-racial and multi-cultural character of the nation. [17]

In addition, the Malaysian perception of Indonesians has been further tainted by revelations of numbers of Indonesian women abusing their tourist’s visas to work as prostitutes in Malaysia, perhaps demonstrating that it is class and not ethnicity or nationalism as a factor contributing to frictions in Malaysia-Indonesia bilateral ties. Malaysian perception of Indonesia at the micro-level, amongst the general population imaginative by official courtesy and diplomatic ritual, is generally coloured by the level of inter action with Indonesian migrant workers, particularly household maids and construction workers. Here, it is important to recognise that Indonesians migrant workers fill the 3-D (dirty, dangerous and demeaning) jobs that are on the whole ignored by the locals.

It could thus be argued therefore that the role which these Indonesians have assumed on the basis of ‘purchasing power parity’ (PPP) between the two countries alongside income per capita has inevitably relegated them to a secondary status in the ‘social ladder’. The nationality factor that Indonesians are foreigners though not so regarded if seen from the ethnicity factor would count in to ‘aggravate’ the social level. It has to be noted too that Malaysia has been accustomed to Indonesians coming to Malaysia to do unskilled or lowly qualified jobs.[18]

In contrast, Indonesia today is not known for exporting engineers and doctors to Malaysia, although there are such professionals working in Malaysia and also in the other parts of the world. Thus, the ‘superior-subordinate’ and ’employer-employee’ relationship has tended to aggravate feelings of negativity among Malaysians toward Indonesians. Problem of crime committed by Indonesians from time to time such as robbery have not helped to reduce ill-feelings and a sense of distrust. Unfortunately, there are cases where Malaysians cannot or do not care to distinguish between Indonesian tourists or students, for example, and the migrant labours.

Though attention has been given to relationship between the Malaysian employer and Indonesian employee, it is important to recognise that non-government organisations (NGOs) either from Indonesia or Malaysia are also a third component in this paradigm. Most NGOs, such as the Indonesian Association for Migrant Workers Sovereignty or Migrant CARE, are openly concerned with the plight of the migrant workers and in this case the domestic workers or maids, whereas local agencies, such as Persatuan Agensi Pembantu Rumah Asing Malaysia (PAPA), TENAGANITA, Migrant Worker’s Organisation, CARAM ASIA, Malaysian Trades Union Congress (MTUC), and Suaram is the main bodies that have put their sharp eye on grievances among migrant labour.

As already mentioned, one of the foremost sources of controversy in Malaysia Indonesia bilateral relations is on the issue of Indonesian maids or domestic help in Malaysia. It could be said that this issue singularly typifies the grievances between Indonesia and Malaysia over the issue of immigrant workers and is a potent factor in reinforcing the negative images of each nation in their respective mass media. Indonesian household maids are part of the broader category of Indonesian migrant labour, tenaga kerja Indonesia (TKI), and though distinguishable as a sub-set is clearly not separable.

An unrestricted media with sensational reporting has undoubtedly negatively impacted upon Malaysia-Indonesia relations. Issues relating to bilateral relations which were once a political forbidden under the Suharto era could now be openly discussed in the mass media with impunity. Thus, many Malaysians consider that certain issues including the TKI, territorial disputes, cultural and heritage property rights have been grossly exaggerated by the Indonesia media and a certain nationalistic style of reporting has stoked anti-Malaysian feelings amongst the Indonesian people, or rakyat. For example, one contentious issue of national identity concerns elements of Indonesian culture such as the folk song Rasa Sayang and the barongan dance, which the Indonesian media have alleged have been hijacked and wrongfully claimed as Malaysian.[19]

Border sovereignty and territorial disputes such as the competing claims over the islands of Ligitan and Sipadan off the Sabah-Kalimantan coast is also part of the dominant discourse. Especially explosive was the claim of ownership of the Ambalat island off northern Kalimantan and which led to the recruitment of Konfrantasi volunteer militias across Indonesia, indicative of the 1963 Ganyang Malaysia campaign.[20]

Particularly provocative has been the mass media coverage of the treatment of Indonesian migrant labour in Malaysia and especially cases of ill treatment of Indonesian maids by their Malaysian employers. The somewhat sensational depiction of Malaysian employers melting out inhumane treatment to their Indonesian employees gave the impression that by extension the broader Malaysian society including organisations such as the volunteer force of Ikatan Relawan Rakyat Malaysia (RELA) and Polis DiRaja Malaysia (Royal Malaysian Police Force) were in some way complicit.

The combative position adopted by the Indonesian media reflected in a number of angry headlines have provoked massive rallies and demonstrations in Indonesia, including one in front of the Malaysian Embassy in Jakarta, and have led to a further worsening of the relations between both countries. The Malaysian media is equally guilty of generating ill feeling in its portrayal of negative stereotypes of Indonesian workers in Malaysia. The temptation to encourage negative aspects of nationalism is confined to the Indonesian media, with its Malaysian press all too ready to focus on cases of misbehaviour amongst the migrant worker population. However, it must be asserted that the Malaysian media has been generally more restrained and had fewer tendencies to sensationalise such incidents and has more readily offered balanced coverage on the mistreatment of Indonesian workers.[21]

Consequently, the degree of the confrontation and issues involving the both government have led to a serious conditions after the incident of “buluh runcing” that lead by a group of people that demonstrated by using the slogan of “Sweeping Malaysia”. Meanwhile, both governments tend to solve the issue in a diplomatic manner. Thus, all this things and issues precisely related to the Indonesian migrant labour.

CHAPTER 3

Unbalanced Peripheries

At the dawn of the 20th century large colonial powers had fixed up the world between themselves. Precisely, the ‘Core’ zones were marked by their level of economic development and the ‘peripheral’ zones have been marked by their level of economic underdevelopment. The political organization of economic dependencies in the form of colonies and semi-colonies was established by a small number of nation-states. This domination of the periphery by the core nations is known as Imperialism. Imperialism in this overt political form, with directly administered peripheral zones is a salient feature of the first half of the 20th century. By the second half of the 20th century there began a process of decolonisation, whereby the direct political control of peripheral zones became problematic and untenable because of increasing political opposition in the form of national-liberation movements. But in this new era, essentially what is new is capitalism, and capitalist nation-states, coming to cover the whole globe and relate to each other essentially through market mechanisms.

Immanuel Wallerstein, a leading advocate of the approach, uses the same terminology. He have characterizes the world system as a set of mechanisms which redistributes resources from the periphery to the core. In his terminology, the core is the developed, industrialized, democratic part of the world, and the periphery is the underdeveloped, raw materials-exporting, poor part of the world; the market being the means by which the core exploits the periphery. The capitalism enterprises try to seek suitable investment places relatively lower cost, and more profit to solidify and sustain the capital production structure. They are unsatisfied with exploiting the workers in their motherland where the labour cost is relatively high. By contrast, in developing countries large quantities of labours are starving for their “kind” offering a job. Exploiting the abundant labour in developing countries is a new profitable venture, at least in a relative not short time. The power of capital revived and expanded in the age of globalization.

Wallerstein traces the origin of today’s world-system to the 16th century in Western Europe, and defines it as:

“…a social system, one that has boundaries, structures, member groups, rules of legitimation, and coherence. Its life is made up of the conflicting forces which hold it together by tension and tear it apart as each group seeks eternally to remold it to its advantage. It has the characteristics of an organism, in that it has a life-span over which its characteristics change in some respects and remain stable in others. One can define its structures as being at different times strong or weak in terms of the internal logic of its functioning.”[22]

Significantly, in analysing the concept or approach of World System theory, the structure of the system should be made clear. According to Wallerstein, as we all acknowledged that he had subsequently admitted that the world system is divided into three phase (core, periphery, semi-periphery). Thus, in a matter of fact, the core countries without any question have greater economic and political and military power as well for example the United States, Europe, and Japan. Meanwhile, the peripheral countries are poor and look to be in a week state that is mostly the countries in Asia, Africa, and Latin America. Apart from that, phase in between the core and periphery that is the semi-periphery has the intermediate levels that acts as middle stage countries.

In a broad view of sense, it is quite not astonishing to hear that there is an unbalanced going on throughout the world. Countries are separated by different kind of cultural, political, religions, and so on. But, it is really hard to distinguish the state of peripheries. There are so many questions occurred on how the states of peripheries still manage to survive in this era of modern world system. Although the peripheries are striving to pull their way out of grievances, they are still being under the dominant of the core and also the capitalist system. Although the World Systems theory have adopted the unbalanced or inequality among the core and peripheries in this period of time, but this paper precisely stressed towards the addition of the world system theory where there is also an unbalanced going on between the peripheries itself.

Across the region, labour migration issues have figured prominently in the agenda of affected countries. Conceptually, countries can be classified into two groups that is labour sending countries and labour receiving countries. Since the crisis, labour-sending countries intensified their search for labour markets overseas as a way to cope with the growing unemployment and social problems that the crisis caused. Conversely, labour receiving countries immediately began to impose controls on migration through such means as freezing the recruitment of foreign labour, increasing surveillance and border controls, and even repatriating migrant labour already within the country. The apparent policy conflict between labour sending and labour receiving countries magnified the already lengthen the migration issue in the region. This is surely what can be referred and related to two peripheries countries that are Malaysia and Indonesia.

In a matter of fact, Malaysia tend to the in the semi-periphery stage accordingly by world system theory. Malaysia has experienced successful economic growth over recent decades. Since 2006 and in the context of Vision2020 national program which aims to propel the country towards a developed nation by the year 2020, the government is implementing the Ninth Malaysia Plan (2006- 2010): a five year development program to address economic, social and cultural challenges. With its gross domestic product (GDP) estimated to be increasing by an average of 5,2% per year since the regional economic crisis in 1997-1998, Malaysia is fast on the way to becoming an industrialised nation. To assume this economic expansion, the country is having recourse to a 3 million additional workforce to the locally available labour market.

Significantly, Malaysia has developed a structural reliance on migrant labour. The amount of migrant workers is among the approximately 3 million migrant workers (in a total workforce of 11 million) and also there are some 800,000 undocumented workers. About half the registered foreign workers in Malaysia are from Indonesia, and about 300,000 Indonesian women work as domestic helpers. Some estimates are the 80,000 undocumented domestic workers. Malaysia also exports workers: about 10-12% of the approximately 300,000 Malaysian foreign workers in Singapore are expected to be retrenched.[23]

Meanwhile, in other way round, Malaysia has the distinction of being the country with the worst income disparity in Southeast Asia, according to a United Nations report. The latest United Nations Human Development Report 2004 shows the richest 10 per cent in Malaysia controls 38.4 per cent of the country’s economic income as compared to the poorest 10 per cent controlling 1.7 per cent.

Presumably, Malaysia, which has the largest gap between rich and the poor in Southeast Asia, where the top 10 per cent is 22.1 times richer than the poorest 10 per cent. Malaysia’s income gap is higher than Philippines (16.5), Thailand (13.4), Indonesia (7.8) and Vietnam (8.4). Thus, in late 2005 when The Education Minister revealed that out of 4,036 national schools, 794 were without electricity, and 1,555 without toilet facilities. This situation has been strongly condemned by many people including from the opposition parties. According to the report, 10 per cent in Malaysia earn 22 times more than the poorest 10 per cent, meanwhile, the Richest 10 per cent in Malaysia controls 38.4 per cent of the country’s economic income as compared to the poorest 10 per cent controlling 1.7 per cent.

Simultaneously, in 2001, the government was forced to revise downwards its economic growth forecast for a second time from 2.0 to 1.0 percent, citing the “greater than expected” slowdown in the world economy. According to figures released by the Human Resources department in November 2001, electronic and electrical components manufacturers across the country reduced 37,000 workers on the particular year. Meanwhile, the electrical and electronic goods comprise over 60 percent of Malaysia’s exports and with almost 21 percent of all exported goods going to America. Malaysia is highly vulnerable to the US economic slowdown.

Besides the economic growth, Malaysia is still losing its momentum in the matter or corruption. It seems that there has been no improvement in the perception of corruption in Malaysia since 2001 despite the many promises by authorities to stamp out graft and bribery. At the unveiling of the 2008 Corruption Perception Index, which measures the level of corruption taking place in a country, Malaysia scored 5.1 last year. The mediocre score is little different from the 4.9 to 5.1 range it has been overlapping since 2001.

In a statement, the Transparency International (Malaysia) president Ramon Navaratnam. Navaratnam have referred Singapore, which topped the list in South East Asia with a score of 9.1. Overall, the island state was placed fourth among 180 countries assessed. By comparison, Malaysia came out 47th in the overall list, compared to 36th placing it secured in 2001 when the index had surveyed only 91 countries.

However, if we looked at table 2, it shows that Malaysia still managed to stay above other regional neighbours such as Thailand (3.5), Vietnam (2.7), Indonesia (2.6), the Philippines (2.3), Cambodia (1.8) and Burma (1.3).

In Malaysia, the official definition of poverty is income-based and households whose incomes are below the poverty line of RM460 per month are classified as poor. The hard-core poor are those households whose income is less than half of the above figure. Based on the findings of the Household Income and Expenditure Survey 1997, it can be concluded that the incidence of poverty in Malaysia declined till 1997. This decline was in both urban and rural areas, albeit at different rates. Similarly, the survey also indicated that the incidence of hardcore poverty had declined (see Table 3).

In terms of income distribution, the rapid economic growth experienced by the country during the boom period of 1990-97 increased the disparity in income distribution, with growth benefiting the top 20 per cent of the population (mainly urban households) more than the bottom 40 per cent (mainly rural households). In 1998, mean household income in urban areas, and of the top 20 per cent of households fell slightly. Concurrently, income from the agricultural sector grew at a faster rate than 1997 owing to higher prices for palm oil and increased production of food crops in response to higher import costs. Thus, the mean income of the bottom 40 per cent of households, especially in the rural areas, remained stable owing to their ability to diversify their sources of income. Consequently, the urban-rural income imbalance and overall income inequality improved slightly in 1998, thereby reducing the widening gap experienced during 1996-1997 (EPU 1999).

In the past, it has been precisely stated that it was Malaysia’s relatively better economic and political performance and prospects compared to certain other countries in the region that provided the impetus for inflows of foreign nationals into the country. It is no other surprise then that countries with a higher standard of living, (as measured by per capita GNP) are generally also labour receiving countries. The global financial crisis affected countries in the region to different degrees, with Indonesia, Thailand and South Korea being the worst hit, followed by Malaysia and the Philippines. Singapore and Taiwan remained relatively unharmed. Thus, the division between labour sending and receiving countries remained much the same as in pre-crisis times, since the relative performance and prospects of economies determines migration patterns.

The crisis, in fact, increased job and income inequities between countries in the region, especially Indonesia and Thailand, which in turn increased incentives for nationals of these countries to migrate to Malaysia. Southeast Asia’s biggest economy is buck on many investors radar screens this year, mainly because of the combination of greater political stability, strong economic growth, better security, which all that have lifted its appeal relative to its neighbours. Jakarta hasn’t enjoyed that sort of euphoria for more than a decade, largely because it had to deal with the aftermath of the Asian financial crisis and also the political turmoil following the removal of the autocratic former President Suharto. The renewed appeal, owes much to President Susilo Bambang Yudhoyono, who was elected in 2004 on promises to tackle the problems involving Indonesia.

At once, Indonesia’s unemployment rate increased in a large percentage. According to BPS (2007), the Central Office of Statistics Indonesia, more than 10.5 million Indonesians are seeking work. Neither under-qualification for labour nor discouragement is to blame for this high unemployment, but rather the low productive investment rate and unhealthy investment climate. Facing the 9.75% unemployment rate and increasing poverty, Indonesia’s government has tried to develop the potential of TKI (Indonesian Migrant Worker) programme seriously since 2004. TKI programme contributes around half a million occupations per year. Indonesian government registered a substantial rate of foreign income from this sector. While there have been massive job losses, there are differing reports on the impacts on migrant workers. Faced with the increasing likelihood of poor employment prospects at home, laid off documented workers may move into irregular status to accept precarious work in the host country. In addition, in the face of rising male unemployment or underemployment, more women are seeking work in foreign countries.[24]

Indonesia is expected to avoid the recession and turmoil that engulfed the country a decade ago during the Asian financial crisis and is expected to fare better than other Asian economies, due in part to the “closeness” of the economy (exports represent around 30 per cent of the GDP, a low figure compared to many East and South-East Asian economies), which tends to shelter the country from a volatile global environment.

The crisis, however, had more severe effects in Indonesia than in any other country in the region. Indonesia’s real GDP fell by 13.1 per cent in 1998 (18 per cent through-the-year to December 1998, see Chart 1) as bank failures, capital flight and disorder took hold in the financial sector. The investment environment deteriorated to such an extent that Indonesia’s modern, labour-intensive manufacturing sector was severely undermined. During the decades leading up to the 1997-1998 Asian financial crisis, Indonesia shared in the sustained economic growth that was enjoyed by much of East Asia. Real annual GDP growth averaged 7.2 per cent from 1977 to 1996, lifting 30 million Indonesians out of poverty over this period.

Prospects for economic growth in 2009 are even dimmer, with growth projections ranging from 3.7 per cent to 5.0 per cent. The Government expects 2 million existing jobs to be lost in 2009 as a consequence of slowing external demand, and is seeking to create 2.6 million new jobs, 600,000 of which through overseas placement. The latest labour force survey conducted in August 2008 indicates that Indonesia had a labour force of 112 million, of which 9.4 million were unemployed. Another 14.9 million persons were involuntarily underemployed on a time related basis.[25]

Indonesia has a complex and fragmented labour market. It has a low-wage economy with significant disparities between the wages paid to expatriates and high-skilled local professionals employed by multi-national corporations and agencies and those paid to civil servants and employees of local companies. There are also considerable discrepancies between the wages of managerial staff and low level employees within companies. These wage levels are far below those that can be earned by even the worst-paid of overseas migrant workers.

Meanwhile, Indonesia has a market-based economy in which the government plays a significant role. It owns more than 164 state enterprises and administers prices of several basic goods, including fuel, rice, and electricity. Manufacturing accounts for 28percent of Indonesia’s gross domestic product (GDP), services 41 per cent and agriculture 15percent (agriculture employs over 40 per cent of the labour force). Crude oil and natural gas are Indonesia’s most valuable natural resources and have long been its major source of export revenue, but growth in domestic oil demand, together with declines in production since the 1990s, contributed to the nation becoming a net importer of oil in 2004 and 2005.[26]

So, we accordingly can see that there is an unbalanced development