Malaysia Launching Another Crackdown On Illegal Immigrants

Updated on

The Malaysian population is growing restless, and as is often the case, when tensions mount people look for others to blame (both rightfully and wrongly). While Malaysia has enjoyed decades of sustained growth, tensions are mounting as living costs rise and middle and working class Malaysians are seeing wages stagnate. In recent months, the government has begun to crack down on illegal immigrants, which are a hot-button issue for many Malaysians.

As is often the case, immigrants tend to move to richer countries in search of higher paying employment opportunities. And employers eager to save cash on labor are often happy to employ illegal immigrants. While people in North America and Europe may think of this as a “first world” issue, Malaysia and other middle income countries are dealing with a similar situation.

Immigrants have been flooding into Malaysia

Malaysia is one of the wealthiest countries in South East Asia, trailing only fully-developed Singapore. While Malaysia’s nominal per capital income of $10,300 dollars is low by Western standards, it is far higher than many neighboring countries. In Indonesia, for example, the average person earns only $3,600, while in Nepal the average income is less than $700 dollars.

Two years ago the Malaysian government launched an amnesty program which allowed people to register with the government and seek legal recognition. Under the program, however, the government reserved the right to “voluntarily” deport anyone who went in for further processing.

Of the 1.3 million people who signed up for the amnesty program, some 330,000 people were deported.  These individuals were also permanently banned from entering the country. Another 500,000 were given visas, while the status of other immigrants remains unknown. That program, however, is now coming to an end and the government has announced plans to begin rounding up and deporting illegal immigrants.

So far, comments from the government suggest that businesses will also be pursued and fined once the amnesty program official ends. According to the government, businesses have had enough time to either apply for visas or find local Malaysians to complete the work. An employer faces a fine up to RM 50,000 (USD 15,000) and one year in jail for each illegal employee.

Mixed support for immigrants

Most illegal immigrants work in fields that local Malaysians themselves do not want to work in. Most immigrants are employed as servers at cheap restaurants, in construction, on plantations, and in other low pay manual labor jobs. Supporters for illegal immigrants argue that these workers keep food and construction costs low, and free up Malaysian citizens to do higher value work.

Critics, however, argue that immigrant workers suppress wages, contribute to higher crime rates, and stress public services, such as government supported hospitals. There are believed to be about 2 million illegal immigrants in Malaysia. Many of the immigrants live in East Malaysia, a region which shares an island with Indonesia.

In the capital city of Kuala Lumpur, however, illegal immigrants can be found just about everywhere, providing much of the manual labor needed to keep restaurants and other businesses open. With the government aiming to deport at least 400,000 immigrants, the potential for disrupting daily life could rise.

Given the high levels of corruption in Malaysia, the actual enforcement of immigration policies is questionable. It’s possible that police officers and enforcement agents will simply be paid off by businesses. Given the amount of pressure the government has come under in recent months, however, the crackdown on illegal immigrants may be more strict than in the past.

Either way, the issue could become contentious in the coming months, no matter what move the government makes. If enforcement is lacking, the government could be accused of being inept and corrupt. If the policy is actually enforced, however, it could disrupt daily life and could even cause living costs to rise over the long run.

Leave a Comment

Signup to ValueWalk!

Get the latest posts on what's happening in the hedge fund and investing world sent straight to your inbox! 
This is information you won't get anywhere else!