January 8, 2008EconomyForeign AffairsimmigrationIndiaMalaysiapoliticsSecuritytrade

Look East, and frown at Malaysia

Malaysia has the right to decide its own immigration policy. And India has the right to react

This is an archived blog post from The Acorn.

Update: Malaysia clarifies that there is no ban on Indian workers

It is laughable. A day after the Indian defence minister completes his trip to Malaysia, that country announces a ban on the intake of workers from India. Existing workers will be asked to return to India after their work permits expire. The Malaysian government took this decision—it claims—in late December 2007. It probably held back the announcement to ensure A K Antony’s visit took place. Yet, the timing of the announcement—a day after India agreed to train Malaysian air force pilots, among other things—should be embarassing for Mr Antony.

The Malaysian government took this decision—in all likelihood—as part of its clampdown on the movement among its ethnic Indian minority, who are demanding an end to systematic racial discrimination. The manner in which it treats its citizens is entirely its own business. But if Malaysia has the right to decide its own immigration policies, the ban adversely affects Indian nationals. For that reason, the Indian government must respond.

The ban on immigrant workers has become an additional sore point in India-Malaysia economic relations, the most visible of which was Malaysia’s holding up of an India-ASEAN preferential trade agreement blaming India’s customs duties on the import of palm oil. And even if Mr Antony and his Malaysian counterpart, Najib Razak, have announced an elevation’ of defence co-operation, Kuala Lumpur has been less enthusiastic on India’s involvement in securing the Malacca straits.

How should India respond? The Indian government must issue a strong protest at this discriminatory policy targeted against its citizens. And if Kuala Lumpur persists with the ban, then India should consider economic retaliation. It could begin by announcing that New Delhi cannot contemplate reduction in import duties for palm oil until such time Malaysia lifts the ban. (Could this be a calculated move by Malaysia to get India to drop its import duties? Unlikely. But even if so, dropping import duties is not at all a bad thing for India).

India could also threaten to disqualify Malaysian companies from participating in government tenders, especially for large infrastructure projects. Indeed, in any case, India would do well to insist on reciprocity in the award of government tenders, for Malaysia has a questionable record on this. In 2003, the Malaysian government awarded a letter of intent to IRCON, India’s government-owned railway construction company. Due to reasons concerning its domestic politics, the government then went on to award the project to a local company. It has now awarded another US$1 billion rail project to IRCON. It should be encouraged to avoid a repeat of its previous performance.

The Malaysian government, through this ban, has internationalised what was previously its own internal affairs. This is both uncalled for and unfortunate. India’s response should be measured, calibrated and yes, purposeful.


— It gets even more laughable and confusing. Samy Vellu, a Malaysian cabinet minister is in India for a conference on overseas Indians. And he has denied that there is such a ban. One wonders how many Malaysian cabinet ministers by the name of Samy Vellu are attending that conference in New Delhi, because a Samy Vellu is quoted as telling Reuters that The government decided it is enough and we don’t want to recruit any more because we have enough workers. Is it wrong?” That begs the question: why ban only Indian and Bangladeshi workers?

— Mr Samy Vellu now says, The statement that has come in Reuters is not true; there is no ban”. But when asked whether Malaysia would still welcome Indian workers he said, When it is needed, the workers are welcome.”

*Malaysia on Wednesday said there never was a move to suspend or stop intake of workers from India. Nor was it seeking to limit the flow of professionals into its information technology sector and other specialty areas.

Making a statement to clear the air” following some reports (not in The Hindu) about such a freeze, Home Minister Mohd Radzi Sheikh Ahmad said: Let me categorically state that the Ministry of Home Affairs has never come up with any sort of ruling or circulars to say that we are stopping [and] we have stopped taking foreign workers from India, what more, those people who are professionals.” [The Hindu]

If you would like to share or comment on this, please discuss it on my GitHub Previous
Give ’em Kashmir, for stability’s sake
How the rural employment guarantee might cause inflation

© Copyright 2003-2024. Nitin Pai. All Rights Reserved.