Malaysia's abrupt policy about-turn this week, allowing the hiring of Indonesian construction workers two weeks after harsh immigration laws took effect, shows just how much the country relies on foreign workers.

Even Malaysian officials themselves probably did not realise the extent of this dependence, built over the decades that the country has been a magnet for migrant workers from South-east and South Asia, from countries like Indonesia to Bangladesh.

Up until the crackdown, illegal Indonesian immigrants made up 70 percent of the building industry's 500,000 foreign workers.

In the end, the uproar from the construction industry, not to mention economic side effects from its downturn, got the Malaysian government to lift the ban on Indonesian construction workers on Thursday.

The absence of foreign workers is also being felt in other aspects of daily life. Cleaning services and disposal of garbage — work that many Malaysians now shun — have also been disrupted, some say.

''Politicians and the government don't know how structured and embedded is the employment of foreign workers in various sectors and levels,'' said Irene Fernandez, director of the non-government Tenaganita, which works with migrant workers.

"'This is the initial caving in, but it will follow for other sectors soon,'' she explained.

The plantation industry, a key factor in Malaysia's exports, is pushing to be allowed to take in Bangladeshi workers. The manufacturing sector, especially small and medium enterprises, is also saying it needs to be able to have foreign workers, who normally get lower wages.

Local media reports last Friday said that companies in the non-export manufacturing sector wanting to employ foreign workers must meet new rules — they must hire one Malaysian for every foreign national they hire.

Previous to this, only export-based manufacturing firms were allowed to hire foreigners.

Mass exodus

The demand from the construction and other sectors for a lifting or relaxing of new restrictions on hiring foreign labour comes soon after August 1, when harsh immigration laws took effect and fueled a mass exodus of illegal foreign workers.

The latest clampdowns are Malaysia's newest attempts at curbing the numbers of foreign workers in the country, since it had undertaken earlier efforts in the aftermath of the 1997 Asian economic crisis.

Under the latest amended immigration laws, illegal workers and those who harbour them are liable to be caned up to six strokes in addition to a jail term or fine or both.

But just weeks after the new law took effect, deputy premier Abdullah Ahmad Badawi said that employers in the construction industry would be allowed to recruit Indonesian workers with immediate effect.

The construction industry has been reeling from severe labour shortages since February, when employers were stopped from hiring new Indonesian workers. Builders faced fresh disruptions after 300,000 illegal workers, many of them Indonesian construction workers, fled the country before the end of a five-month amnesty on Jul. 31.

''We have taken special measures to address this problem and decided to allow Indonesian workers to be recruited in the construction sector,'' said Abdullah.

But while giving in to the calls of local industry because of economic needs, the government is not about to ease its crackdown on foreign labour — and is actually in the midst of going after the remaining illegal workers in the country.

In Penang, for instance, a magistrate sentenced 27-year-old Nor Hassan, from East Java in Indonesia, to a year's jail and one stroke of a thick rattan cane, after he pleaded guilty to overstaying.

He was found at a construction site on August 1 and had been staying illegally in Malaysia for almost a year.

Another six illegals were sentenced in Klang, Selangor, to three years' jail and three strokes of the cane. Dozens more have been arrested, charged and sentenced.

Hundreds of Indonesian workers, who make up the bulk of Malaysia's foreign workers, are stranded in Malaysia, avoiding the authorities and waiting to be repatriated. Up until recently, there were more than one million foreign workers in the country, although the figure was much higher if illegals were counted.

Easily exploitable

The caning of workers has provoked anger in Indonesia.

"All right, the Malaysian government has the right to impose punishment in its own country. But that does not mean Indonesian workers can be caned and treated like criminals,'' Irham Buana Nasution, director of the Medan branch of the Legal Aid Institute, was quoted as saying in the Jakarta Post .

Indonesians are also sore because they say that a good part of the Malaysian economy, literally, has been built by Indonesians who take up construction work — Malaysians either shun these jobs or expect higher wages for the demanding, often high-risk work.

On average, an Indonesian construction worker is paid RM800 to RM900 per month, says a Penang-based property developer.

A Malaysian semi-skilled worker, on the other hand, would cost more than RM1,000 per month , he adds.

Construction work has already ground to a halt in some sites. He says companies want to get Indonesians because they are perceived to be more skilled at construction work.

The bulk of the foreign workers hired by construction firms were already in the country, he says. ''Most of them were illegal. Even the legal ones, we are not sure if they are really legal. We do not undertake importing workers.''

Indonesian workers are also seen to be less prone to complain about their usually pathetic accommodations. There are also fewer language and cultural barriers, since Indonesia and Malaysia are neighbours and their languages are close to each other.

More significantly, illegal workers are easily exploitable, activists say.

'Reactionary' policies

The ban on Indonesian construction workers was actually imposed in February after several workers were blamed for two riots, but the July 31 deadline for illegals to leave the country made the labour shortage problem an acute one.

In February, the government had said that it would limit Indonesians to being employed only as domestic workers and plantation labourers.

Construction industry officials now say that they need 400,000 workers and that it will take up to six months to get back to normal, even with the admission of Indonesian workers.

Tenaganita's Fernandez says Malaysia's reversal of its hardline position reflects ''reactionary'' policies.

''They (policy makers) have no kind of analysis before decisions are made,'' she says, adding that the role and contribution of foreign workers in the country badly needs comprehensive study. — IPS