chapter  11
25 Pages

PROSPERITY AT A PRICE: REGULATION OF ORGANIZED LABOUR IN MALAYSIA

ByJesse Wu Min Aun 289

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PROSPERITY AT A PRICE: REGULATION OF ORGANIZED LABOUR IN MALAYSIA

reported, for instance, that a US company, KOMAG Inc., is so eager to tap the cheap Malaysian work force that it is shutting two plants near its headquarters in San Jose, California, and re-locating all of its production to Malaysia. The maker of parts for computer disk drives says the move will slash payroll costs by 67 per cent, or US$80 million (S$134 million) a year. While Malaysia became something of a pariah in international financial markets because of slapping controls on capital flows in September 1998, it is now quietly luring more. foreign investors li~e KOMA? to make their ~roducts in Penang and even m the town of Kuchmg, on the Island of Borneo: The country's move to peg its currency, the ringgit, at 3.8 to the US dollar, appears to be the key motivation for the foreign investors; it has made Malaysia one of the cheapest places in the region to make almost anything.4 The cost of workers, land, and buildings has fallen, relative to its neighbours - effectively giving Malaysia a competitive advantage compared with countries such as Thailand and the Philippines, where currencies have strengthened.