Overhauling Foreign Labor: Malaysia aims to cut costs, abuse of system

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02:47

Malaysia is scrapping or reviewing its agreements that allow in millions of workers from other countries. Employers and activists are praising the move, saying the system is corrupt and prone to trafficking. Rian Maelzer reports many workers, especially from Bangladesh, end up racking up huge debts just to reach Malaysia.

As many as four million foreigners from countries such as Indonesia, Bangladesh and Nepal work in Malaysia's factories, plantations and construction sites. And many, like these young men from Bangladesh, had to pay dearly for the chance to do so.

MUHAMMAD AMINUN ISLAM BANGLADESHI WORKER "To come to Malaysia I had to spend $5000. I took a $3750 loan from the bank at a high interest rate, and the rest was personal loans provided by my friends and family."

Until recently, just 10 agencies linked to well-connected people in Bangladesh and Malaysia held a monopoly on recruitment of workers from that country. That drove up costs and resulted in what many see as a form of debt bondage.

RIAN MAELZER KUALA LUMPUR "Malaysia's new government is keen to completely overhaul the system, and has been holding town hall meetings around the country to get feedback on how to make it fairer to the workers, less costly to employers and less prone to corruption."

SHAMSUDDIN BARDAN, EXECUTIVE DIRECTOR MALAYSIAN EMPLOYERS' FEDERATION "As employers, we are very excited by the new arrangement made by the government and also the appointment of the independent committee to study the recruitment and cost of bringing in foreign workers because this is something that we have been calling for a long long time."

Both employers and migrant rights activists want to see the middlemen cut out completely to be replaced with direct government-to-government deals. But whatever changes Malaysia's government introduces it won't ease the burden on the workers who are already here.

MUHAMMAD AMINUN ISLAM BANGLADESHI WORKER "To pay back all the money I will have to work hard and I will always be worried. This big responsibility is causing me a lot of tension."

Aminun earns only about $360 a month working seven days a week. And given their debts, foreign workers like him often have to toil for years before they can start helping their families financially or saving any money, the whole purpose of coming to Malaysia in the first place. Rian Maelzer, CGTN, Kuala Lumpur.