The Role of Ethnicity in Employee Relations: The Case of Malaysia

Chris Rowley* and Mhinder Bhopal**

(all correspondence)
* Faculty of Management
Cass Business School
City University
106 Bunhill Row
London
EC1Y 8TZ
UK
c.rowley@city.ac.uk

** The Business School

London Metropolitan University
Stapleton House
277-81 Holloway Road
London
N7 8HN
UK
m.bhopal@unl.ac.uk

Key Words: Malaysia, Employee Relations, Diversity, Trade Unions, Labour

Words: 8,966 + Abstract, notes, etc

Acknowledgement
We would like to thank Wendy smith for her perceptive points on an earlier draft of this
paper. Needless to say, all remaining infelicities remain ours.

1
 The Role of Ethnicity in Employee Relations: The Case of Malaysia

Abstract
The role of ethnicity continues to be underplayed in much employment analysis. Given
the fragmentation of many homogenous societies and workforces and their increasing
heterogeneous nature such neglect not only highlights partiality, but is problematic at the
level of analysis, and, therefore, policy and practice. Likewise, the state and capital have
been seen as overly uniform and monolithic rather than as shifting, transient and
fragmented. Furthermore, the establishment and continuing growth of first and
subsequent generation citizens implies a more nuanced analysis will be required of not
only labour, but state and capital as well. These issues, however, are not unusual, nor
marginal (although they may be marginalised), in some countries. We use the example of
Malaysia, itself an old colonially produce type of multi-cultural society, to show the
weaknesses of traditional views and to analyse and highlight the impacts of ethnicity with
a view to developing a framework for incorporating this dimension into the discourse of
employment systems. This indicates the links between work, employment and society.

1. Introduction
Over the past three decades there have been significant changes occurring in the field of
employment relations and its analysis. For one the traditional structural focus has
increasingly given way to a greater emphasis on process. From this it has been recognised
that process not only results from, but impacts upon, structural conditions in an
unfolding, mostly incremental, process of change. Second, there has been greater focus
on intra-organizational analysis (of trade union structure and process). Thirdly, there has
been more willingness to focus on those issues traditionally unseen or seen as secondary
to analysis of labour-capital relations. However, despite these changes, the role of
ethnicity continues to be underplayed. Given the fragmentation of many homogenous
societies and workforces and their increasing heterogeneous nature, and the establishment
and continuing growth of first and subsequent generation citizens, such neglect not only
highlights partiality, but is problematic at the level of analysis, and, therefore, policy and
practice. Likewise, the state and capital have been seen as overly uniform and monolithic
rather than as shifting and fragmented.

In a more heterogeneous and diverse employment world, ethnicity i is increasingly

important. In the prescriptive and practitioner-type management literature there have
been ideas of managing multi-cultural workforces (Tayeb, 1996) and the 'evolution' of
Equal Opportunities into Managing Diversity (Ellis and Sonnefield, 1994). However,

2
beyond this there has been a strange silence in the analysis of ethnicity. This paper aims
to redress the balance.

At the same time, in the field of Asian employee relations (ER) the relationship between
the state and labour has been assumed to be one based on either 'incorporation' or
'suppression' arising from the economic imperatives of the 'developmental' or 'dependent'
state (Deyo, 1989). However, 'macro' structural explanations drawing from forms of
'economic determinism' underplay the significance of the national institutional contexts
within which developments evolve. For example, many countries affected by the 1997
Asian Financial Crisis saw the rupture of underlying pressures and tensions. The 'crony
capitalism' attribution of the crisis created significant pressure on political leaderships
(Jomo, 1998). The scale and impact of the crisis, while uneven, provided potential for
'regime opening' in general, and trade union organisation and mobilisation, in particular.
Countries, to varying degrees, saw reconfigurations in the political, social and
institutional domains (Hitchcock, 2002; Kwan S. Kim, 2001; Bhopal 2002). These have
been evidenced by, for example, a new schism in the heart of the Malaysian political
centre. Thus, political spaces have opened up and have reinforced and given rise to new
opportunities, constraints and closures.

We use the example of Malaysia to show the weaknesses of traditional views and to
highlight the impacts of ethnicity with a view to developing a framework for
incorporating this dimension into the discourse of employment systems. The historical
tensions and resulting institutional 'sedimentation' which informed the 'strategic choice' of
the ER actors (Poole, 1986) in their unfolding responses to the Asian Crisis and political
ferment are outlined. Earlier work has addressed similar issues from a management focus
(Bhopal and Rowley, 2002), while this paper is more focused on the other two actors in
the system, the state and labour. It is argued that while Malaysian trade unionism has
been historically hampered by ethnicity in a number of ways, this is beginning to melt
away. Nevertheless, at the same time, although new opportunities for action are opening,
the response of the labour movement needs to be viewed in the prism of the context of
ethnic identities.

3
This paper takes the following structure. First, we outline the theoretical and conceptual
apparatus that will assist in framing our exposition of ethnicity in the development of
Malaysian trade unionism and its implications for state strategies towards the
management of labour. Second, we present the case of Malaysia and the evolution of its
ER. It covers the main eras of ethnic dominance of the labour movement and a discussion
of recent developments. There are three further sections: labour-capital intra-ethnic
tensions, a discussion, and conclusions.

2. The Role of Dependency, Action and Ethnicity

2.1. Dependency and Diversity
Studies of ER, following Dunlop (1959), often accept the principal actors as state, labour
and capital. However, in the context of the current globalization and earlier dependency
theory debates, it has been assumed that the search by multinational companies (MNCs)
for low labour costs and weak labour organisation results in the suppression of trade
unionism owing to 'competitive downbidding' (or 'social dumping' or 'race to the bottom')
in the context of the states’ relative powerlessness. This is reinforced by inter-state
competition to provide the most 'attractive' sites for foreign direct investment (FDI). This
type of economic determinism is similar to globalization authors who advocate the 'end
of the nation state'. Leaving aside the issue as to whether MNCs are really so 'footloose',
'macro' structural explanations of ER, especially Asian, drawing from forms of 'economic
determinism' and assumptions that states act as agents of capital to deliver labour
subordination, omits the diversity and internal dynamics of local context (Deyo, 1989).

Indeed, dependent states, reflecting labour and political considerations, can adopt at least
three pro-capital labour strategies (Valenzuela, 1992), each giving rise to its own
particular tensions, which provide potential opportunities for 'action'. First, sponsoring
and incorporating labour movements in an attempt to create co-operative and populist
movements accepted by workers. This may become unstable where concession making is
undermined by the contradictions between capital, labour and the state. Second,
incorporating peak labour movements to control autonomous action. This may raise

4
questions of union legitimacy and give rise to challenges to 'official' labour movements.
Third, fragmentation and decentralisation, where unbridgeable differences between
political parties and labour movements exist. Such attempts to expose union movements
to the 'market mechanism' are associated with attempts to weaken power by constraining
and limiting ability to organise and mobilise, ie via restrictive legislation. The aim is not
only to prevent labour movements from exerting economic pressure, but also to prevent
them becoming a platform for political opposition to regimes.

2.2. Action and Context

The above indicates that labour and trade unions are not merely passive by-standers to
unbridled state strategy. Rather, unions are actors with potential for action and reaction,
and can support or challenge state strategies. This action cannot be read in a deterministic
manner nor assumed to be consistent over time, a situation similar to their relations with
employers (see Bhopal and Rowley, 2002). Rather, responses will be shaped by a variety
of political, economic and social factors internal and external to the union and labour
movement. These include: the level, type, extent and intensity of industrialisation; union
relationships with the state and other forces; ideology which shapes union practice or
worker consciousness; and experience of struggle (Southall, 1988). Others include
composition and characteristics of union membership; accountability of leadership and
extent of worker democracy; and commitment of unions to shop floor and progressive
political struggle.

Other factors, especially in relation to Malaysia, include the fact that workers are first
generation industrial wage labour with peasant backgrounds. This shapes their
consumption, and hence income acquiring, strategies and subverts their commitment to
union based strategies of advancement. Rather, they concentrated more on traditional
patron client type relationships derived from village peasant society, for individual and
family advancement (see Smith, 1996).

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2.3. Ethnicity and Identity
In the social science literature the notion of 'subjectivities' drawing from anthropology,
psychology, social psychology, sociology and semiotics, to name a few, has been gaining
prominence. Some of the globalization discourse has argued that we are witnessing the
end of the nation state. However, while this applies implicitly to the role of the state in its
ability (or desirability) to manage global capital, the state as a socio-cultural space
continues to exist and human behaviour cannot be explained through textbook
abstractions of 'economic man'. Humans are socio-cultural beings, and not necessarily
homogeneous ones at that. In this sense states contain within their boundaries differences,
and in their political and cultural spaces cannot but help utilize 'difference' as the
distinguishing principle. The state provides one of the terrains on which conflicts of
control over (or through) the apparatus of socio-cultural subjectivities is fought (see Goh
Beng Lan, 2002). It is these very differences that formed the roots of the socio-cultural
eruptions that accompanied the 1997 Asian Crisis, as in the reassertion of the difference
between 'East and West' (Shamsul, 2001; Brittan, 1997). However, the reactions to such
disruptions need also to recognise locally embedded configurations that shape the
response of actors.

Factors affecting trade union action often under-emphasize the significance of ethnicity.
Indeed, few have utilized ethnicity as an explicit variable in theorizing and it has also
been limited in management texts. This may be explained by fears of potential political
'incorrectness' or by the fact that it creates too much organizational complexity to be
encompassed by the universalist offering of normative rationalist literature (see Clegg et
al, 1999). On the other hand, issues of ethnic identity have been written off as 'false
consciousness', and diversionary to analysis based on the labour process (Mohapatra,
1997). This myopia is despite the fact that analysis of plural multi-ethnic societies, where
political and social spheres are articulated and expressed in ethnic terms, indicate that
there can be strong feelings of ethnic identity in some social formations (Fenton, 1999).
Indeed, the value accorded to ethnic cleavages, particularly with regard to the pressure
for solidarity, can overshadow and obscure intra-ethnic class differences (Jesudason,

6
1989), although this may need to be compensated for by perceptions of enhanced 'group
worth' or promises of deferred returns.

Given the importance of ethnicity, some relevant characteristics and theoretical positions
are needed. The form and substance of ethnic identity and its utilisation and leverage is
not static. In the primordial view, ethnic identity is seen as derived from the fact of being
born into a particular community and adopting its language, values and cultural practices
(Hitchcock, 1999). As a social identity established in early life, ethnicity has been seen as
more robust and resilient to change in later life than other identities (Jenkins, 1996). In
this view ethnicity is seen as a given – something that a community 'is'. Nonetheless,
community identities are not static and ethnic identities are produced and reproduced
over time. Hall (in Grossberg, 1976:225-6) argues cultural identities are 'the points of
identification' which are '…made within the discourse of history and culture. Not an
essence but a positioning. Hence there is always a politics of identity, a politics of
position, which has no absolute guarantee in an unproblematic, transcendental law of
origin'. This concurs with the situational view of ethnicity, seen as a boundary defining
political project and subsequently as a resource (Rex, 1997, Hitchcock, 1999), and which
can, therefore, be viewed as something a community 'has'.

Ethnicity can be used as a resource for political mobilisation as well as for boundary
definition. This implies that ethnicity can be used in attempts to retain or challenge
political control. There are two terrains in which ethnicity can be utilised, each with
different implications. In the case of inter-ethnic competition, the relative locations of the
ethnic groups within the social formation will be significant in understanding the manner
in which ethnicity is leveraged (see Fenton, 1999). In the case of intra-ethnic competition
and political challenge based on factionalism, issues of legitimacy and ethnic definition
will be prominent. Malaysia illustrates this in a classic way. Here myth and tradition may
be utilised to legitimate the respective political discourses. While the inter-ethnic case
concentrates on the power and unifying potential of ethnicity amongst the ethnic 'we', the
intra-ethnic case points to uncertainties in any fixed notions of ethnicity (although not the
case in Malaysia).

7
Nevertheless, an appreciation of the meaning of who we are is necessary for human
beings. As Hall (1997) argues, meaning gives 'us' a sense of who we are, with whom we
belong and in this sense it is about questions of identity. Meaning comes from the
structures of mediation (texts, images, sounds, etc) which constitute the signification
processes that create, modify and reflect thoughts, ideas and feelings through the manner
in which 'things' and concepts are understood. This understanding is cultural in as far as
understanding comes through the way in which 'things' are representedii.

These points suggest that differences over the interpretation and exact meaning of ethnic
identity may arise from the fact that while seemingly strong in defining oneself against
the 'other', it is weakened in relation to the ethnic 'we'. Identities are not solely
constructed in ethnic terms, people have many identities, which can be constructed in
terms of gender, class, occupational grouping, and so on (Allen, 1994). Individuals, or
sub-groups identified with ethnic groups, will not in all circumstances have a primary or
sole loyalty to their ethnic group. Nonetheless, ethnic identification may be utilised
instrumentally or opportunistically to mobilise support to achieve non-ethnic ends within
the ethnic group. Multiple identities means that fractures and divisions arising from non-
ethnic identities can be played out within ethnic boundaries. Indeed, the objective of
actors may be to work within the discourse of ethnic identity to achieve particular non-
ethnic ends. One example is the food industries employees union in Malaysia in the
1970s (Smith, 1994a). In short, there are potentially multiple politics within ethnic
groupings; and in societies where the ethnic discourse is used to define the ethnic 'other',
competition for the meaning of ethnic identity is also a resource for intra-ethnic
competition.

These arguments reinforce the view that the manner in which labour and trade unions
articulate political demands, and how, they mobilise support, is contextually informed
and depends upon the nature of labour and the union movement, the state and the basis of
political competition. Each of these are mutually interdependent; influenced by historical
interaction and can have long-term effects. While these effects can be transformative,

8
they are mainly incremental, or reflexive, driven by the contextually situated 'strategic
choice' of the actors, which create the future and reproduce the past and present (Giddens,
1984). Key amongst this is ethnicity.

To help ground our argument so far, and to aid understanding, we use a conceptual
framework (Figure 1) to locate ethnicity and its impacts for a more nuanced appreciation
for understanding ER. The framework, following Poole (1986) and Giddens (1984),
suggests that ER and its component `actors’, while primarily structured by wider forces,
can also affect and modify the wider structures in which they operate. However, first,
structures do carry a 'heavy weight' due to the processes of institutionalization, and,
second, change can be more transactional than transformational. In short, the
sedimentation of actual or represented cultural, historical and economic phenomena
through justificatory ideologies and theories gives rise to the institutions of societal
formations and constructs contemporary identities within them. The population structure
may assist in ensuring the perpetuation of these 'orders’ or may, due to demographic
change and new, or competing, ideologies, may act as a 'solvent' for change. However, a
significant part of demography is ethnicity, which affects identity. On this basis, one of
the glues and solvents in society is the notion of ethnic identity. Ethnic composition and
the associated questions of national identity affect and effect the representations which
constitute the discourse legitimating political, economic, social and cultural practices.
This may be reflected in the nature of integrating or differentiating practices, patterns of
consensus or conflict which themselves may be reflected in the fragmentation or
coherence of organizations/institutions. All of this will serve to impact upon ER structure
and process and the ideologies, identities and priorities of the actors.

[Figure 1 about here]

2.4. Propositions
The above leads us to a set of three inter-related propositions.
1) States, even dependent one, have choices in labour strategies, and these are not
deterministic but contingent on political, economic, social and cultural configurations.

9
2) These strategies are not just driven by capital, but labour has a role as not only a
'voice', but potentially as a political actor itself.
3) Given the significance of 'subjectivities', not just in plural multi-ethnic societies, but
in mono-ethnic ones also, the role of ethnicity is important to this, although this can
be internally fractured along intra-ethnic lines.

3. The Case of Malaysia

3.1. Methodology
The paper draws from a range and variety of sources. These include interviews, personal
communications, Colonial Labour Department Reports and secondary sources. Interviews
were conducted in 1993, 1994, 1999, and 2000 with members of the Malaysian Trade
Union Congress (MTUC), the Malaysian Labour Organization (MLO), Harris Solid State
Workers’ Union (HSSWU), and Parti Rakyat Malaysia (PRM). Secondary sources
include a review of the MTUC newspaper and historical document archive, Malaysian
Labour Department reports as well as numerous texts dealing Malaysia.

3.2. Background
Malaysia recovered its economic growth rapidly after the Asian Crisis as the minus 7.4%
GDP in 1998 transformed into a positive 6.1% in 1999 and 8.3% in 2000, giving a per
capita GDP of US$3,834, a current account surplus of US$8.4 billion and a 1.6%
inflation rate (Australian Department of Foreign Affairs and Trade, 2001). From 1996 to
1998, unemployment increased from 2.6% to 4.9%, but then fell to 3.1% by 2000
(Government of Malaysia, Department of Statistics 2002, 2002). By 2002 GDP was
estimated at US$95.7 billion, some US$3,290 per head, growing at 5%, with
unemployment at 3% and inflation 1.7% (Financial Times, 2002).

This robust employment performance was partly due to employer reluctance to dismiss
permanent local workers with a preference for terminating fixed term contracts,
temporary lay-offs and voluntary severance (Peetz and Todd, 2000), together with an
anticipated relatively quick upturn, and other flexibilities which fell short of redundancy.
Most significantly, the estimated legal and illegal migrant labour force of 3-3.5 million

10
(HRW, 1998; Bhopal, 2000), provided the numerical flexibility for rapid adjustment and
enabled the state to escape the dislocations of unemployment, albeit with reductions in
income and spending power.

The Malaysian government can be categorised as a developmental state. While some

enterprises have been privatised, there remains significant state sector investment. The
government's close alliance with the private business sector remains (albeit at a reduced
level of commitment) with a variety of policies and programs to bolster the economic
status of the Malay and indigenous communities. For instance, when a company is
established, it must have 30% ownership by Bumiputera (meaning 'sons of the soil', and
used to refer to Malays), and a quota system extends to the employment of workers in
every companyiii. Malaysia continues to build its manufacturing base with a heavy
emphasis on component and consumer electronics, which accounted for 33% of GDP in
2000 (Department of State, 2001).

Unlike many countries with 'minor' ethnic groups, there are three 'major' ethnic groupings
in Malaysia. The total population (2000 Census), was 23.27 million, comprised of:
Malays 65.1%, Chinese 26% and Indians 7.7% (Department of Statistics, 2001). Malays
are not homogeneous and have themselves supplanted the indigenous minorities,
Prebumi (Hua Wu Yin, 1983). Similarly, both the Chinese and the Indians are
heterogeneous, differing by region, language and religion (for details of the complexity of
Malaysia's plural society see Smith, 2002). Nonetheless, the phenotype has been the
defining parameter of the 'race' and ethnicity conflation. Ethnicity has been the prime
organising principle and basis of electoral mobilisation. As a result, the language of
ethnicity is not differentiated from the language of race.

Malaysia has maintained a multi-party political system with periodic free elections since
independence (1957). The basis of inter-party electoral competition and political
organisation has been largely of ethnicity and less explicitly of economic and political
ideology. The leading parties as a consequence are largely organized on ethnic identities.
The main party in the ruling multi-ethnic coalition, the Barisan National (BN), is the

11
United Malay National Organization (UMNO) representing Malays, while the Chinese
and Indians are represented by the Malaysian Chinese Association (MCA) and the
Malaysian Indian Congress (MIC). The opposition includes the Islamic PAS, the largely
Chinese Democratic Action Party (DAP), and more recently the mainly Malay-based
Keadilan.

The UMNO is the embodiment of the Malay interest and permeates society. Its
organisational structure has 17,000 branches and 2.8 million members (out of a Malay
population of about 12 million). The UMNO defines itself as a party that strives to
achieve national aspirations for the benefit of the people, religion and country. In this
context, parties purporting to be 'multi-racial', given their political constituencies to
which they direct themselves, are perceived to be ethnically dominated, resulting in the
de-facto ethnicization and reinforcement of such a political discourse.

Between independence and 1970 the proportion of the Malay population in urban areas
increased by from 11.2% to 14.9%, while the Chinese remained the predominant group in
the higher paying metropolitan areas (Ooi Jin-Bee, 1976). The 1969 'race riots', fuelled
by wealth and income disparities and sparked by opposition party gains, led to demands
for Malay economic equality and resulted in the New Economic Policy (NEP) iv. This
aimed to eradicate poverty, restructure society and eliminate the association of economic
function with ethnicity. Economic growth with positive discrimination of Malays rather
than redistribution from the Chinese was viewed as the vehicle for this (Means, 1991).
However, 'foreigners' still had much more capital than the Chinese at this point, and it
was from them that capital was redistributed, in effect. The objectives were to create
Malay employment, including the development of a professional, managerial and
entrepreneurial/business and share-owning class. Economic growth was to be enabled by
a FDI-based Export Orientated Industrialization (EOI) strategy, subsequently
supplemented by an Import Substitution Industrialisation (ISI) strategy in heavy
manufacturing sectors, such as steel and automobiles.

12
As a result of industrialisation, the proportion of Malays in agriculture declined from three-
quarters (74.6%) to about one-third (36.7%) between 1957-90, while those employed in
manufacturing, commerce and private and public service rose to over one-half (53%). One
consequence of this changing ethnic division of labour was that while in 1988 Malays
accounted for 59% of all trade unionists and 54% of wage workers (Labour and Manpower
Report, 1988/89), by 1999 over 70% of union leaders and members and 60% of the
MTUC General Council was Malay (Interview notes, MTUC, 1999). While
industrialisation expanded Malay waged labour it also created a Malay bourgeoisie and
government sponsored rentier class (Gomez, 1991; Munro-Kua, 1996), such that the
boundary between government, party and economic interests blurred, creating a new
dynamic in Malaysia’s political economy (Bowie, 1994). Despite the rhetoric of wealth
equality, intra-Malay economic inequality grew.

In sum, many of Malaysia's problems are attributed to its multi-ethnic population (Gomez
and Jomo, 1997). Some have seen the discourse of ethnicity as obscuring more
fundamental structures of class domination and inter-ethnic elite accommodation (Hua
Wu Yin, 1983; Yun Hing Ai, 1990; Gomez, 1999). The question of whether ethnicity is a
problem per se, or one that is utilised to maintain political dominance, retains a fulcrum
position for analysis.

3.3. Evolution of Employee Relations

The role of intra-ethnic tensions can be witnessed in the evolution of Malaysian ER.

3.3.1. Trade Unionism and Anti-Colonial Politics - The Chinese Era

The growth of Chinese dominated general unionism in the 1920s reflected the ethnic
division of labour. In 1926 The Chinese Communist Party (CCP) organised the Nanyang
Federation of Labour (NFL), particularly amongst the unskilled Hainanese labouring
classes, which adopted an anti-British, anti-colonial stance. The intra-ethnic division of
Indian labour, state regulation of terms and conditions of employment and relative
isolation in the plantation sector, contributed to Chinese dominance of the labour
movement (Stenson, 1980; Hua Wu Yin, 1983; Ramasamy, 1994). This reinforced the

13
perception of Chinese dominance and militancy amongst the working class as well as
their identification with China. Furthermore, solidarity was undermined by wage
practices: Chinese labour was paid by the towkay negotiated piece rate, while Indians had
a state defined day rate. This gave rise to Chinese plantation earnings being at times as
much as 175% of Indian earningsv.

The 1930s depression saw the reorganisation of the NFL into the Malayan General
Labour Union with the aim of maximising recruitment across ethnic lines and enhancing
class solidarity (Wad, 1988). In the context of migration restrictions, economic recovery
enhanced the bargaining power of workers in the non-recessionary period between 1935-
38 and 1940-41. This context assisted the increasing union militancy led by the
Communist Party of Malaya (CPM) in the earlier period and by Indian plantation labour
in the latter. While largely driven by issues of terms and conditions, it was underpinned
by the growing anti-colonial struggles in China and India vi (Stenson, 1980; Jomo and
Todd, 1994; Hua Wu Yin, 1983).

The early post-war period saw continued growth and militancy by the reorganised Pan
Malayan Federation of Trade Unions (PMFTU). At its peak (1947), its 250,000 members
represented 40% of waged workers and 80% of unions in Malaya. While the PMFTU
continued to be Chinese dominated, Indian trade unions were increasingly organised and
by 1946 most had affiliated to the movement. While the union movement became an
integral part of a cross-racial alliance forged on the issues of citizenship rights and
opposition to colonialism, many unions remained ethnically divided, while ethnicity was
also used to create division. For instance, strikes against pay cuts in 1947-48 were met by
increasingly organised employers associations who dismissed strikers and utilized
Malays as 'strike busters'. Indian demands for pay comparability with Chinese labour
resulted in reductions in Chinese wages (Jomo and Todd, 1994). The increasing
assertiveness of the state and employers culminated in requirements for union registration
aimed at disassociating the political co-ordination of the labour movement. This
contributed to the conflict and culminated in the use of troops and the eventual
declaration of an emergency and the Malaysian 'red purge'. As a result, the CPM was

14
outlawed, unions in the PMFTU de-registered and their leaders either went underground
or were arrested (and some were executed).

3.3.2. Trade Unions and 'Responsible Unionism' - The Indian Era

The British authorities recognised the need for a channel for the articulation of
aspirations to assist in regime legitimacy in the context of growing opposition. To this
end British trade union bureaucrats and the colonial state wanted an 'independent,
responsible, autonomous' union movement. The pluralism modelled on British trade
unionism was to be achieved through English educated Indians. These led organisation
efforts in the Indian dominated plantation sector, but with assistance from employers and
the Labour and Public Relations departments (Trade Union Advisors Report, 1950).
Thus, in contrast to earlier Chinese dominance, the post-independence period saw Indian
control of the union movement. The association of ethnicity and trade unionism was
reversed such that Indians accounted for 71% of all union members at its peak (1951),
remained the majority up to 1963 and retained firm control of the MTUC until recently.

The Indians, a small grouping in the country, have shown quite an awareness of the
difficulty in involving themselves in politics. The continued association of ethnicity with
waged labour in general and the labour movement in particular has dogged the labour
movement since its inception. The post-independence ethnic accommodation whereby the
Malay sphere of political influence would not be challenged while the Chinese could
pursue their economic activities, reinforced ethnic divisions. Spheres of influence were
consolidated with ethnicity as the fundamental organising principle. This, in conjunction
with the ethnic division of labour and the ethnic-labour movement association,
constrained the labour movement from pursuing a political strategy to advance working
class interests. Two factors account for this. First, the absence of powerful representative
party involvement in the political sphere carried dangers of incorporation given the almost
complete control of the Alliance Coalition (a coalition of the main ethnic parties). Second,
support of opposition parties could lead to suppression and possible accusation of being
politically, and thus ethnically, partisan, particularly in light of the absence of Malay
waged labour. Such accusations carried the danger of undermining the horizontal (class)

15
organising principles of trade unionism, while bringing unions potentially into conflict
with their potential future membership. There are many more factors undermining class
solidarity, as mentioned above.

The late 1940s state suppression of the first wave of the CCP controlled labour movement
was possible owing to their militant anti-colonial strategy, absence of Malays within the
working class, differential basis of pay between Indian and Chinese labour, internal
political divisions within the Chinese community and the wider debates about Chinese
citizenship and the fear of Malays becoming a minority in Malaysia (Comber,1983; Hua
Wu Yin, 1983; Jomo and Todd, 1994). Control of the state sponsored Indian union
movement of the 1950s required less coercive direct action due to four inter-related
factors. First, the Chinese were disorganised by state suppression and had little
confidence in this new movement. Second, the leaders were moderate anti-communists
(Zaidi, 1975), ensuring a compliant and 'responsible' trade unionism. Third, control
passed to Indians, who were the smallest and least influential group, which contributed to
the movement’s numerical and political weakness (Jomo and Todd, 1994). Fourth, the
consolidation of ethnically based political parties served to undermine the movement's
ability to develop symbiotic links with political parties without undermining the
horizontal basis of union solidarity. Furthermore, in this context the labour movement
was unable to exert pressure through ethnically organised political parties.

3.4.3. Trade Unionism, Globalisation and National Development - The Dusk of the
Indian Era
The limited scope for action has dogged the labour movement post-1970. For instance,
given its political weakness, the option of working with the multi-ethnic, but largely
conservative, coalition of the BN dedicated to low wage EOI, carried the possibility of
incorporation. Equally fraught was working with opposition parties because their
memberships were largely from particular ethnic groups. Critical commentary was also
difficult while Malay labour constituted a minority and control of the union movement
was vested in Indians. The 1969 'race riots', partly arising from conflict over cultural
issues such as education and language in the context of Chinese electoral gains, put centre

16
stage a nationalist discourse that emphasised the economic and cultural weakness of
Malays in Malaysia. The resultant affirmative action programmes, as embodied within the
NEP, sought to elevate the Malays' position. Trade union issues of distribution were seen
as secondary to the developmental process that was presented as a policy shift to enhance
Malay opportunity as a whole. Such advancement was articulated by the political elite, a
necessary prerequisite for 'racial' harmony in an ethnically segmented economy and multi-
cultural society. In these circumstances, union involvement with opposition political
parties, particularly non-Malay, carried the potential accusation of ethnic political
association and lack of commitment to the policy of Malay advancement and nation
building. These factors left the oppositional elements in the labour movement open to
state suppression, vilification and accusation of being politically, and thus ethnically,
partisan, if they challenged state policy.

Since the early days the issue of union involvement in politics has been recurrently
debated, but defeated, in the MTUC (see Trade Union News for Overseas, 1959). The
MTUC produced a manifesto specifying conditions for endorsing parties, so avoiding
being ideologically or ethnically tied. This pragmatic approach enabled the union
movement to maintain the integrity of its central role of promoting the labour interest.
Nevertheless, individual union activists and leaders tended to be party activists, with
diverse affiliations to various, but essentially ethnically based, parties, which do not
necessarily pursue a labour agenda. However, this has not fundamentally undermined a
cross-ethnic trade union identity and commitment to the labour interest. As a result, the
MTUC claims to be the only mass 'multi-racial' organisation in Malaysia. Yet, cross-
ethnic trade union identity has tended to create tensions within the labour movement as
the 'pulling' integrative forces of a labour identity face the 'push' from the divisions
resulting from ethnicity and attachment to ethnically based political parties.

State justification of the suppression of trade unionism on grounds of the need to act
against communism and forces of instability had, however, become untenable and the
emergence of a Malay capital class and state supported FDI requiring low cost labour
resulted in the increasing implausibility of attributing Malay exploitation to the Chinese.

17
In this context the MTUC and the labour movement were represented as secondary to the
primary goals of economic and cultural advancement and protection of Malay interests.
The possibilities of intra-ethnic class based conflict with the potential to divide urban
Malay political loyalties have long been recognised (Hua Wu Yin, 1982; Wad, 1988; Yun
Hing Ai, 1990), but have not materialised. Nonetheless, the state recognised the potential
threats in the early 1980s when there was a rupture between itself and the union
movement.

The state never had a symbiotic relationship with the union movement, and only as part
of a wider policy of co-opting oppositional forces in the early 1970s did the state attempt
courtship (Jomo and Todd, 1994). Union opposition to the state’s labour policy came to a
head with the Malaysian Airlines dispute (1980). This led to arrests and dismissals of
union activists, union de-registration and a new wave of labour repression. The dispute
was multi-racial with heavy activism by Malays and supported with solidaristic
international and domestic secondary action. In light of this, the state felt compelled to
break the class basis of the confrontation at the outset (Munro-Kua, 1996). Union de-
registration led to its part replacement by in-house unions and set the state’s agenda for
future ER policy. This was followed by the pursuit of an ideological and structural
strategy to incorporate the Malay working class into the state capital interest.

Since the early 1980s the state has attempted to distance workers from the principles of
Western pluralist models by emphasising so-called 'Asian Values' of loyalty, hard work
and docility, as articulated by Prime Minister Mahathir and his promotion of the 'Look
East' policy of the 1980s (Wad and Jomo, 1994). This stress on the need for an enterprise
and work consciousness was not only aimed at enhancing productivity and reducing
labour costs, but also to meet the potential 'challenge from below' arising from the growth
of a Malay working class. As part of the policy the state attempted to undermine a mass
class based unionism by promoting in-house unions and enterprise consciousness in a
non-political business unionism model (Wad and Jomo, 1994; Kuruvilla and Arudsothy,
1995; Bhopal and Rowley, 2002).

18
At a macro-level the state invoked notions of 'national interest' to undermine unionism.
Indeed, in the 1980s the government sought to undermine the central trade union leadership
for supporting opposition parties and policies. The unions, owing to links with political
opponentsvii, were accused of failing to credit the achievements of the Malay elite in
advancing the economic well being of the Malay masses. As a result, public attacks accused
labour leaders of being anti-nation, anti-democratic and, therefore, anti-Malay. The strength
of such a reaction was not only about defining who the guardians of the Malay interests
were, but also of what the Malay interest is. For instance, in the context of a wider
emergent defence around the debate about Asian democracy, the Minister of Human
Resources warned ASEAN members to be 'watchful' of Western unions attempting to
extend influence in Asian labour movements to 'destabilise' ER and 'impose' labour
practices which were 'unsuitable' in the Asian context (Star, 1992). This 'East-West'
discourse was reflected in a New Straits Times (1993) editorial:

Trade union leaders no longer listen to voices [of workers]... pay no

heed to their need for leadership...These leaders... warble and yodel on
international platforms to besmirch the government...[they turn]... a
blind eye to the nations achievement in protecting the labour force.
Yet it has been a trend in developed countries for unionists to hammer
the ruling party... In such countries the 'workers versus vampire like
ruling elite' mind set was responsible for the conversion of the labour
movement into political parties. But surely such a trend has no
legitimacy in a political and socio-economic climate that protects and
promotes workers' rights and well being.

Such a position enabled the government to publicly attack and undermine those elements
of the movement deemed oppositional. This resulted in an attempt to fragment the labour
movement through, for instance, sponsorship of the alternative MLO (1988) as a result of
the MTUC's increasing criticism of government policy and involvement with
oppositional parties.

3.4.4. The Light on the Horizon - The Emerging Malay Era?

Since 1996 the state appealed to the trade union movement to become a 'partner' in the
private sector driven concept of 'Malaysia Inc.' (Star, 1996a). The condition that unions

19
accept a business orientation in the workplace and assist in attracting FDI was
increasingly accepted by the MTUC. Simultaneously, the state continued to attack union
leaders for tarnishing the country's image (Star, 1996b) and while the MTUC was
portrayed as less confrontational, conflicts with the state were personalised. A number of
factors may account for this. The MTUC came under increasing pressure as a result of its
opposition, which was gathering pace from the early 1980s. At that time the MTUC de
facto aligned itself with the opposition through its leaders association with the breakaway
Semangat'46 and the DAP. The MTUC's oppositional stance resulted in a state offensive
not only prosecuting and publicly attacking union leaders, but also bypassing the MTUC in
national forums in favour of the breakaway MLO, seen as an arm of the ruling BN.

The notion of ethnic identity and Malay labour issues and decentralization of ER and
trade union structures are related in the new context in light of the root and branch
structure and perception of the UMNO as the most powerful representative and advocate
of the Malay interest. Labour leaders use local UMNO leaders to attempt to resolve
differences with management, with the implication that labour issues are channelled into
political processes, which strengthens political institutions at the expense of labour
institutions (Bhopal, 2000). However, the UMNO also represents business interests,
while at a micro, workplace level, union solidarity has been fractured by appeals to ethnic
closure based on Malay identity, interest and cultural practices (Casparez, 1998; Smith
1994; Bhopal and Rowley, 2002). Some MNCs are reportedly recruiting senior UMNO
activists to posts as human resource managers in their attempts to counter union
organizing on the basis of Malay identity politics (Interview notes, HSSWU, 2000).

Changing ethnic composition means the state cannot continue to ignore the labour
movement by using the ethnic card to marginalise opposition. The state's recognition of
this is seen in the Minister of Human Resources advising the MLO to dissolve itself and
join the MTUC in 1996-97 (Interview notes, MTUC, 1999). This was prompted not only
by the failure of the MLO to undermine the MTUC, but by potential internal
reconfiguration of the balance of forces within the MTUC itself. In 1994 the position of
Zainal Rampak’s, MTUC's Malay President, was under threat from more oppositional

20
and leftist activists. He resigned from Semangat'46 and was wooed by Anwar Ibrahim to
join the UMNO. The re-entry of the MLO consolidated and enhanced Zainal Rampak's
support and enabled him to retain control of the MTUC and advance his developing
vision for the Malaysian labour movement.

We conclude that the trajectory of the Malaysian labour movement is driven by factions
that see the emerging future government-labour movement relationship in the context of
ethnic solidarity with a pluralist flavour, but that such a strategy is problematic owing to
the capital interests inherent in the state.

4. Labour and Capital Intra-Ethnic Tensions

While state direction of an ethno-development strategy, underpinned by affirmative
action, resulted in the spread of opportunities for Malay waged work, it also produced the
growth of a Malay business class who were part of the networks of different political
factions. This enabled politicians to distribute economic opportunities and thereby
sponsor their particular business support, with those closest to the incumbent UMNO
gaining most (Gomez, 1991; Munro-Kua, 1996). The resulting ambiguous boundary
between government, party and economic interests created a new dynamic in Malaysia's
political economy (Bowie, 1994) as intra-Malay inter-class economic inequality grew.
There have been growing divisions between wealthy and poor, public sector professionals
and business people and the politically included and excluded business class. This was
reflected from the mid-1990s with concern, largely from the urban Malay professional
and middle classes (teachers, civil servants, etc.), over 'political business', with fortunes
amassed from share purchases and business links. These include those between
politicians and the head of the airline and industrial conglomerate, TRI (Economist,
2002). This has been exacerbated by politicians' business dealings (Jomo, 1989; Gomez
and Jomo, 1997) and their increasing discussion in the UMNO's general assembly. While
these factors did little for regime legitimacy, they did not undermine it in the context of
full employment and growth in the economy, wages and job opportunities for Malays in
particular, and others in general. However, as recent events indicate, they are a potential

21
source of intra-ethnic Malay disunity and tension both within and between the various
classes.

The Malaysian labour force emerged relatively unscathed from the Asian Crisis. Along
with the attribution of the crisis to 'foreigners', this mitigated the need and potential for
the labour movement to mobilise. However, the crisis gave rise to a political challenge to
the ruling faction within UMNO, as reflected in the conflict between Anwar Ibrahim (ex-
Finance Minister and deputy Prime Minister) and Mahathir Mohamad (Prime Minister).
This culminated in the formers’ dismissal, arrest and imprisonment and formation of an
alternative party, Keadilan, led by his wife.

Such developments have the potential to fracture ethnic allegiances to the centre by creating
intra-ethnic political competition. Implicitly, such division calls into question the notion of
Malay ethnic and cultural unity and associated Malay political and economic advancement.
This challenge to the UMNO was spearheaded by a coalition of oppositional parties with
which union activists were attached, including the MTUC President. Anwar Ibrahim, with
widespread grassroots Malay support, developed a broad constituency, forging links with,
and being a friend to, the labour movement and other groups without privileged access to
the increasingly centralized and small network of dominant politicians and their business
associates (Gomez, Pers. Comm; Interviews notes, MTUC, 1999). This intra-Malay
competition has again created internal fragmentation and division and threatened 'in
group' solidarity. However, the main threat to the UMNO was at its leadership level
rather than as the institutionalized political form for the protection and advancement of
the 'Malay world-view' (Ibrahim, 1998).

While the MTUC's Malay President asserts commitment to worker advancement, in the
context of Malay proletarianization this has increasingly become Malay worker
advancement, indicated by his 1996 UMNO application (personally handled by Anwar
Ibrahim and passed to Prime Minister). With Zainal Rampak's membership of the
UMNO, Senatorship (recommended by Anwar Ibrahim), and appointment to the National
Economic Advisory Committee, there has been increasing concern within MTUC ranks

22
over 'incorporation' into the government. This is particularly pertinent given his previous
and longstanding attachment to the opposition and personification as the union voice of
Malaysian workers.

In response, it may be argued that since 1996-97 some believe there is a possibility of
gaining concessions within the ranks of the government as internal fractures open up and
political compromises are sought. The ethnic factor is not insignificant in this shift,
although bounded by the MTUC President's commitment to an ER based on pluralism.
Within the MTUC it is felt that such thinking is marginalising opponents with attempts to
fill the MTUC and union movement with new and upcoming Malay trade unionists. As
one union activist reported, the Indian General Secretary '…is the last remnant of Indian
influence in the movement…' (Interview notes, MTUC: 2000). In the last MTUC
elections it was felt that the President '…wanted to push away all the Indians…[however]
…he needed [the General Secretary] because he was able to bring a lot of the Indian
delegates into Zainal's camp, but the Indians are feeling very much pushed out…'
(Interview notes, MTUC:2000).

In 1996, some two weeks after the Prime Minister expressed regret that the labour
movement had not entered into the partnership implied in the notion of 'Malaysia Inc.'
(Star, 1996a), he offered to include union representatives in trade missions if they
promoted Malaysia. In the meantime, the Human Resources Minister publicly identified
and accused the MTUC's Indian General Secretary of criticizing the government on
international platforms, implicating him and his allies as critical opponents. This indicates
the significance of personalities and ethnicities in state-trade union relations. According to
the General Secretary, the Human Resources Minister:

…was trying to say that the MTUC is all right, the leaders are all right, except
this one person...[it]...could be he wanted to try to create a kind of racial
dissension…the government always likes to say the ethnic Indians are doing
this, the ethnic Chinese are doing that, the Malays are all right. They always
tried to create this kind of feeling. I think they were trying to separate us, and
hoping that when the elections came the delegates would reject [me]…
(Interview notes, MTUC 2000).

23
However, some would deny the MTUC is being led down the road of co-optation to
minimise the threat from labour, believing worker advancement can only be achieved
through, rather than outside, the structures of the UMNO. Some argue the labour
movement is moving towards the Singapore model of symbiotic ties between peak labour
and the ruling partyviii. While this need not be viewed in ethnic terms, but as a
reconfiguration in the interplay between class and ethnicity, it may be that Zainal Rampak
speaks from a particular place, out of a particular history, out of a particular experience, a
particular culture without being constrained by that position (Hall in Grossberg, 1996).
However, such a position, while opening access directly to the Prime Minister seems to
have resulted only in concessions from the labour movement. For instance, the MTUC
agreed to reverse opposition to in-house unions (New Straits Times, 1997) and decided
against issuing a labour manifesto in the 1999 elections, the result of behind the scenes
mobilisation by Zainal Rampak. As one trade unionist said, 'The outcome was
orchestrated by Zainal. He mobilized his supporters to…block the manifesto. More than
80 members were present, double than we normally have…some who have never attended
a meeting before' (Interview notes, MTUC, 1999). Yet, some 17 unions independently
issued a manifesto, indicating division within the movement over the best tactics to
advance the labour and political interests of Malaysian workers. Indeed, de facto political
involvement is exemplified by a number of trade unions in 1999 presenting joint demands
to the opposition as a condition of their support, resulting in inclusion of a number of
them.

Despite the changing context of labour politics in Malaysia's ethno-economy, the MTUC
President continues to express fears of splits if any particular coalition of parties is
favoured. He continues to prefer individual action instead, with a belief that he can gain
concessions within the UMNO as the balance of forces re-configure. Supporters believe
entry into the government, accords him 'greater respect when meeting Ministers'
(Interview notes, President MTUC: 2000), enhancing potential to influence from within.
The Prime Minister in the meantime is providing unprecedented access in case the
MTUC President leads the labour movement into the opposition camp. One result was

24
that Prime Minister's promise to give serious consideration to issues regarding the
minimum wage and retrenchment funds, although the government subsequently distanced
itself from the former and rejected the latter (partly due to employer opposition). Should
the moderate stance provide returns, this would advance the labour interest after many
years of state hostility, and contribute to sustaining the organisational unity of the UMNO
as a representative of Malay interests. If labour cannot leverage concessions, the MTUC
would have lost an opportunity to fully exploit the opportunity of advancing the labour
interest which in the case of Malaysia goes beyond distribution, arguably to issues of
democracy and social justice. However, by so doing and awaiting what are uncertain
outcomes, labour leaders may have unwittingly elevated the Malay interest as represented
in the fear of the consequences of a intra-Malay split represented by a fracturing of the
UMNO.

5. Discussion
We now return to our set of three inter-related propositions. First, states, even dependent
one, have choices in labour strategies, and these are not deterministic but contingent on
the interplay and perceived priorities in the order of the political, economic and social
configuration. This is clearly supported in the case of Malaysia. Valenzuela (1992)
asserts that states could adopt at least three pro-capital labour strategies, reflecting labour
and political considerations. Each strategy gives rise to its own particular tensions, which
provide potential opportunities for 'action'. Ethnicity is a significant factor in those
societies where ethnicity is an implicit or explicit part of the political and cultural
discourse. Therefore, while states can sponsor and incorporate labour movements in
attempts to create a co-operative and populist movements accepted by workers, such a
strategy is only possible where there is ethnic harmony or co-incidence, or absence of a
differentiating ethnic political or cultural discourse. Even in these circumstances such a
strategy may become unstable where concession making is undermined by the
contradictions between capital, labour and the state. However, there would be additional
difficulties where any of these contradictions can be interpreted as having a differential
ethnic impact.

25
Second, these labour strategies are not just driven by capital, but labour has a role as not
only a 'voice', but potentially as a political actor itself. Support for this is more ambiguous
and less clear-cut in the case of Malaysia. The 'voice' of labour appears to be that of the
labour elite in a political discourse that by virtue of its ethnic basis has waxed and waned,
in different ways, to provide constraints as well as enable opportunities. Nevertheless, the
changing structure of the Malaysian urban working class has given rise to a potentially
new 'politics of labour’. Where, potentially, unable to accommodate unions, the state may
attempt to incorporate peak labour movements to control autonomous action. This may
only be only possible if there is success in creating the following. First, coincidence of
ethnicity between the peak of the labour movement, its members and between the state.
Second, union leadership has sufficient power to stop autonomous action by subordinate
levels in the labour movement, and the labour movement hierarchy, which, due to the
ethnic segmentation of labour will contain significant pockets of ethnic 'others' or ethnic
'we’s' who invoke other aspects of their identity. In the former case, questions of union
legitimacy and representativeness may give rise to challenges to 'official' labour
movements, and in the latter case, may give rise to union fragmentation on ethnic and
other identity grounds.

Third, given the significance of 'subjectivities', not just in plural multi-ethnic societies but
in mono-ethnic ones also, the role of ethnicity is important, although this can be
internally fractured along intra-ethnic lines. This is supported by the Malaysian case.
Where unbridgeable differences between political parties and labour movements exist,
policies of control based on fragmentation and decentralisation are used. This would
assume ethnic identity as a means of controlling trade unions has been used negatively (ie
unions as the ethnic 'other') or that the state is attempting to deem unions as antithetical to
the ethno-development project. Such attempts to expose union movements to the 'market
mechanism' are associated with attempts to weaken market power by constraining and
limiting ability to organise and mobilise via restrictive legislation, decentralization and
structures of mediation (ie forms of media). In this case it is clear that the aim is not only
to prevent labour movements from exerting economic pressure, but also to restrain them
from becoming a platform for political opposition to the regime.

26
In sum, we have demonstrated that in the case of Malaysia, labour has been subject to
several strategies which have changed over time as the political, economic and social
context has evolved. This context, however, is simply an 'order', and struggles have
existed over the (re)ordering of Malaysia’s political economy, and to this end the
different actors have utilized a variety of resources, from the legislative to the symbolic
and there are not necessarily any hard and fast determinate rules as actors make decisions
about the content and their position towards the preferred order of 'things'.

6. Conclusion
Ethnicity has often been under-played in much analysis. Yet, it has been an enduring
phenomenon in Malaysia and continues to impact upon ER. Links between labour leaders
and the ruling and opposition parties, together with the ethnic division of labour,
historically provided many opportunities for fragmentation and division and few for cross
and intra-ethnic labour solidarity. However, economic development and concomitant
change in the ethnic composition of the labour force is raising new issues of intra-ethnic
difference. Recent perceptions of injustice and regime illegitimacy, which cut into the
post-NEP Malay 'consensus', are not being translated into political action as a result of
some leaders’ choices within the labour movement. This has occurred in a context where
labour and labour issues are potentially less marginal than has been the case in the past.

However, it is the choice of working with the UMNO and maintaining this perceived
valued institution, or working outside and possibly undermining it, that has faced
different factions of Malaysian labour. The consequence may be that while the political
institution has survived, the labour movements’ level of mutual trust and solidarity have
been eroded, which, given the growth of the Malay working class and its dominance of
the labour movement, portends greater and more explicit political division within it.
Defeat of the oppositional elements could result in a Singapore model. Perhaps we await
the Malaysian model, or perhaps it is the model in multi-ethnic plural societies committed
to both capitalist and nationalist development. In the case of Malaysia national interest is

27
subject to contestation on material and symbolic ground and in this sense the final chapter
has not yet been written.

28
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Figure 1. The role of ethnicity in Employee Relations: Conceptual Framework

Employee Relations
Structure Process
(formal/informal)

Management Labour

State

Environment/context
History/Political
Economic
Structure
Demography
Institutions
Culture/Ideology
(meaning of nation/self)

Ethnicity
Configuration
(intra and inter ethnic)
Key
Composition/Demography
Signifying political,
economic, social and cultural Standard
practices IRS
Impact
Ethnicity
-integrating/differentiating
Impact
practices
-patterns of
consensus/conflict
-organization/institutions

33
34
i
Endnotes
The terms ethnicity and race are related but different concepts. Race as a biological concept tends to imply
differences between 'racial' although the main visible differences are accounted for by very few genes (Miles,
1989). Notions of race, therefore, act to negatively evaluate or justify unequal treatment of the defined group
(Banton and Miles, 1996). While notions of race are essentially directed at defining notions of inter-group
superiority and inferiority, the concept of ethnicity is more of an intra-group process. Ethnicity can be used to
describe a people or nation '...possessing some degree of coherence and solidarity…who are, at the least
latently, aware of having common origins and interests...' (Pieterse, 1966). In this view an ethnic group requires
a perception of common origin, but may form around issues of, language, religion, custom, etc, providing
opportunity for innumerable sub-divisions. Ethnicity thus enables a richer appreciation of situations.
ii
For instance, Hua Wu Yin (1983:10) argues that In pre-colonial Malay society, a Malay `national identity’ did not
exist… The composition of the Malay population itself was by no means homogeneous'.
iii
The 1974 Industrial Coordination Act meant ethnic groups population levels needed to be represented at all
levels of the organisation.
iv
The NEP was a series of 5 year development plans from 1971, important after the 1969 race riots, themselves
the result of perceived differences in economic status of the ethnic communities. The NEP was a major policy
instrument and it politicised ethnic identities. Its aims were to eliminate identification of economic function with
specific racial groups, eg affirmative action approach focusing on Malays, aimed to increase equity holdings of
them by economic growth and via some redistribution from 'foreign' holdings.
v
In 1929 Chinese plantation workers received around 85-90c per day compared to the 50-55c earned by
Indians, though Chinese earnings declined to 30-40c in the depression year of 1931 (Ramasamy, 1994).
vi
For instance, Nehru and other Indian leaders visiting Malaya appealed for Indian union organisation to advance
their economic position (Jomo and Todd, 1994).
vii
The acting President of the MTUC was forced by government pressure to choose between his official
involvement as supreme council member of the opposition party Semangat'46 and his MTUC position (Star, 1993).
The media and government conducted a campaign on the issue of trade union and opposition party links during
1992.
viii
Singaporean ER is based around a symbiotic relationship between organized labour and the ruling People’s
Action party (PAP). Members of each hold formal positions in the other organization. They both recognize
Singapore’s dependence on FDI and attempt to co-operate to ensure economic viability and prosperity. The role
of trade unions is defined as promoting good ER between workers and employers; improving working conditions;
and improving productivity for the mutual benefit of workers, employers, and the country. However, such a model
assumes a common identity and interest between the state and labour, which in multi-ethnic Malaysia may be
more difficult to achieve.