Diaspora Studies, 2013

Vol. 6, No. 2, 103–122, http://dx.doi.org/10.1080/09739572.2013.853441

Indian diaspora and urban poverty: a Malaysian perspective

Parthiban S. Gopal* and Premalatha Karupiah

School of Social Sciences, Universiti Sains Malaysia, Penang, Malaysia

(Received 11 April 2013; accepted 25 October 2013)

Poverty among Malaysian Indians in the urban sector has its roots, inter alia, in the exodus of
Indian labour who were mobilised within the context of the ‘world system’ to Malaya. This led
to the creation of immigrant Indian labour not only in the plantation sector but also in the lower
rungs of infrastructural development in the urban sector. However, with the launching of
the National Economic Policy, the State has attempted to increase Malay participation in the
urban area of the economy. Thus, the participation of Indian workers in these sectors of the
urban economy decreased drastically. As a result, urban Indian floating population was
located in the informal sector and in the urban poverty slum groups. Hence, the objective of
the study is to highlight some salient points with regard to the effect of Indian immigration
from India on political as well as economic policies that led to Indian poor in the plantation
sector in the beginning and subsequently urban Indian poor in Malaysia. This paper has
based its methodology solely on document research. The findings of this study would
enable ascertaining to what extent the nature of the Indian diaspora per se attributes to
poverty among the Malaysian urban Indian minority.
Keywords: Indian diaspora; Malaysian Indians; urban poverty; urban sector and NEP

Introduction
The majority of Indians1 in Malaysia are descendents of workers or labour brought from South
India by British administrators during the later part of the nineteenth and early twentieth centu-
ries.2 This great exodus of the Indians that began some 200 years ago was a direct consequence
of the Industrial Revolution that not only fuelled modern Western imperialism but also trans-
formed the global economy (Muzafar 2008). The Industrial Revolution and its aftermath in
Britain have affected Indians directly and quickly in a number of ways. One of the direct impli-
cations was a great number of Indian labourers were brought in to work as cheap labour on rubber
plantations in the then Malay States (Stenson 1980). According to Oorjitham (1988), while most
of the Indian labours were brought in to work on the plantations, a fair percentage were also
located in urban areas as labourers in other service sectors like road construction, railways, tele-
communications and port activities.
The main objective of this paper is to provide a historical background of the Indian diaspora
from India to Malaya (later Malaysia) before and after independence. The Indian diaspora before
independence is crucial as the exodus of Indian labour were mobilised within the context of the
‘world system’, which unfolds the reason for the large-scale migration of this labour force to
Malaya. The world system refers to the international division of labour that divides the world

*Corresponding author. Emails: parthie17@yahoo.com; parthi@usm.my

© 2013 Organisation for Diaspora Initiatives, New Delhi

104 P.S. Gopal and P. Karupiah

into core countries, semi-periphery countries and periphery countries. Core countries focus on
higher skill and capital-intensive production, and the rest of the world focuses on low skill,
labour-intensive production and extraction of raw materials. This constantly reinforces the
dominance of the core countries. Nonetheless, the system is dynamic, and individual states
can gain or lose the core, semi-periphery or periphery status over time. Hence, the world
system theory proposes that the poverty and backwardness of poor countries are caused by
their peripheral position in the international division of labour. Since the capitalist world
system evolved, the distinction among the central and the peripheral nations became glaring
(Wallerstein 1974, 1979, 2004). The point to be noted here is that the state of well-being of
many of the subjects of the colonised countries including the Indian poor labour in Malaya
was fundamentally the result of the world system economy (Oorjitham 1988).
This paper will further elucidate the manner of mobilisation of the Indian labour force with the
rise of monopoly capital and the launching of a new wave of imperialism, from the 1880s till the First
World War. Furthermore, these historical descriptions will illustrate how they form the basis for the
socio-economic state of the present Indians in Malaysia, which was solely in the interest of British
colonies. This paper also expounds on the historical formation of urban Indians as well as their citi-
zenship rights, the inception of which was concurrent with or even earlier than a large proportion of
them being brought in to work in the plantation sector. Finally, the paper concludes by illustrating
critically to what extent the government’s poverty-eradication policies and social-restructuring
programmes have an impact on dealing with the poverty issue among Malaysian Indians.

Migration before independence

A clear pattern of immigration began in the early nineteenth century soon after the establishment
of the Straits Settlements (S.S) by the East India Company (Ramachandran 1994). Migration from
India into Malaya took place in three phases; the period before 1895, the period between 1896 and
1930 and the period between 1931 and 1957. It is worth noting here that while the Chinese
migration into Malaya was spontaneous, the Indian migration was a well-orchestrated plan by
the British (Manikam 2009). Furthermore, at the earlier phases of the migration especially
from 1895 until the start of the twentieth century, Indian settlers in Malaya had been little
more than ‘birds of passage’ only3 (Muzafar 2008).

The period before 1895

The history of Indians in Malaya can be traced to a period much earlier than the eighteenth century.
The actual history of the Indian working class in Malaysia can be traced to the founding of Penang by
the English East India Company in 1786 (Ghee, Gomes, and Rahman 2009; Oorjitham 1988).
According to Krishnan (1936), from 1800 A.D onwards Indian labour was imported largely to
work in sugar, spice, tapioca and coconut plantations in Penang and Province Wellesley (now Butter-
worth). The Indian population also increased considerably with the traders, army personnel and per-
sonal servants of the British Administration. According to Ghee, Gomes, and Rahman (2009), the
majority were Tamil labourers recruited and controlled to meet the needs of British capital expansion
while a minority came on their own as clerical, administrative and technical assistants, professionals,
money lenders and petty traders in urban areas. In addition to this, the Penal Colony established by
the East India Company was largely made up of Indians. However, it must be noted that the majority
of these latter groups did not remain in the Malay States. It was only the Indian plantation workers
who eventually constituted the bulk of the Indian population in the Malay States (Sinnapah 1970).
During this epoch, British mercantile capitalism, which began with the formal establishment
of Penang, reached its height when the British S.S was established in 1829 (Oorjitham 1988).
 Diaspora Studies 105

With this grew the labouring population in the British S.S predominantly comprising Indians.
These trading activities led in turn to the growth of town centres. These town centres were increas-
ingly dominated by the British and other immigrant communities like the Chinese and Indians
(Sandhu 1969; Sinnapah 1970). Here the Indian labour also played an important role in the
rise of communication systems and utilities. During this era, the majority of Indian workers
came to the S.S and Malay States on a voluntary basis (Sandhu 1969). In other words, from
the beginning of the British era they formed a purely migratory element brought in by the
British for labour purposes and returning to India within a few years. Though the Indian labourers
played a prominent role in transforming Malaya from largely forests and swamps into a pro-
ductive colony, they remain impoverished victims of the exploitative imperial system (Ghee,
Gomes, and Rahman 2009).

The period between 1896 and 1930

The period between 1896 and 1930 marks the most crucial period in the history of Indian labour in
the Malay States and S.S. While the preceding section has given evidence to the existence of
Indian labour force before 1895, the numbers became voluminous in this particular period. Inci-
dentally, during this time, rubber was introduced in Peninsular Malaya in the late 1890s (Barlow
1978). Its importance grew dramatically with the rise of the motorcar and other rubber-utilising
industries like the tyre industry in the late nineteenth and early twentieth centuries (Ramasamy
1994). The international demand for rubber enabled the Malayan rubber industry to expand.
The big demand for rubber and its relatively high price fitted well with the British government’s
effort to foster the industry in colonial Malaya (Parthiban 2006). However, the most crucial of all
these measures was the bringing in of large numbers of cheap Indian labour to these plantations
(Oorjitham 1988). Sukumaran (1970) revealed that Indian labour migration into Peninsular
Malaya was the highest during this period and by 1930, Indian labour accounted for
63.1 percent of the total labour force of estates, mines, factories and government departments.
According to Oorjitham (1988), the Indian labourers were enticed by the British who showed
the availability of abundance of wealth in Peninsular Malaya. To further attract these workers,
benefits like loans for passage payments and housing were promised. At an individual level, it
is not surprising that these impoverished Indian workers perceived this offer as a means of survi-
val. Besides, the fact that the better wage differential that existed between South India and Malaya
managed to attract workers in huge numbers is merely a testimony to the desperate conditions4 of
South Indians prior to their emigration (Parthiban 2006). Hence, it provided them with much
needed source of hope to seek a better quality of life for themselves and their families in
Malaya. The economic vulnerability of the migrant workers was utilised to create a cheap
labour force, maintained within appalling working conditions. Politically too the vulnerability
of being poor and being located in a foreign land facilitated easy manipulation by the dictates
of the capital and the dominant class.

The period between 1931 and 1957

In this period the world experienced economic depression and as a result the plantation sector was
affected due to a drop in world demand for rubber. This period also witnessed the effects of the
Japanese occupation and the subsequent return of British rule. It will focus specifically on the
influence of these two processes on the Indian labour force and poverty in Peninsular Malaya.
(i) The period between 1931 and 1940. In the 1930s, the world market for rubber collapsed con-
sequent to the Great Depression (Barlow 1978). For example, between 1930 and 1932, rubber price
deteriorated by 59 percent; that is, from RM 4.70 in 1930 to RM 1.95 in 1932. This led to a
106 P.S. Gopal and P. Karupiah

7.6 percent decrease in rubber production during the same period – 456 200 tonnes in 1930 com-
pared to 421 600 tonnes in 1932. In the face of this decline in price, most estates managed to recover
their cost by imposing cuts in wages (particularly those of tappers), curtailment of maintenance
expenditures and selective tapping (Ramasamy 1994). Hence, production cost needed to be cut
and workers’ wages were reduced accordingly. When wages were further reduced, poverty
increased among estate workers (Parthiban 2013). Consequently, the Indian labour population
dropped from 206,000 in 1929 to 104,000 by 1932 (Caldwell 1977 cited Oorjitham 1988). As
many of these plantation workers were paid very low wages, thousands returned to India.
However, even during this period of depression, the plantation companies in Malaya States made
profits, while the workers were exploited by being paid very low wages, below the subsistence level.
The Japanese Occupation, 1941–1945. According to Stenson (1980) and Oorjitham (1988), with
the Second World War and Japanese occupation the economy of Peninsular Malaya came to a stand-
still. During this period, rubber was not marketable and as a result rubber production under the Japa-
nese was negligible. Only a very small percentage of estates were still functioning; hence, large
numbers of Indian workers were unemployed. The price of foodstuff shot up tremendously as a
result of food shortage. Due to this, many of the Indian workers began cultivating their food crops.
There was much internal migration from urban areas to the plantations in search of food and
employment. A considerable number of Indians died of malnutrition in this period. Many families
lost their male breadwinners when these were forced to work for the Japanese, in their reconstruction
efforts. From 1942 to 1943 more than 85,000 Indian males, particularly from the plantation sector,
were mobilised to work on the ‘Siamese Death Railway’ and only about half survived (Sandhu
1969). Lack of proper medical aid further increased the mortality rate. At this point, Indians experi-
enced hardships to an unprecedented extent and the Indian population fell by 100,000 (Stenson
1980). For the first time, Indian workers had to fend for themselves without British support.
There was much spatial mobility in search of employment and open competition with other
ethnic groups. Those who were employed by the Japanese also suffered low wages and rations.
Even with all this, about 200,000 Indian workers remained within the plantation setting (Stenson
1980). Those most affected were the Indian workers in the public sector as the work in public admin-
istration came to standstill during the war and Japanese occupation (Oorjitham 1988).5
Post Second World War. Rudner (1975) and Stenson (1980) adequately described the Post
War Colonial administration and economic policy. Rudner argues that when the Malaya States
emerged from the Second World War, both commerce and the plantation economies were
highly disrupted. The labour force was dislocated and forced to endure economic hardship like
unemployment, food scarcity and medical problems. This meant that the colonial administration,
already financially drained from the war, could not afford to restore the Malaya States to the pre-
vious level of functioning, particularly in the socio-economic field.
The burden of this fell particularly hard on labour, among which Indian labour in the planta-
tions ranked high as they were linked to one of the key economic sectors. While wages were
raised technically, the real wages remained below pre-war levels due to inflation. Although the
Indian labourers were shrinking in numbers, were undernourished and in poor health, they
helped in producing a record rubber output in 1947 (Stenson 1980). Moreover, now, the Indian
labour force which remained in Peninsular Malaya was increasingly made up of Malay-born
Indians working mainly in the plantation and public sectors (Sandhu 1969).

Migration after independence

This phase was the most important turning point for Indian immigrants who had been working
here for almost half a century. During this period, Indians were at cross-roads whether to go
back to their homeland or to become citizens of Malaysia.
 Diaspora Studies 107

The period between 1958 and 1969

During this period there was little structural transformation of the economy when compared to the
British administration. Muzafar (2008) noted that at this time, major political and economic devel-
opments that took place had significant impacts on the Malayan Indian community. With indepen-
dence, the local Malayan government was formulated in 1957. It constituted the local Malay,6
Chinese and Indian elite, committed to capital economy. Of these groups, the Malay elite predo-
minated in numbers and political power.
In this context, Indians still played a predominant role in the plantation and public sectors
although there had been a general decline over the years. In 1957, Indians still formed about 52
percent of the estate population. The majority of them were labourers. In 1965 the percentage of
labour in the gainfully employed Indian population was about 60 percent (Sandhu 1969).
However, the overall figures declined as a result of fragmentation of estates and the problem of
unemployment for about 18,000 Indians in 1965 (Sandhu 1969). Due to this, some returned to
India, while others migrated to urban centres in search of work. In sum, about 30 percent of the
Indians lived in the urban areas, engaged as traders, professionals, teachers, clerks administration
staff and menial workers in the public services, as noted by Ghee, Gomes, and Rahman (2009).
According to Oorjitham (1988), the urban Indian poor still played a dominant role in the trans-
port and communication system in this period, particularly in the railway, road and telecommu-
nication networks. However, they experienced some decline in employment with the increased
participation of Malay labour in these sectors. In 1957 for example, Indians constituted about
56 percent of the labour force in railways. This declined to less than 50 percent in 1965
(Sandhu 1969). Furthermore, the Indian municipal labour force in the country from 1957 to
1965 declined from 53 percent to 50 percent, respectively (Sandhu 1969). This clearly shows
that even though there was a decline, Indian labour still constituted the largest group in govern-
ment and quasi-government utilities, transport and communications activities during this period.

The period after 1970

The mayhem of the 1969 political crisis resulted in many structural changes in the economic
sphere (Goh 1971). One of the first moves of the new post-May 13, 1969 regime headed by
the second Prime Minister of Malaysia, Tun Abdul Razak, was an exercise to reduce the
number of foreigners employed in the country so that more jobs would be available to Malaysian
citizens, particularly those living in the rural areas (Muzafar 2008). Ensuing from that, the most
significant government initiative in this period was the New Economic Policy (NEP) in 1971 to
restructure society and eradicate poverty irrespective of racial background. The NEP was also
sought to increase Malay participation in all sectors of the economy, leading eventually to the cre-
ation of a Malay industrial and commercial community (Second Malaysian Plan 1971).
In order to facilitate this, industrialisation of an export-oriented nature was set in motion.
However, the pattern of industrialisation was heavily dependent on foreign capital, and this
was detrimental to the real interests of labour. According to Oorjitham (1988), the increasing
role of Indian labour particularly in this sector is of importance in this period. Nevertheless,
the Indian workers in the sector were characterised by low participation rates, low incomes,
low mobility and high competition. In other sectors of the economy, particularly the public
sector related to utilities, transport and communications, there was increased marginalisation of
Indian workers as a result of the pro-Malay policy.
Therefore, with the introduction of the NEP, the role of Indian labour began to gradually
decline in both plantation and urban sectors of the economy (Anbalakan 2003). However,
Indian labour still continued to play an important role in the plantation sector.7 It was the
urban Indians who were badly affected by the NEP due to increased Malay participation in the
108 P.S. Gopal and P. Karupiah

public sector (Oorjitham 1988). There was also some form of Indian migration from the plantation
to urban areas in search of better employment opportunities (Kok 1985; Manikam 2009;
Muzafar 2008). The increasing growth of the export-oriented industrial sector further absorbed
unemployment of Indian labourers, who were previously employed in the plantation and
public sectors.
This period further saw the expansion of the informal sector (Kamal 1982 cited Oorjitham
1988). The sector was forced to grow as a result of a great decline in formal employment and
income opportunities, particularly for the Indian and Chinese labour groups (Oorjitham 1988).
Thus, generally in this period Indian labour began to lose its original position of predominance
in both plantation and urban sectors.
During this time, there was also further urbanisation growth, industrialisation, privatisation
and the trend towards globalisation which left deep marks on the Indian community in various
ways. However, the communal dispensation at the national level still persisted together with a
high level of factionalism within the Indian community. Muzafar (2008) noted that the Malaysian
Indian Congress continued to play its role as the community’s nominal spokesman. Similarly the
trade union movement continued its role as middleman with a distinct tilt in the direction of man-
agement rather than labour (Ramachandran 1994; Ramasamy 1994). The strong tradition of
dissent and the championing of alternative points of view also persisted – vocal, articulate and
relevant to many aspects of the Indian community’s problems but with no obvious likelihood
of being able to affect change within the short term (Muzafar 2008). In other words, essentially
the composition, structure and major problems of the Indian community remain very much the
same in the twenty-first century as they were on the eve of independence in 1957 (Muzafar 2008).

Problems of citizenship for Indians in Malaya

The history of citizenship issues among Indians in Malaysia predates the Independence of Malaya
in 1957. In 1920 and 1927 the emerged leaders of the Straits-born Chinese and Indian professional
men and journalists led their respective communities in the political arena for equality of status in
the Malay States (Manikam 2009). Not only were they aware of the Indian labour exploitation but
they also understood the hardship of the Indians in Malaya who were refused citizenship and
equal rights. It must be noted that the Indians who were deprived of citizenship would not
only be generally exploited for being an immigrant labour but would also face economic depri-
vation as well due to low wages. Ensuing from the low wages or income they were eventually
relegated to a state of acute poverty as they were not entitled to the rights and privileges of citizens
of the nation.
Consequently, it brought about the intervention of the Indian Government through the Central
Indian Association of Malaya (CIAM) with regard to the fundamental right to citizenship of
Indians in Malaya. By the year 1939, apart from wage issues, CIAM demanded that Indian
labourers in Malaya be accorded full civil rights and treated equally as their Malay and
Chinese counterparts. Meanwhile, Sastri (1937) in his survey opined that on the vital issue of citi-
zenship, the Indians in Malaya should participate in the local political arena and not be emotion-
ally bound with political developments in India. He pointed out that in order to gain citizenship,
they must show proof of their allegiance to Malaya. However, the Malayan government did not
budge on the issues of wage increase, rights and citizenship of Malayan Indians.
After the defeat of the Japanese by the British in 1945, the British Government in Malaya
established the Malayan Union Constitution. The new set-up was a ruse by the British to
assume control of Malaya in the post-war period. While the Malayan Union Constitution prom-
ised citizenship to the Chinese and Indians, real democratic participation in Government was
never envisaged. The Malay elites and the aristocrats, nevertheless, were uncompromising in
 Diaspora Studies 109

their stand on citizenship rights to the non-Malays. When the British realised the importance of
Malay support to stem rising radicalism of non-Malays, they quickly dropped the idea of Malayan
Union. Instead they proposed a new constitutional framework known as the Federation of Malaya
(FMA) constitution in 1948. In the meantime, the non-Malay radicals formed the All Malayan
Council of Joint Action in 1946, which refused to accept the FMA constitution proposal as it con-
tained, inter alia, stringent rules on citizenship for non-Malays (Manikam 2009). The provisions
for citizenship under the FMA that replaced the Malayan Union constitution in 1948 swung back
in the other direction, and denied eligibility for citizenship to a large number of non-Malays
including, of course, Indians (Muzafar 2008)
The FMA, through its constitution, guarantees the rights and special position of the Malay
people as well as rights, powers and sovereignty of the Malay rulers in their respective states
(FMA [1948] 1952). Then in 1952, against the background of local elections, the citizenship
rules were revised once more, and contained concessions that made about 60 percent of the
Malaysian Indian community eligible for citizenship, including almost a quarter of a million
who were now entitled to it automatically (Muzafar 2008). Finally, according to the terms of
the new Malayan constitution that came into effect with the achievement of independence in
1957, all those born in the country on or after Merdeka Day automatically became citizens by
operation of law.8 Having stated that, even though local Indians were assured of their stake in
the nation and of their eligibility to take part as Malaysian citizens in its public affairs, a large
section of the Indian community, mainly from the working class, failed to take advantage of
this opportunity, with results that were to prove quite disastrous for many of them later. According
to Suryanarayan (1982) by 1969 only about 80 percent of the Indians in Malaysia had taken up
citizenship while the remaining 20 percent (largely plantation labourers) effectively remained
‘non-citizens’ despite the fact that all of them had residential qualifications to become citizens.
This is mainly due to the fact that the Indian leaders did not play an effective role in assisting
workers to get citizenship (Manikam 2009). They did not effectively raise the issue in Parliament
or warn workers that fence-sitting could jeopardise their citizenship rights.
Even today, the issues of citizenship and stateless Indians still prevail. Currently, the country’s
official statistics show that 9000 Indians are still unregistered as citizens or stateless in Malaysia
(Izwan 2012). Nevertheless, this finding is in contradiction to another source which claims that
300,000 Malaysia-born Indians are stateless because they were denied citizenship papers by
the local authorities (Surendran 2013).
According to Surendran (2013), ironically a majority of stateless Indians are born here and
their forebears have lived in Malaysia for generations; they are already citizens by operation of
law and can also communicate fluently in Bahasa Malaysia. He noted that they are stateless
because the National Registration Department under the Home Ministry’s directions has
thrown up a wall of bureaucratic and unreasonable conditions against stateless Indians who
apply for blue Mykads.9 It must be noted that being stateless or without citizenship rights deprives
an individual of well-being in so many ways particularly poverty of empowerment, employment
and various other dimensions of poverty. In the same vein Senator (2012) asserted that Indians
and Chinese born in Malaysia with a slightest error such as those born in estate without a birth
certificate are given red identity cards. They have to get documents from penghulu (village
chief), midwives, father’s and mother’s death certificates, siblings’ identity card copies etc. to
prove beyond doubt that they are Malaysians. Estate workers who are poor and ignorant
cannot provide all documents and they end up living with red identity cards. These card
holders do not get as welfare, hospital support, proper employment, education and they cannot
vote.
Similarly in another scenario, in the case of a child born whose one parent is a foreigner
(Indian rubber tapper), the registration department classifies the child as illegitimate as the
110 P.S. Gopal and P. Karupiah

marriage of the parents was registered in Malaysia after the child’s birth. Even though both mother
and father had their wedding registered in the country of the mother’s origin, these so-called ‘ille-
gitimate’ children cannot get their Malaysian citizenship under the Citizenship Act. This child
will have difficulty in enrolling for schools. If they are Muslims the registration department
will write down the father’s name as Abdullah and the child will be classified as legitimate
(Senator 2012).

Urban Indians and poverty in peninsular Malaysia

The history of the urban Indians, particularly the labour class, is closely linked to urbanisation and
industrialisation in Peninsular Malaysia (Muzafar 2008). The participation and distribution of
Indians in this two inter-related processes is detailed within a historical perspective and presented
in relation to the other two major ethnic groups.10 As discussed earlier (Migration before indepen-
dence), the patterns of urbanisation and industrialisation are viewed in conjunction with the devel-
opment and functioning of the ‘World System’ (Oorjitham 1988). This will involve a presentation
of basic trends both in Colonial and Post-Colonial Peninsular Malaysia, culminating in the con-
temporary period. The role of the State is specially highlighted vis-a-vis the process of urbanis-
ation and industrialisation in these varying periods.
The spread of Indian settlement in Malaya has been closely linked with the pattern of econ-
omic development in the country set in motion by the British (Sandhu 1969). The initial trickle
turned to mass movement from the 1830s, comprising two groups of Indians. While most of the
Indian11 labourers were brought in to work on the plantations, a fair percentage were also located
as labourers in other service sectors like road construction, railways, telecommunications and port
activities. Many of this latter group of labourers were located in urban areas (Ghee, Gomes, and
Rahman 2009). Thus from the early colonial period, Indian labourers were located in both the
plantation and urban sectors in the Malaya States and the S.S.
From Table 1 it is evident that after 1930, the World Economic Depression and the Second
World War caused a decline in the number of Indian urban dwellers.
During this period many returned to India and others died during the Japanese Occupation.
Still others migrated from urban to rural areas in search of free land where food crops could be
planted. After the Japanese Occupation, only about 21,000 Indian rural dwellers moved to
New Villages 12 because most of them were located on plantations (Sandhu 1969). However,
at the same time the problem of fragmentation of estates resulted in unemployment. Among
these groups of unemployed Indian workers and their dependents, some returned to India
while others migrated to urban centres as poor residents. Hence, these former plantation commu-
nities migrated to urban fringes in search of employment and shelter, and merged with the urban

Table 1. Racial composition of the urban population of Malaya, 1911–1957.

Percentage
Year Total urban population (000’) Chinese Indians Malays Others
1911 608 65.0 12.9 17.8 4.3
1921 921 66.6 13.8 16.0 3.6
1931 1284 65.4 14.8 15.9 3.9
1947 2054 68.3 11.4 17.4 2.9
1957 3709 67.1 10.4 19.3 3.2
Source: Sandhu (1969).
 Diaspora Studies 111

Indian poor in squatter areas. Alternatively, they formed new squatter settlements or urban slum
areas on disused mining land, government reserve land along railway lines or other vacant state
land in the new towns. They were drawn to this place because of the numerous factors and com-
mercial establishments in the vicinity where they could find employment as menial workers,
drivers, security guards, gardeners, grass cutters, cleaners, restaurant helpers and street
hawkers (Ghee, Gomes, and Rahman 2009).
Furthermore, after eviction from the plantations the poor Indians also face new challenges as
they come in contact with Malays in large numbers and compete for space in public low-cost
housing schemes in the urban area. They also have to deal with a predominantly Malay bureauc-
racy, especially law enforcement agencies and local councils which determine poor individual’s
accessibility to low-cost housing and employment opportunities. According to Ghee, Gomes, and
Rahman (2009) the bureaucracies are perceived to be unsympathetic to the Indian situation or are
covertly racist in their actions. The difficulties of poor Indians are compounded by their low level
of education and little knowledge of their rights and bureaucratic procedures and regulations.
With these disadvantages they are unable to communicate their problems effectively to the rel-
evant government agencies which tend to ignore Indian grievances, leading to further victimisa-
tion of their poor state in urban areas as well.
By 1957, more than 38 percent and 43 percent of Indians were in urban centres of 2000 and
5000 or more persons, respectively (Sandhu 1969). The Indians were second only to the Chinese
as the most important category of urban dwellers. Approximately 52 percent of the urban Indian
population in 1921 and 57 percent in 1957 were located in large urban centres (Sandhu 1969).
Within these urban centres, the majority of Indians were from labouring class, servicing the gov-
ernment. As such they were located in specific areas in the urban settings ear-marked as ‘labour
lines’. These formed the Indian-dominated areas of settlement (Oorjitham 1988).
These urban enclaves of Indian labour concentration were usually physically located away
from the British and other elite groups who dominated the urban centres. The distance
between the location of these Indian workers from the centre was dependent on their social
status. The Indian workers were located in peripheral areas when compared even to the
Chinese. The occupational, social and regional discrimination of Indian labour in urban centres
persisted in the same pattern even after Independence in 1957. Nevertheless, the increased partici-
pation of other ethnic groups in the urban sector, particularly the Chinese, slightly reduced the
Indian identity of these enclaves (Oorjitham 1988). Furthermore, with the introduction of the
NEP in 1970, there was increased Malay participation in all sectors of the urban economy
especially in the government sector (Anbalakan 2003). Thus, the previously Indian-labour-domi-
nated sectors like public services, transportation, telecommunications and utilities became differ-
entiated in terms of ethnic profile.
Subsequently, many of the Indian enclaves in urban areas began to be exposed to a
multi-ethnic tone with the increased participation of Malay labour. These trends nevertheless
led to an overall increase in participation of Indian labour in the urban sector although in
reality this labour force was less concentrated in particular sectors of the urban economy,
like in colonial times (Oorjitham 1988). Hence, the more dispersed nature of the urban
Indian labour force in terms of both occupation and settlement characterised this period.
Based on the 1970 census data, it was estimated that there were 942,944 Indians in Malay-
sia, of which 932,629 were in Peninsular Malaysia. Of this total, in Peninsular Malaysia,
323,435 or 34.7 percent of the Indians were located in urban areas (Table 2).
The proportion of all three ethnic groups has increased steadily from 1970 to 2010. However,
the Chinese predominated in urban areas at least till the 1980s, followed by Malays and Indians
(Table 2). After the 1990s the Malays have predominated the urban population vis-a-vis other
ethnic groups. Table 2 indicates that the urban Indian population has risen steadily. Prior to the
112 P.S. Gopal and P. Karupiah

year 2000, larger proportion of Indians lived in rural areas (e.g. rubber and palm oil estates) but
after the year 2000, larger proportion of Indians have moved to the urban areas, thus making urban
poverty a very critical issue among Malaysian Indians. These rising figures particularly after the
1980s can be attributed to the growing role of Indians in the industrial sector in Peninsular Malay-
sia (Oorjitham 1988).
Besides the public sector employment in urban areas, the ro1e of the Indian in the primary,
secondary and tertiary sectors is also discussed based on two perspectives. First, only the
Indian employment pattern from 1931 to 1965 (Table 3) and second, the employment pattern
of Indians on the whole by ethnic group in Malaysia from 1957 to 2005 (Table 4).
According to Sandhu (1969), before 1957 the position of industries was minimal. As a result,
labour participation in this sector was also minimal. Even the role of Indians in industries had been a
minor one before independence. During this period, Indian labour in the industrial sector was
located mainly in mining, quarrying and small-scale manufacturing industries (Table 3).
The British preferred to employ Indian workers because they were cheaper, loyal and helped
to break the monopoly of Chinese workers (Stenson 1980). In 1902, smelting units (tin industry)
were established in various ports like Singapore and Penang. In 1957, about a thousand Indians
were employed in these sectors (Sandhu 1969). Nevertheless, the participation of Indians in tin
industry was minimal compared to the Chinese.
In 1957, 53 percent of the Indian labourers were employed in the coal production industry
(Sandhu 1969). However, this declined drastically after the demand for coal fell with the
increased use of petrol for railways in Peninsular Malaysia. Indian labour also dominated the gov-
ernment stone and earth quarries. However, even in this sector the numbers declined after
independence.
The manufacturing sector in Peninsular Malaya prior to 1957 concentrated on processing
primary products and foodstuff for local consumption. In 1947, less than 10 percent of those
employed were in manufacturing activities (Del Tufo 1949), and in 1957 about 13 percent were
located in that sector (Fell 1960). The Indians in this sector accounted for less than 15 percent of
the 312,000 persons involved in 1957, whereas the Chinese accounted for 67 percent (Sandhu 1969).
All these trends indicated that the participation of Indian labour in the industrial sector was
truly minimal before 1957 when compared to other ethnic groups in Peninsular Malaya. By
1965 the participation of Indians in the mining, quarrying and manufacturing sectors had declined
while that of Malays had increased. Though the percentage for Chinese had also decreased, they
still constituted the major industrial workforce in 1965 (Sandhu 1969).
In 1970, the percentage of Indians in the production sector was 8.6 percent while that of the
Chinese was 59.9 and the Malays was 31.1 percent. This marked a decline of 2.4 percent for the
Indians in this sector, when compared to 1965. The Chinese still constituted the majority of the
industrial workforce, with the Malays second in line at this stage (Sandhu 1969).
However, by 1980 after 10 years of the implementation of the NEP, Malay participation in the
production sector increased dramatically to 45.4 percent while that of the Chinese fell to
42.6 percent, thereby drastically reducing the Chinese monopoly (Oorjitham 1988). The partici-
pation of Indians in the production sector increased slightly to 11.4 percent (Oorjitham 1988).
According to Oorjitham (1988), this increase in Indian participation in the production sector
occurred due to a number of factors. First, export-oriented industrialisation based on multinational
companies generally required greater labour force participation. Second, there was much
migration from the plantations to the urban industrial sector in search of employment. Third, a
large percentage of unemployed Indian workers from the public sector filtered into the industrial
sector. Fourth, the increased participation of Indian women in the industrial sector, particularly in
the electronics industry, further raised the Indian percentage in this sector. Finally, the growing
numbers of Indian poverty groups in urban areas themselves provided members for the industrial
Table 2. Population of urban and rural ethnic groups in Peninsular Malaysia, 1970–2010.
1970 1985 1990 2000 2005 2010

Diaspora Studies
Urban Rural Urban Rural Urban Rural Urban Rural Urban Rural Urban Rural
Community areas areas areas areas areas areas areas areas areas areas areas areas
Malays 699.4 3986.5 2199.7 5125.9 2976.2 5516.8 7307.2 4478.6 8307.4 4879.0 9410.1 5339.3
Chinese 1479.2 1643.1 2516.4 1732.0 2848.7 1730.5 3572.3 2189.4 3883.6 2280.9 4160.1 2360.5
Indians 323.4 609.2 570.9 741.0 662.4 778.7 1051.6 644.5 1155.5 678.7 1 256.4 712.9
Others 28.4 41.1 39.4 43.5 39.9 52.0 170.3 104.4 198.2 116.4 221.8 125.9
Total 2530.4 6279.9 5326.4 7642.4 6527.2 8078.0 1057.6 7416.9 13,544.7 7955.0 15,048.4 8538.6
Source: Second Malaysia Plan (1971), Third Malaysia Plan (1976), Fourth Malaysia Plan (1981), Fifth Malaysia Plan (1986), Ninth Malaysia Plan (2006) and Tenth Malaysia Plan (2011)
and Census Data.

113
114 P.S. Gopal and P. Karupiah

Table 3. Occupational grouping of the Indian population in Malaya, 1931–1965.

Percentage
Occupational group 1931 1947 1957 1965
Agricultural pursuits 60.6 43.4 47.4 45.0
Mining and quarrying 1.8 1.7 1.8 1.0
Manufacturing 2.0 4.9 10.3 10.0
Transport and communications 8.0 5.9 6.2 6.0
Commerce and finance 5.6 10.1 13.4 16.5
Services 21.0 23.1 19.9 19.5
Other and indeterminate occupations 1.1 0.9 1.0 2.0
Source: Sandhu (1969).

Table 4. Employed population by sector and by ethnic group in Malaysia, 1957–2005.

Sector and year Bumiputera Chinese Indians Total
Agriculture
1957 60.2 24.9 14.0 100
1970 68.0 22.0 10.0 100
1991 72.3 15.4 7.3 100
2005 82.2 12.3 4.3 100
Industry
1957 26.6 59.1 12.6 100
1970 31.0 59.0 9.0 100
1991 50.4 34.6 11.9 100
2005 58.4 28.1 11.3 100
Manufacturing
1957 19.6 72.0 7.5 100
1970 29.0 65.0 5.0 100
1991 52.2 31.5 13.3 100
2005 58.2 28.1 12.8 100
Services
1957 31.6 45.1 16.4 100
1970 39.0 47.0 13.0 100
1991 56.6 33.8 7.4 100
2005 60.7 31.2 7.0 100
All sectors
1957 47.3 35.7 14.5 100
1970 52.0 36.0 10.0 100
1991 57.3 30.7 8.9 100
2005 62.6 28.2 8.2 100
Source: Leete (2007).

workforce. Nevertheless, according to Oorjitham (1988) the majority of these Indian industrial
workers were located in the lowest rungs of the industrial set-up, where they were further
exploited by the capital and subjected to much socio-economic hardship.
On the whole, however, by comparing the employment pattern with other ethnic groups
(Table 4) it is found that the Indians’ involvement in the agriculture sector has dwindled drasti-
cally from 14.0 percent (1957) to 4.3 percent (2005) in comparison to Chinese from 24.9 percent
(1957) to 12.3 percent (2005). In contrast the Bumiputera community’s involvement is high, that
is, from 60.2 percent (1957) to 82.2 percent (2005). Even in the industrial sector Indians’
 Diaspora Studies 115

employment rate has declined proportionately (from 12.6 percent in 1957 to 11.3 percent 2005)
vis-a-vis the Chinese that has declined drastically as well but at a lesser rate (from 59.1 percent in
1957 to 29. 4 percent in 2005). On the contrary the Bumiputera’s employment rate has increased
from 26.1 percent (1957) to 58.4 percent (2005). Even in the manufacturing and service sectors
only the Bumiputera community are having increased employment rates in these sectors in com-
parison to the Chinese and more so among the Indian community who are having a drastic declin-
ing rate. Finally, based on all sectors of employment (Table 4) among the ethnic groups, the
Indians seem to have a very acute reduction in the country’s employment rate (from 14.5
percent in 1957 to 8.2 percent in 2005) compared to the Chinese (from 35.7 percent in 1957 to
28.2 percent in 2005). But as far as Bumiputeras are concerned they seem to have a very
soaring rate in all sectors from 47.3 percent in 1957 to 62.6 percent in 2005.
Hence, based on the analysis above it can be deduced that the NEP has restricted employment
opportunities for non-Bumiputeras, especially the Indians, to a considerable extent in all sectors,
particularly in public sectors which are dominated by the Bumiputeras. Consequently, this depri-
vation of employment opportunities is one of the crucial causal factors of poverty among the
Malaysian Indians in general and urban poverty in particular.
Similar trends occurred during the post-2005 era among the Indian labour force in the
urban area. Furthermore, a fair number of Indian poor who were particularly located in poor
urban slum settlements were involved in informal sector activities to eke out a living, due to per-
petual restriction in the employment market in both public and private sectors (Muzafar 2008).
In another development Ghee, Gomes, and Rahman (2009) elucidated that while macro
national poverty indices show that the Indian community is relatively better off, a micro urban
poverty study carried out in southern Kampong Medan revealed a contrasting scenario (Tables
5 and 6). He also added that the inconsistency arises because poverty is a multidimensional
phenomenon and the use of household income as an indicator is problematic since it does not
include other factors such as institutional support, employment and housing status. Second, in
the urban slum areas, such as in the low-cost high-rise flats context, several families displaced
from the plantations would share houses because of scarcity and to save on costs. Hence the
household income would be inflated and not reflect individual family accurately.
According to Sulochana (2007), the Indian community in urban areas in Malaysia currently,
which ranks as one of the poorest groups in the urban sector, has its roots in the plantation
economy from which many Indians originate. The environment in the plantation is hardly condu-
cive for attaining a decent education or acquiring critical skills that are needed in the modern
sector of the economy, and has pushed many of these Indian labours to migrate to urban areas.
Sulochana (2007) and CPPS (n.d) argued that poverty becomes a way of life and when the

Table 5. Incidence of poverty and hardcore poverty by ethnic group 1999 and 2004: macro perspective.
1999 2004
Bumiputra Chinese Indians Bumiputra Chinese Indian
Hardcore poverty 2.9 0.2 0.3 1.9- 0.1 0.3
Urban 0.7 0.1 0.2 0.7 Neg 0.2
Rural 4.4 0.4 0.5 3.3 0.3 0.5
Overall poverty 12.4 1.2 3.5 8.3 0.6 2.9
Urban 5.1 0.8 2.4 4.1 0.4 2.4
Rural 17.5 2.7 5.8 13. 4 2.3 5.4
Poverty gap 3.3 0.2 0.7 2.1 0.1 0.6
Source: Ninth Malaysia Plan (2006).
116 P.S. Gopal and P. Karupiah

Table 6. Kampung medan urban poverty study, 2006 (percentage): micro perspective.
Malay Indian
Consuming lower-quality foods due to low income 25 45
Getting into debt to pay basic living cost 13 30
Loss of job 1 11
Social problems involving children 4 21
Problems in dealing with government agencies 37 51
Source: New Straits Times (14 May 2007) cited in Ghee (2009).

plantation economy gives way to development projects, the estate labour force is displaced and
migrates to urban areas joining the ranks of other urban poor and lives in urban slums. These dis-
placed people with low levels of education and skills are largely unemployable. They not only
find themselves competing with foreign workers for low-paying jobs but also competing in infor-
mal sector activities to earn a living, thus perpetuating their cycle of poverty.

Government poverty alleviation policies for Indians: a macro perspective

The thrust of poverty eradication measures and policies in Malaysia has its basis in the country’s his-
torical roots. An interesting aspect of Malaysian economic history has to be understood in order to
appreciate the context within which the State interacts with the social dimension. Malaysia has had
the historical practice of segregating economic activity along racial lines, a practice that was intro-
duced by the British under their colonial rule of Malaya (pre-1957) (Ariff and Shankaran 2005).
In this regard, it should be mentioned that the magnitude of poverty was not widespread prior
to Malaysia’s independence. In the beginning, poverty was most prevalent in the rural sector of
the states in Malaysia. Until the end of the 1970s, the main subjects of poverty were small paddy
farmers and coconut, palm oil and rubber smallholders. Small fishermen and artisans were also
victims of poverty. Furthermore, according to Ariff and Shankaran (2005) there was an ethnic
and sectoral bias to poverty and more than that was the increasing inequality gap as well as econ-
omic segregation between groups of income earners of the three major races (the Malays, Chinese
and Indians).
Incidentally, prior to 1950 (during the British Colonial Governance) there was/were no plan-
ning/policies pertaining to poverty alleviation in Malaysia (Jamalludin 1991). In the same vein,
Abdul Aziz (1975) asserted that the main cause of poverty before independence was neglected
by the British Government. The British Government in Malaya then were only interested in
exploiting the local resources for the sole progress of wealth of Great Britain. It was in 1950
that the first planning document was introduced in the form of the Draft Development Plan (some-
times known as Yellow book). In 1956 the First Five year plan was introduced followed by the
Second Five year plan in 1961. However, these plans were neither comprehensive nor adequate,
particularly policies with regard to the poverty alleviation programme.13
A decade after independence, the 1969 elections resulting in the 13th May crisis brought about
dramatic changes in the role of the state in Malaysia (Goh 1971). Ensuing from this incident, con-
stitutional amendments were introduced which among others made it illegal for anyone to question
the special position of Malays (Oorjitham 1988). The NEP [NEP (1971–1990)], which was one of
the outcomes of this amendment, was launched through the Second Malaysia Plan (1971–1975)
with the basic aims of eradicating poverty and restructuring society, regardless of race (Chamhuri
2007). However, in practice, this affirmative policy was deemed pro-Malay vis-a-vis other ethnic
groups, particularly the ethnic minority Indians (Roslan 2003; Sulochana 2007).
 Diaspora Studies 117

During the implementation of the NEP, the state itself began to take on a more dynamic role in
the process of capital accumulation and distribution of surplus wealth (Oorjitham 1988). These
economic plans reflected a high concentration on infrastructural developments, agricultural diver-
sification and rural development to aid the Malay peasantry (Anbalakan 2003). Nevertheless, little
change was brought to the plantation sector and poverty continued for the majority of the Indian
workers (Anbalakan 2003). Therefore, realising the lack of opportunity in the plantation sector
and educational opportunities, there was an increase in upward mobility (migration from the
rural to the urban areas), especially for the second generation of Indian plantation workers
(Muzafar 2008).
As the implementation of the NEP progressed it was apparent that there was no proper
headway being made to alleviate poverty among the Indians (Jomo 2007; Sulochana 2007). In
the same vein, Ghee, Gomes, and Rahman (2009) pointed out that even in the building of low-
cost terrace houses to relocate Malay (Bumiputera) squatters in interior areas, the older Indian
squatter settlements such as in Kampung Gandhi and Kampung Muniandy along Jalan Kelang
Lama, Selangor, have been ignored. This neglect and sense of deprivation created further escala-
tion of poverty in urban slums among the Indians.
Having said that however, according to Ghee (2009), though there were instances where the
government has opted to resettle squatters and other urban poor Indians in cheap high-rise flats,
the problem of poverty still remains. While this policy ensured that more people, particularly the
poor Indians from the urban squatters, were allocated flat units, new problems emerged with con-
centrated poverty, cramped living conditions and lack of recreational facilities in these residential
estates. These places gradually turned into ‘high-rise slums’ perpetuating a culture of poverty and
social alienation among them. Besides, among the related problems are underachievement in
schools, high dropout rates, juvenile delinquency, petty thefts, vandalism and lack of civic
culture. Hence, ensuing from this spill-over of problems, the cycle of poverty has perpetuated
among the urban Indians till today.
The launching of the NEP also has attempted to increase Malay participation in the urban
sector of the economy, particularly the public sector (Manikam 2009). Consequently, Indians’
employment opportunities are sidelined (Mazumdar 1981).
Thus the participation of Indian workers in this sector of the urban economy decreased dra-
matically. As a result of this decrease of Indian workers in the public sector and increase in in-
migration of Indian workers in the urban sector, a floating population of Indian workers grew
in the urban sector (Muzafar 2008). Add to this the decreasing role of Indian petty merchants
who were located in the urban areas, with the rise of Malay participation in the urban commercial
sector (Oorjitham 1988).14 The question then arises as to where this floating urban Indian popu-
lation is to be channelled? It follows therefore that the majority of this urban Indian floating popu-
lation would be located in the informal sector and in the urban poverty groups. Thus, this group
will eventually constitute the most economically depressed community in the urban area by living
as squatters (Oorjitham 1988).
When the National Development Plan [NDP (1991–2000)] was introduced to replace the NEP
in 1991, it still retained absolute poverty eradication and reduction of relative poverty as impor-
tant objectives, focusing on the eradication of hard-core poverty and the reduction of relative
poverty. Nevertheless, the Indian community by and large had not gained equitable access to
economic opportunities even under the NDP (Anbalakan 2003; Sulochana 2007).
Under the Third Outline Perspective Plan, OPP3 (2001–2010), the objectives of the distribu-
tional agenda are emphasised through the National Vision Policy [NVP (2001–2010)] which
essentially maintains the basic thrust of poverty eradication and societal restructuring of the
NEP and that balanced development of the NDP. The NVP under OPP3 acknowledged that cor-
porate equity ownership among Indians was low and indicated that efforts would be undertaken to
118 P.S. Gopal and P. Karupiah

increase Indian equity ownership to 3 percent by 2010 (Ninth Malaysian Plan 2006). At the same
time, the government agreed to undertake a study to review the status of Indian participation in the
economy in order to formulate appropriate strategies and programmes (Ninth Malaysian Plan
2006). However, ironically no explicit financing arrangement was mentioned in the plan for
the Indian community to increase its participation in the corporate sector.
As far as ownership and control of corporate wealth (Table 7) are concerned the Chinese have
dominated (from 27.2 percent in 1970 to 39.0 percent in 2004) among the Malaysian ownership
groups, followed by the Bumiputeras (from 2.4 percent in 1970 to 18.9 percent in 2004). The
Indians merely hold ownership from 1.1 percent in 1970 to 1.2 percent in 2004. Hence, the official
data show in terms of ownership of wealth that the vast majority of Indians are also left out from
the mainstream economic progress and in the event of any economic shock (both internal and
global) the already-marginalised poor Indians would be further relegated to abject poverty.
As of now, though there is a pattern of repeated advocacy of old proposals and recommen-
dations, the extent of the community’s marginalisation and the failure of the country’s develop-
mental machinery to respond to long-standing grievances and shortfalls in meeting the basic
requirements of the Indian poor are still reflected. Thus, Malaysia has reached a defining phase
in its development path with regard to poverty alleviation programmes for the Indians and
with the benefit of the hindsight, poverty in Malaysia can no longer be addressed in the same
way as it has been done in the past. This is clearly exemplified in the recently launched New Econ-
omic Model (NEM) which provides the policy framework for Malaysia to move from a middle-
income to a high-income nation by 2020 (NEAC 2009).
Furthermore, based on the NEAC’s (2009) report, the recently launched NEM appears to have
the required characteristics such as a policy framework with its emphasis on inclusiveness of the
bottom 40 percent of the population in the development process and the recognition that excessive
focus on ethnicity-based distribution of resources contributes to growing separateness and dissen-
sion. The NEM also recognises that not having the opportunities to benefit from economic progress
breeds resentment within marginalised groups in the urban and rural areas. The NEM incorporates a
new approach to development which it defines as inclusive and sustainable growth, which is pro-
poor and concerned not only with the level but also the effect of persistent inequalities along
ethnic lines class, occupation, age, regional location on economic growth, a paradigm shift from
absolute poverty to relative poverty and inequality and poverty alleviation (NEAC 2009).
However, a key challenge of this inclusive growth in Malaysia is the design of effective measures
that strike a balance between the special position of the Bumiputeras and legitimate interests of

Table 7. Ownership of share capital (at par value) of limited companies in Malaysia, 1970, 1985, 1990 and
2004 (per cent).
Ownership group 1970 1985 1990 2004
1. Malaysian residents 36.7 74.0 74.6 67.5
(i) Bumiputera 2.4 19.1 19.3 18.9
Individual and institution 1.6 11.7 14.2 17.2
Trust agencies 0.8 7.4 5.1 1.7
(ii) Other Malaysian residents 28.3 47.7 46.8 40.6
Chinese 27.2 33.4 45.5 39.0
Indians 1.1 1.2 1.0 1.2
(iii) Nominee companies 6.0 7.2 8.5 8.0
2. Foreigners 63.4 26.0 25.4 32.5
Total (RM million) 5329.2 77,964.4 108,377.4 529,768.7
Sources: Leete (2007).
 Diaspora Studies 119

different ethnic groups, particularly the minority ethnic group, who have been left behind in the
mainstream economic well-being of the country (Sulochana 2010). But having said all that, the con-
sequences of this current policy are yet to be seen and produce and manifest results.

Conclusion
The Indians in Malaysia currently have become permanent and legitimate citizens of the country
unlike many who were mere birds of passages before independence. Hence any form of failure
by the affirmative policies to address the problems of the Indian poor is deemed a violation of
basic human rights. There are few signs that this severe social ill (poverty) in particular can ever
be overcome for the Indians within the framework of the present political set-up in Malaysia. At
the time of the affirmative policies (NEP, NDP and NVP) from 1970 till 2010, the pro-Malay
approach of economic policies with regard to the poverty alleviation programme appeared to be –
and probably was – the only practical way to restructuring society so as to mitigate the unequal econ-
omic gap among the various ethnic groups, since the Malay formed the highest number among the
poor in this country. However, 50 years and one and half generations later, the social chemistry has
changed, and class or special group interests are beginning to replace those of race as the determi-
nants of poverty problems. Hence, it is becoming increasingly obvious that these social problems
can only be overcome by a concerted national effort that is not based on race. Bearing this fact in
mind, the Indian community’s socio-economic problems (currently, urban poverty in particular)
can never be overcome within the communal mould of Malaysian politics.

Notes
1. It is worth noting here that the mention of Indian by all means refers to the labour or working class or
immigrant labour.
2. Sinnapah (1970) in his book traces back the naval expedition of Indians into ports on the east and west
coasts of Malaya as early as the eleventh century. At this time, Indians frequented Kedah, Melaka, Pro-
vince Wellesley and Singapore.
3. These early Indian migrants in Malaya were transient migrants, scattered and isolated from one another
and without cohesion.
4. The one significant advantage to work in Malaya was that it was continuous (about 25 days a month)
compared to the highly seasonal nature of work available in South Indian agriculture. Besides, famine
and natural calamity conditions were also the push factors of the early Indian diaspora (Satyanarayana,
2001).
5. During the pre-war and Colonial periods administration jobs were mainly occupied by the educated
Indians.
6. The Malay ethnic group is also known as the Bumiputra (sons of the soil) and is the native of the
country. They formed the majority of the population, followed by the Chinese community and
finally the Indians, the main minority ethnic group among others (Sabahans and Sarawakians).
7. Barlow’s (1990) findings as cited in Muzafar (2008) revealed that it was fortunate that in the 1970s not
many Indians were retrenched as the plantation sector which was in rather wretched conditions of
life and work on the estates, let alone the overwhelming Indian cultural presence, served to deter
many Malays and Chinese from being attracted to seek employment there. Those Indians who
were already long-established plantation workers did not have to face the threat of competition on
that score.
8. The boon of citizenship did not come without a price, for as the late Tun Mohamad Suffian has pointed,

The bargain that was struck between the representatives of the major communities was that in
return for the relaxation of the conditions for the granting for non-Malays of citizenship, the
rights and privileges of the Malays as the indigenous people of the country were to be written
into the constitution. (Suffian, 1976)

9. My Kad is the compulsory identity document for Malaysian citizens aged 12 and above.
120 P.S. Gopal and P. Karupiah

10. The Malay and Chinese.

11. Malaya then and Malaysia now consist of three major races, that is: the natives, Malays or known as
Bumiputera, Malaysian Chinese whose first generation came from China and Malaysian Indians whose
first generation came from South India.
12. New Villages (Kampung Baru), also known as Chinese New Villages, are settlements created during
the waning days of British rule over Malaysia (Malaya) in the mid-1950s. The original purpose of
the New Villages in Malaysia was to segregate the villagers from the early Malayan Races
Liberation Army insurgents, which were led by the Malayan Communist Party, during the Malayan
Emergency.
13. The first comprehensive national plan, the First Malaysia Plan (1966–1970) was introduced and
implemented in 1966. The general development programme to address the problem of poverty and
its eradication in Malaysia was first documented in the Outline Perspective Plan (1971–1990).
14. In comparison to the Malay and Chinese worker participation, in the urban industrial sector, Indian
worker participation is still fairly minimal. The reason for this is the stipulation by the state that
there should be 40 percent Malay participation in all sectors of the economy and existing pre-domi-
nance of Chinese in the urban sector (Oorjitham, 1988).

Notes on contributors
Parthiban S. Gopal is a lecturer at Social Sciences, Universiti Sains Malaysia, Penang, Malaysia.
He teaches urban and sustainable development, and poverty courses. While his master’s thesis
was on the wage-determining mechanism of Malaysian rubber tappers, his PhD thesis is on
urban poverty among Indians in Penang. He has a special interest in labour issues, urban devel-
opment and particularly on poverty matters and Indian studies.

Premalatha Karupiah is a senior lecturer at School of Social Sciences, Universiti Sains Malaysia,
Penang, Malaysia. She teaches research methodology, sociology of work and statistics. Her
research interests are in the study of beauty culture, educational and occupational choices and
Indian diaspora.

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