Industrial relations in Malaysia - Multinational preferences and state concessions in dependent development: A case study of the electronics industry

The Malaysian economy has been highly dependent on Japanese and American inward investment to further its export-oriented industrialization strategy. At the outset of this strategy the state effectively banned unionization in the electronics sector as an explicitly stated strategy to attract inward investors. The article explores state and multinational anti-union strategies in the electronics sector at macro-and organizational levels. It is argued that while opportunities for trade unionism are affected by domestic and international political environments which can exert pressure on states to adopt particular policies, multinationals are subject to fewer constraints. This can give rise to state concessions to trade unions which are not only undermined by multinational capital but can bring the state and multinationals into public conflict. Using the electronics sector as a case in point this article explores the underlying dynamics of Malaysian state policies towards trade unions within the paradigm of dependent development. Second, the article explores micro-level multinational strategies in union avoidance where state-level strategies have been felt to be weakened. The article concludes by arguing that the debate on social clauses and trade needs to target the first world as well as the third, and until this occurs future prospects for trade unionism in the electronics sector are slim, irrespective of the needs and desires of the Malaysian state and its labour movement.