Track Session II Realizing ASEAN s Full Human Capital Potential Through Free Flow of Labor
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1 Track Session II Realizing ASEAN s Full Human Capital Potential Through Free Flow of Labor Carmela I. Torres DWT Bangkok ILO Regional Office for Asia and the Pacific 2 nd Asian Business Conference Manila, Philippines 27 th, June, 2014
2 Outline 1. Labor Migration in ASEAN 2. Implications of Labor Mobility for Business 3. MRAs and MRS 4. Way Forward
3 AEC Blueprint AEC GOAL of economic integration espoused in Vision 2020 SINGLE MARKET & PRODUCTION BASE COMPETITIVE ECONOMIC REGION EQUITABLE ECONOMIC DEV T I NTEGRATION INTO GLOBAL ECONOMY Free flow of goods Free flow of services Free flow of investment Free flow of capital Free flow of skilled labor Priority integration sector Food, Agri & Forestry Competition policy Consumer protection Intellectual property right Infrastructure devt Taxation E-commerce SME development Initiative for ASEAN integration Coherent approach towards external economic relations Enhance participation in global supply networks
4 1. Labor Migration in ASEAN
5 Labour Migration in ASEAN Key Messages ASEAN Migrants: 14M Labour force: expanding, ageing Main destinations of intra-asean migrants: Singapore, Malaysia, Thailand Services sector followed by industry host most of migrants High-skilled occupations limited Low skilled occupations majority
6 1.1 ASEAN Labor Force ASEAN total population: 616 million, Working population :263 million; Migrants: World total 232 million, ASEAN approximately 14 million Malaysia and Singapore receive 80 percent of intra-asean immigration Source: ASEAN Statistics 2013
7 x Labor force: Expanding vs Aging labor force trend ( Projection) Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Expanding labor force in countries, i.e. Cambodia, Laos, Myanmar, Philippines and Vietnam; But some countries are ageing fast: i.e. Singapore, Brunei 0.30 Vietnam Source: ILO
8 1.3 Characteristics of Intra-ASEAN Migration Intra-ASEAN migration: growing in past two decades Main destinations for Intra-ASEAN Migrants: Singapore, Malaysia and Thailand Host majority of non-asean Migrants: Philippines and Indonesia Labour migration largely occurs under temporary migration regimes and for lower-skilled work Services sector in receiving countries hosts greater number of migrant worker followed by industry sector. Source: Orbeta (2012).
9 a. Top Intra-ASEAN Migration Destinations Malaysia Singapore NON-ASEAN 39% Indonesia 43% NON-ASEAN 47% Malaysia 45% Other ASEAN 1% Philippines 1% Singapore 3% Viet Nam 3% Myanmar 10% Other ASEAN 0% Thailand NON-ASEAN 4% Other ASEAN 1% Thailand 1% Indonesia 6% Cambodia 20% Myanmar 51% Lao PDR 25%
10 b. Receiving Countries: Migrant stock by broad sector of employment (%). Sources: Singapore Ministry of Manpower, Singapore Yearbook of Manpower Statistics 2013; Brunei Darussalam Labour Department, Ministry of Home Affairs, Statistical Yearbook 2011 (Table 2.9); Malaysia Department of Statistics Malaysia, Labour Force Survey 2012; Thailand National Statistical Office, Labour Force Survey 2012 and *Department of Employment, Ministry of Labour, based on administrative records.
11 c. Low-skilled Workers are majority Singapore, Malaysia and Thailand have more low-skilled workers from ASEAN countries than from the rest of the world. Source: Orbeta (2012).
12 d. High-skilled occupations are limited High-skilled occupations (managers, professionals and technicians) accounted for only 10.2% of the overall flows to Malaysia and 3.1% of those to Thailand in Migrant inflows to Malaysia and Thailand by skill level, (thousands) Source: ILO &ADB, ASEAN Economic Community 2015: Managing integration for better jobs and shared prosperity, draft
13 2. Implications of Labour Mobility for Business
14 Implications of Labour Mobility for Business Key Messages AEC will increase demand for skilled workers: demand for high skilled labour projected to grow by 41% Resulting structural change under AEC will increase skills demand: mix of managerial, technical/vocational and core employability skills language skills remain a particular issue Countries to realize opportunities under AEC will need to prepare their workforces by strengthening national education and training systems and policies Low awareness of enterprises on AEC impact Broader skills gaps & mismatches faced by young people
15 2.1 High skilled labor mobility AEC will bring 41% increase in the demand of high skilled labor 54% of enterprise respondents forcasted positive or very positive impact of high skilled labor mobility on enterprises, according to ILO s survey Impact of greater high-skilled labour mobility on enterprises Source: ILO, Road to ASEAN Economic Community 2015: The challenges and opportunities for enterprise and their representative organizations
16 2.2 Low skilled labor mobility AEC will introduce freer regional mobility yet intra-asean labour mobility will probably remain dominated by low-skilled workers While the AEC will remain be dominated by low skilled labour in quantity, it is generating more higher-skill and more productive employment which will allow low and middle income ASEAN countries to move up their skills ladder. 39% of enterprise respondents forecasted positive or very positive impact of low skilled labour mobility on enterprise, while 49% indicated no impact ; Impact of greater low-skilled labour mobility on enterprises Source: ILO, Road to ASEAN Economic Community 2015: The challenges and opportunities for enterprise and their representative organizations
17 2.3 Enterprises low awareness of AEC impact Only 34% of local and regional enterprises were aware of AEC according to ILO s recent survey; Many enterprises neither understood nor knew what to think about the AEC. Understanding of the Impact of AEC on Business Source: ILO, Survey of ASEAN employers on skills and competitiveness (2013).
18 2.4 Enterprise Training Needs Greater training needs for employers are in management and leadership trainings Vocational and technical skills and customer services training are also in high demand Language skills remain a particular issue Source: ILO, Survey of ASEAN employers on skills and competitiveness (2013)
19 2.5 Enterprises strategies to increase competitiveness Nearly 90% of enterprises were likely to increase their competitiveness; And increasing wages, investing in skills and boosting products quality were the preferred strategies for competitiveness increase; Enterprise responses to increase competitiveness within ASEAN Source: ILO, Survey of ASEAN employers on skills and competitiveness (2013).
20 2.6 Business Role and Benefits in AEC Competitive region with higher skills Single labor market Quality workforce reputation Investor attractiveness Target international industries Fair remuneration and remittances Supporting decent work
21 3. MRAs & MRS
22 MRAs and MRS Key Messages MRAs: major instrument for skilled labour mobility but does not guarantee free movement of labour or market access implementation SLOW Challenges implementing MRAs ASEAN Qualifications Reference Framework (AQRF) will enable AMS to compare qualifications while enhancing NQFs Regional disparities can stimulate demand for low skilled workers MRS will be necessary Progress in implementing MRS: varying levels of readiness of AMS
23 3.1 Labor Mobility Tool - MRAs Mutual Recognition Arrangements: a key tool which establishes skills or experience professionals need to work & ultimately be certified in a destination country which is signatory Member States-- thus facilitating easier movement of professional services providers in ASEAN It aims to: - Promote the mobility of skilled professionals - Attract regional talent to meet staffing shortages - Boost regional competitiveness - Improve the quality of services throughout ASEAN MRAs do not guarantee the free movement of labour & market access
24 3.2 Agreed ASEAN MRAs
25 3.3 Challenges in MRAs Countries vary in the education and testing system for professional recognition and are reluctant to change their existing standards for mutual recognition; particular professions are licensed in some countries but not in others. some countries require persons filling such posts as teachers or lawyers to be citizens. differences in language, culture, and social acceptance; MRA negotiations have generally been bilateral and most contain many loopholes for implementation; relevant domestic regulations and market demand conditions still dominate and do not warrant an unrestricted flow of skilled labour. Source: Report by ILO and ADB, ASEAN Economic Community 2015: Managing integration for better jobs and shared prosperity, 2014
26 3.4 AQRF ASEAN QUALIFICATIONS REFERENCE FRAMEWORK (AQRF): a translation device to enable comparisons of qualifications across participating ASEAN Countries. AQRF will cover: a. Senior schooling b. Technical and Vocation Education and Training (TVET) c. Higher Education The AQRF will 1 provide a clear basis for mutual recognition of formal and informal learning 2. facilitate the free flow of skilled labour and the on-going development of ASEAN Mutual Recognition Arrangements (MRAs) for professional services. 3. voluntary
27 a. ASEAN QUALIFICATIONS REFERENCE FRAMEWORK (AQRF) Country A AQRF Country B Qualifications A Qualifications B
28 b. Draft mapping of qualifications structures from level descriptors SINGAPORE WDA Graduate Certificate/ Diploma Specialist Diploma Diploma Advanced Certificate Higher Certificate Certificate PHILIPPINES Diploma Certificate IV Certificate III Certificate II
29 3.5 Labor Mobility Tool MRS AEC does not address movements of low-skilled workers Economic integration contributes to greater concentration of economic activity in some of the more developed member states that can lead to an initial rise in regional disparities Can stimulate demand for low-skilled workers in specific sectors Flows of low skilled workers are likely to continue in the short and medium term due to demographic factors ASEAN Countries could well benefit from and would need to employ low skilled migrant workers Mutual recognition of skills for lower skilled workers is necessary Low skilled workers with a modest skill set (e.g. tiling, shrimp farming) can have skills recognized through the MRS and the AQRF
30 3.6 AQRF Structure
31 3.7 Progress in MRS ILO s Initiative on mutual recognition of skills (MRS) Progress made: 1.Technical and consultation meetings and action planning among ASEAN Member States, ASEAN Secretariat and ILO; 2.Study: Assessment of the Readiness of ASEAN member States for the Implementation of the Commitment to the Free Flow of Skilled Labor within the AEC by Employers Regional Consultation meeting on Skills: Matching and Mobility November, Tripartite Consultation meeting: 6-7 August, Jakarta Indonesia (emphasis on employers/business sector participation)
32 3.8 ASEAN Member Countries readiness level for MRS
33 3.9 Proposed MRS Action Plan Country Priority skills areas Proposed collaborating states Brunei Cambodia Indonesia Services sector -barista ASEAN Member States Construction sector - Building - Electrical sector - Wiring Golden/ Silver/ Brown Medal Services sector -cook Construction sector -bricklaying, tilling, plastering, plumbing, welding, carpenter, beckasting Tourism & Hospitality -House keeping, cooking, tour guide, ticketing Countries in ASEAN Skills Competition Singapore, Malaysia and Brunei Singapore, Malaysia ICT -Electronic Services Sector -Domestic work, caregiver Agriculture -harvester palm oil Singapore, Malaysia Singapore, Malaysia and Brunei Malaysia
34 Proposed MRS Action Plan Country Priority skills areas Proposed collaborating states Lao PDR Malaysia Myanmar Philippines Tourism sector -housekeeping Construction sector -Electrical Installation Tourism & Hospitality -Masseuse -Chef Construction Sector -Welding Garment Sector - Sewing -M/C operator Construction Sector -Steel Reinforcement Work -Systems Formwork (combined Metal and Timber Formwork) - Plastering -Tile Setting -Brick Laying -Concrete Block Laying -Structural Steel Work -Lifting Equipment -Heavy Equipment / Earth Equipment Thailand and Vietnam Thailand Thailand ASEAN Member states (esp. Singapore, Malaysia, Indonesia and Viet Nam) Indonesia Malaysia Singapore Thailand Vietnam
35 Proposed MRS Action Plan Country Priority skills areas Proposed collaborating states Thailand Viet Nam Construction sector -- laying, plastering, and tile-setting Tourism and hospitality Automotive technology Welding Myanmar, Lao PDR and Cambodia Thailand, Laos, Cambodia and Myanmar
36 4. Way forward
37 Way Forward Key Messages Greater demand for skills in the region: little impact on skilled migration but more middle and low skilled migration Strengthen education & training systems & policies Key role of employers Enhancing partnerships among employers, education policy makers and training providers MRAs and MRS AEC integration: successful & sustainable delivering Decent work to workers across region
38 4.1 Way Forward Workers need to be equipped with skills for present and future jobs; focus of AMS on STEM (high value added industries) and fostering better careers for youth; effective cooperation among ASEAN University Network (AUN) members Education and training systems and policies to focus on improved access and quality; promote technical/vocational skills and core employability skills Address demand of skills by employers/private sector so that skills development initiatives can equip and certify workers---to provide a ladder from low skilled to higher-skilled jobs with better working conditions
39 4.1 Way Forward Promote ASEAN-wide better understanding & management of labour migration through the expansion of mutual recognition agreements on skills and qualifications (MRAs & MRS) Greater dialogue with policy makers, employers and workers organizations greater consultation, more effective business councils and participation of private sector in decision-making processes Ensure that migrant workers are protected & treated fairly: ASEAN Multilateral Framework on Migration
40 4.2 Recommendation for Employers Conduct analyses (across enterprises & sectors) to better anticipate mobility of workers or different skills levels; better understand impact of shortages and mismatches Improve enterprises awareness of MRAs/MRS and implementation status Encourage sector-level initiatives on developing mutual skills recognition frameworks like those already existing ACF, AWF Improve communication with the public regarding skills needs, and help raise awareness of those profiles and skill sets needed from youth Raise level of partnerships of employers/private sector with both policymakers and education and training providers Promote awareness of AEC implications among enterprises
41 4.3 Employers Initiatives GLOBALIZATION Through the ASEAN Constructors Federation
42 Employers Initiative (contd.) Established on May 30, 1985 ACF is an alliance of the constructors associations of the ASEAN nations with current membership: 1. Indonesian Contractors Association (ICA) 2. Master Builders Association Malaysia (MBAM) 3. Philippine Constructors Association (PCA) 4. Singapore Contractors Association, Ltd. (SCAL) 5. Thai Contractors Association (TCA) and 6. Vietnam Association of Construction Contractors (VACC)
43 Employers Initiative (contd.) ACF Construction Standards Trade Skills Training (ACSTST) Program OVERALL OBJECTIVE To promote harmonization of construction skills/competency standards (including assessment & certification arrangements) across ASEAN countries to increase productivity and value creation of their respective workforce 10 Construction priority skills: steel reinforcement work; plastering; tile setting; welding; lifting equipment; heavy equipment etc.
44 4.4 Decent Work Agenda International labour standards Labour market development Training Better admission and recruitment procedures Health and social protection Using remittances
45 THE END THANK YOU FOR YOUR ATTENTION For further information please contact: Carmela I. Torres Senior Specialist on Skills & Employability ILO Decent Work Team Bangkok Tel No E mail address: torresc@ilo.org
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