Labour Mobility in ASEAN Sineenat Sermcheep, Ph.D. Faculty of Economics, and ASEAN Studies Center Chulalongkorn University Hands-on Training Designing and Implementing Unemployment Benefits Linking with Active Labour Market Programmes 7 October 2013
Contents Overview of Labour Mobility in ASEAN Framework of ASEAN Movement of Natural Person (MNP) Trade Negotiation Perspective of ASEAN MNP Labor Market Perspective of ASEAN MNP Challenges in ASEAN Labour Market 2
3 Overview of Labour Mobility in ASEAN
ASEAN Labour Migration in 2010 4 Source: Capannelli, Giovanni (2013). Key Issues in Labor Mobility in ASEAN.
Intra-ASEAN Migration in 2010 5 Source: Pasadilla, Gloria O. (2011). Social Security and Labor Migration in ASEAN. ADBI Research Policy Brief 34
Intra-regional Migration in ASEAN in 2010 6 Source: Pasadilla (2011) (in Capannelli (2013))
Migration Flows and Stock in Greater Mekong Subregion (GMS) 7 Source: ADB (2012) (in Capannelli (2013))
8 Framework of ASEAN Movement of Natural Person (MNP)
Ways of Viewing the Movement of Natural Person in ASEAN 1. Trade Negotiation Perspective (Institutional Drivers) 2. Labour Market Perspective (Market Drivers) 9 Source: Tullao, Jr., Tereso S. and Michael Angelo A. Cortez (2006). Enhancing the Movement of Natural Persons in the ASEAN Region: Opportunities and Constraints. ARTNeT Working Paper Series, No. 23
Three Categories of Temporary Labour Migration 1. Unskilled workers Movement occurs due to regional wage differentials, armed conflicts or social upheavals 2. Skilled workers Sending and receiving countries answer to the imbalances in the labor markets in the region Economic growth and demographic trends 3. Intracorporate transferees Movement of highly skilled professionals and technical staff associated with capital movement of foreign direct investment Multinational Corporations (MNCs) 10 Source: Manning and Bhatnagar (2003) (in Tullao and Cortez (2006))
Trade Negotiation Perspective of ASEAN MNP 11 www.thaiembassy.org
ASEAN Economic Community (AEC) and Component AEC Progress Under the AEC, ASEAN has implemented 79.7% of measures under the AEC blueprint as of 15 August 2013. 12 Source: ADBI (2012) (in Capannelli (2013))
Movement of Natural Persons from Trade Negotiation Perspective Considers MNP as one of the four modes of supply where global trade in services can flow. ASEAN Economic Community (AEC) Single Market and Production Base Free Trade in Service AFAS Mode 4 Movement of Natural Persons - Liberalization: Market Access, National Treatment - Facilitation: Mutual Recognition Arrangements (MRAs) 13
14 Signed by ASEAN Economic Ministers (AEM) on 15 December 1995 in Bangkok, Thailand To eliminate the restrictions on trade in services among member states To have Movement of Natural Persons in ASEAN Facilitate the issuance of visas and work permit Develop core competencies and qualifications for job/occupational and trainers skills required Enhance corporation among ASEAN University Network (AUN) members Strengthen the research capabilities of each ASEAN Member Country
Four Mode of Supply: Thailand Country A Country B Cross Border Trade Limitation: None Consumption Abroad Limitation: None Commercial Presence Foreign ownership: >= 51% in 2010 and >= 70% in 2015 Movement of Natural Persons Only for Business Visitor and Intra-Corporate Transferee 15 Source: Department of Trade Negotiation (DTN), Thailand
Mutual Recognition Arrangements (MRAs) Doctor Architect Nurse Engineer Surveyor Dentist Accountant 16 Source: Department of Trade Negotiation (DTN), Thailand
17 Source: ASEAN Studies Center, Chulalongkorn University
ASEAN Agreement on Movement of Natural Persons (MNP) Signed in Phnom Penh, Cambodia on 19 November 2012 covers skilled workers, professionals and executives, and only for their temporary entry. So it is specifically limited to business visitors, intra-corporate transferees contractual service suppliers, and does not allow for permanent entry by such persons nor does not allow for movement of all persons (e.g., unskilled labor) even on a temporary basis 18
Labour Sector Actions in AEC Blueprint Facilitate movement through issuance of visas and employment passes of business persons and skilled labour Work toward recognition of professional qualifications Complete negotiations of, develop new, and implement mutual recognition arrangements Strengthen human resource development and capacity building in the area of services Develop core competencies and qualifications in priority services occupations Strengthen active labour market program capacities in member states 19 Source: Capannelli (2013)
Free Flow of Skilled Labor in the AEC The AEC Blueprint covers only free flows of skilled labor and is silent on flows of unskilled/semi-skilled labor. The free flow of skilled labor has important implications for service trade, FDI and productivity growth. 20 Source: Chia, Siow Yue (2011). Free Flow of Skilled Labor in the AEC. ERIA Reseearch Project Report 2010-03.
21 Free Flow of Skilled Labor in ASEAN
Labor Market Perspective of ASEAN MNP 22 www.smethailandclub.com
Movement of Natural Persons from Labour Market Perspective Market drivers on the regional flow of human resources Stems from the responses of individuals and countries to regional economic and demographic asymmetries Labor Market Sending country: excess supply of labor Receiving country: excess demand for labor 23 Source: Tullao and Cortez (2006)
Factors Affecting Movement of Labor in ASEAN 1. Economic Dynamism in the Region Economic growth has improved income and standard of living of people, expanded trade, attracted foreign investment and stimulated the flow of people across the region. Globalization, information and communication technology, and stiff competition 24 Source: Tullao and Cortez (2006)
Factors Affecting Movement of Labor in ASEAN 2. Pressures of Economic and Demographic Asymmetries Aging population and demographic trend Domestic economic growth problems and rapid population growth www.foreignpolicyblogs.com www.economist.com 25 Source: Tullao and Cortez (2006)
Factors Affecting Movement of Labor in ASEAN 3. Stringent Immigration Policies and Pre-employment Policies Although labor shortage countries have opened their labor markets to foreign workers, they tend to be discriminating in the types of workers that they allow to enter. They have used their immigration and pre-employment policies to limit the entry of certain types of workers. 26 Source: Tullao and Cortez (2006)
27 Challenges in ASEAN Labour Market
Challenges Higher competition in the region Movement of investment and capital Broader scope of labor market Deeper and broader integration to the region and the global market Lack of understanding and awareness of the AEC 28
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