Labour Mobility and the ASEAN Economic Community

The ASEAN Economic Community clearly has the potential to lead to significant job growth in the region. But to reap these benefits, the ASEAN member states have to step up regional policies on labour migration: first, they have to live up to the ambitious plans for free movement of skilled labour, and, second, develop a regional approach towards migrant labour in low- and medium-skilled jobs which will constitute the foundation of permanent growth in the region.

Labour migration has been a longstanding reality in Southeast Asia. The Philippines in particular can be seen as the prototype of a labour-exporting state: After 40 years of labour export policies – initially seen as a temporary measure – and the creation of a sophisticated state apparatus catering to Philippine expats and OFWs (Overseas Filipino Workers) on temporary contracts, around ten percent of its population now live and work abroad. The remittances they send home have become an important source of income for their families and the state as awhole, but this dependency has a major downside as well: The labour market back home still offers insufficient em-
ployment opportunities and even the positive current economic development in the Philippines, it is feared, will probably provide only jobless growth.

While migrants in the past have often sought employment opportunities in Western countries and the Gulf States, intra-ASEAN migration has actually been on the rise in recent years. The large economic disparities – USD 119 monthly wage in Laos compared to USD 3,547 in Singapore – pushed the estimated number of ASEAN citizens residing in other ASEAN member states to approximately 6.5 million (up from 1.5 million in 1990). The actual number is probably significantly higher, as irregular migration is rampant in the region.

Considering the high level of bureaucracy and fees often demanded when making use of “official” channels, this might seem like a rational choice from a migrant’s perspective. But it makes them even more vulnerable to abuse and exploitation. Others have become irregular in the destination because they have overstayed their visas. Even when following regular programs, the protection of the rights of migrants may not be guaranteed, since destinations, such as Singapore, group them into different categories: high skilled labour is actively catered for and may gain the right to abode; migrants in low-skilled jobs can only get temporary contracts; and domestic workers are completely excluded from labour laws, since their occupation is not recognized as actual work.

Labour migration in ASEAN is often negotiated on the bilateral level and in non-binding Memorandums of Understanding (MOUs). Obviously, the large economic disparities between the predominantly sending countries (primarily the Philippines, Indonesia, Cambodia and Laos) and receiving countries (primarily Malaysia and Singapore) and the option for receiving countries to meet their demand for migrant labour through the supply from various and often competing source countries lead to unequal bargaining positions.

There is the danger of a “race to the bottom”, with receiving countries dictating the rules and sending countries competing with each other for labour market access. On the other hand, source countries have repeatedly issued temporary deployment bans to Singapore or Malaysia because of severe rights abuses.

Missing Job Growth due to Insufficient Policies

These factors would call for a regional framework to tackle the issue of labour migration. The ASEAN Economic Community (AEC) highlights the need for regional migration governance, since the predicted prosperity of the community is in parts connected to migrant labour. According to the International Labour Organization (ILO) and the Asian Development Bank (ADB), there is an increasing demand for high-skilled labour but the largest demand will continue to be for low- and medium-skilled jobs, in sectors such as trade, transport and construction.

This demand will most likely not be met by the domestic workforce, which reinforces the need for labour migration. In fact, models for six out of the ten member countries predict up to 14 million additional jobs. There have been attempts to address the issue on the regional level. The – non-binding – 2007 Declaration on the Protection and Promotion of the Rights of Migrant Workers is certainly a landmark, but the proposed follow-up ASEAN Framework Instrument is still in the stage of a “zero draft”: countries of destination and origin cannot agree whether to include family members and irregular migrants in the instrument or not.

Further initiatives, like the establishment of the ASEAN Forum on Migrant Labour (AFML) in 2008 and the ASEAN Agreement on the Movement of Natural Persons (MNP) of 2012, have provided space for dialogue or summed up existing regulations but not yet resulted in effective solutions. In fact, the AEC sidesteps irregular and low-skilled labour migration and focuses on the free flows of skilled labour in the region.

But as a study by the Asia-Pacific Research and Training Network on Trade (ARTNeT) points out: “Current policies even if fully implemented are insufficient to achieve this”. So far, the ASEAN states agreed to facilitate the issuance of visas and employment passes, yet only for professionals “engaged in cross-border trade and invest-
ment related activities”.

The majority of high-skilled workforce thus still faces the myriad visa and employment restrictions in the member countries, which often require proof that a position cannot be filled by a national. Moreover, the countries completed Mutual Recognition Agreements (MRA) in eight occupational categories, ranging from engineering and architecture services to nursing and tourism professionals. But these cover only a small part (roughly one percent) of total employment in the region and differ in their scope.

Overcoming “Brain Drain” and “Zero Drafts”

ASEAN lacks standards in qualification recognition which undermines the free flow of skilled labour. Provisions in areas like skills development, qualification and certi-
fication should be made priority of the AEC. Otherwise, as ILO points out, skill shortages and mismatches might hinder job growth in ASEAN. There is also the danger of deskilling, as for example university graduates from the Philippines might prefer to work in low-skilled jobs abroad because of the huge wage differentials. Measures that facilitate mobility, from more standardized skill recognition over remittances saving and investment schemes to social security portability, could help to turn the “brain drain” into “brain regain” for the countries of origin.

But the most pressing area is the governance deficit in regional migration beyond skilled labour. This in - cludes the protection of the rights of undocumented migrants and the end of hypocrisy in countries such as Malaysia that regularly conducts highly publicised deportation programs, while the economy of the country actually often relies on the cheap and easily exploit able foreign labour. Ratification and implementation of the relevant UN and ILO conventions would be a first step in providing a work environment that takes the interests of the migrant workforce into consideration.

The portability of social and labour rights can be an incentive to reduce irregular migration. And the strongly organized migrant civil society in the region can act as an important partner in regional migration governance: in a marked contrast to the “zero draft” of the ASEAN states, the civil society-initiated Task Force on ASEAN Migrant Workers (TF-AMW) has compiled a comprehensive “ASEAN Framework Instrument on the Protection and Promotion of the Rights of Migrant Workers” with 192 recommendations.

“Make migration a choice, not a necessity” is one of the major slogans of migrant civil society. In contrast, for the AEC to reap its full benefits with regards to eco-
nomic and employment growth, providing comprehensive and multi-stakeholder regional migration governance is a necessity, not a choice.

Dr. Stefan Rother

Dr. Stefan Rother is Research Fellow at the Freiburg Institute for Advanced Studies (FRIAS), University of Freiburg. He is a board member of the German Association for Asian Studies (DGA) and speaker of the working group on migration in the German political science association (AK Migra-tionspolitik in der DVPW).