Barriers to Labor Mobility in ASEAN – A Missed Opportunity
- Managing migration better can boost workers’ welfare and accelerate economic integration.
- Intra-regional migration in ASEAN increased significantly between 1995 and 2015, turning Malaysia, Singapore, and Thailand into regional migration hubs with 6.5 million migrants – 96 percent of the total number of migrant workers in ASEAN.
- Approximately US$62 billion in remittances were sent to ASEAN countries in 2015. Remittances account for 10 percent of GDP in the Philippines, 7 percent in Vietnam, 5 percent in Myanmar, and 3 percent in Cambodia.
- ASEAN migrants are often low-skilled and undocumented who are compelled to move in search of economic opportunity, mainly in the construction, plantation, and domestic services sectors. Higher-salary jobs are available, yet workers are not always able to take advantage of these opportunities.
- The ASEAN Economic Community has taken steps to facilitate mobility, but these regulations only cover certain skilled professions – doctors, dentists, nurses, engineers, architects, accountants, and tourism professionals – or just 5% of jobs in the region.
- Overall, migration procedures across ASEAN remain restrictive. Barriers such as costly and lengthy recruitment processes, restrictive quotas on the number of foreign workers allowed in a country, and rigid employment policies constrain workers’ employment options and impact their welfare.
- These restrictive policies are partly influenced by the perception that an influx of migrants would have negative impacts on receiving economies, but recent studies have not confirmed this perception.
- The impact of labor mobility on the region’s economies can be significant, as migration could provide individuals from lower-income countries with the opportunity to increase their incomes and create new employment opportunities for local workers in sending and receiving countries. The report estimates that reducing barriers to mobility would improve workers’ welfare – by 14 percent if only targeting high-skilled workers, and by 29 percent if including all workers.
Changing policies for sending and receiving countries can improve intra-regional migration
- A range of policies can be implemented to enhance workers’ mobility. More oversight of recruitment agencies is needed across the region.
- The highly-developed support system for migrant labor in the Philippines can serve as a model for other countries, however, the country should continue its focus on improving reintegration of returning migrants
- Indonesia could improve coordination among relevant agencies and streamline procedures.
- Vietnam can benefit from a national migration strategy to guide reforms and from evaluating the effectiveness of the programs introduced over the last years.
- Outmigration can be costly, particularly in lower-income countries such as Cambodia, Lao PDR, and Myanmar, where simplifying formal processes could help reduce costs.
- Receiving countries can also introduce measures to maximize the benefits from labor mobility. Malaysia could adjust its migration policies to the country’s economic needs, including by revising its current levy system and by deepening coordination with sending countries.
- Thailand may benefit from formalizing undocumented migrants and making entry procedures less costly.
- While Singapore has developed a highly sophisticated and well-functioning migration system, attention should continue to be paid to the welfare of migrant workers.