Trade and Employment in Asia ed. by Niny Khor and Devashish Mitra (review)

This ten-chapter volume analyses trade and employment issues as they persist throughout East Asia generally and in four economies specifically: Indonesia; Malaysia; the Republic of Korea; the People’s Republic of China (PRC); and its Special Administrative Region of Hong Kong. In the introductory chapter, Khor provides a roadmap that is essential for readers to keep in mind as they move through the book’s mass of serious scholarship that includes empirical data, theoretical analyses, institutional evaluations, policy issues and development perspectives. Khor stresses that in the book, “[the authors] look at the trade-labor nexus in the context of Asia, which has been growing rapidly over the last two to three decades and which has, at the same time, been undergoing changes. This period in Asia has seen jobs being created at a rapid and robust pace … (and) growth has led to substantial poverty reduction.” (p. 1)

The four chapters that follow the introduction analyse and describe in detail the changing relationships among the patterns of trade in goods and services, the structure of employment markets, employment conditions, the importance of foreign direct investment, globalization’s impact, labour market regulations, firm behaviour as well as competitiveness. However, relatively little attention is paid to informal and formal education and their impact on generating the human skills and attributes necessary to produce exports. Despite education’s absence, the range of topics covered throughout the volume makes it a useful addition to the academic literature and clearly it can be added to reading lists in selected university classes that deal with Asia’s economies.

Readers will also note an important theme analysing “the links between openness to trade and historical trends in employment and its quality, where ‘quality’ captures various employment characteristics such as the wage rate, job-security, working conditions and other non-wage benefits.” (p. 10). In this sense the contributors do not forget that they are examining the lives of human beings whose workplace circumstances and economic well-being are not simply abstractions but are the consequences of interactions of domestic and external market activities and government policies. Well-being is partly defined in terms of wages about which Khor concludes that despite “considerable variation within the region”, “one of the most striking patters that we observe is the rise in wages in Asia, especially and its developing countries.” (p. 45)

The concluding five chapters narrow the book’s focus to the four economies and their trade, development and employment performances. Numerous topics stand out including the following three. First, the chapter on Indonesia analyses the reasons behind the decline in labour-intensive manufacturing and the rise of services. It calls attention to the capital-intensive production function inherent in the nature of foreign direct investment and technology transfers into the Indonesian economy, particularly its exportoriented industries. The authors conclude that “the slowdown in manufacturing jobs associated with exports is a concern at this stage of the country’s development, as highlighted by the rising share of employment in agriculture” (p. 201). In addition, the authors caution that “while services can provide greater employment opportunities in the long run, they are not yet ready to offset the slowdown in employment for manufactured goods. Because most of the constraints appear to be on the supply side, there is room for government action to improve the prospects.” (p. 201)

Second, the discussion of Malaysia’s labour market policy debate is current and lively and it is particularly useful because it includes the role of cross-border worker migration, a component of work forces throughout Asia. The debate concludes that on the one hand Malaysia’s labour policies hobble and constrain collective bargaining and offer no unemployment benefits. On the other hand, the “government has developed and carefully administered a comprehensive mechanism for protecting worker rights, and providing workers with handsome social benefits and services in an overt fashion” (p. 248). Malaysian officials have been struggling...