Roadmap to an ASEAN Economic Community

10. Labour Mobility within ASEAN: Issues and Policy Implications for the ASEAN Economic Community

196 Carunia Mulya Firdausy 10 Labour Mobility within ASEAN: Issues and Policy Implications for the ASEAN Economic Community Carunia Mulya Firdausy 1. Introduction The proposal at the ASEAN Summit in Cambodia on 4 November 2002 to transform ASEAN into an ASEAN Economic Community (AEC) by 2020 will undoubtedly have many implications to the economic development of ASEAN countries. However, it is important to note that an AEC without a clear vision and mission as well as detailed policy management will create social-economic and political problems. One of the many problems that will surely emerge is the rapid increase in labour mobility, especially of migrant workers (semi-skilled and unskilled), within ASEAN. If the end goal of the AEC is a common market, there will be free movement of labour and capital among ASEAN member countries. Capital in the form of foreign investments is relatively free to move internationally to a more competitive wage environment. However, workers will bear most of the costs if they encounter problems abroad. 10 Roadmap2AEC Ch 10 7/9/05, 3:45 PM 196 Labour Mobility within ASEAN 197 Since the AEC has no details yet on regulating labour mobility, it is important for ASEAN countries to think of policy measures that regulate or deregulate the free movement of labour from one country to another within the region. These policy measures become critical as the movement of labour continues to grow. Also, based on previous experiences, the movement of labour (especially semi-skilled and unskilled workers) without any clear policy and a good management system to deal with foreign workers has resulted in bilateral tensions in a number of ASEAN countries.This has been particularly the case with the movement of labour from Indonesia to Malaysia and Singapore, and from the Philippines to Malaysia. This chapter aims to address key issues and policy implications related to the movement of labour within ASEAN as the region moves towards an AEC. Based on available data, lessons will be drawn from four labourexporting ASEAN countries, that is, Indonesia, Thailand, the Philippines, and Vietnam, and to a lesser extent Laos and Myanmar, as well as three labour-importing ASEAN countries, that is, Malaysia, Brunei, and Singapore. The following section provides background information on the present situation of labour mobility in the labour-importing countries of Singapore, Malaysia, and Brunei. This is then followed by the current patterns and direction of labour mobility, and the possible main problems and issues with regards to labour mobility in the AEC. The last section provides policy recommendations and concluding remarks. 2. The Present State of Labour Mobility within ASEAN Labour mobility within ASEAN is occurring at an unprecedented rate and will continue to increase in scale and impact as the forces of globalization become more pervasive and the distance separating nations is further eroded in the region. Of the ten ASEAN member countries, Singapore, Brunei, Malaysia, and, to a lesser extent, Thailand are presently under great pressures of labour migrants from other ASEAN countries. The rapid increase of labour mobility to these countries is due to a number of push and pull factors. These four labour-importing countries are the most advanced economies of ASEAN and they tend to pay relatively higher wages and provide better working conditions than other countries in the region. These countries, therefore, attract migrant workers from the less developed countries of ASEAN. For the labour-exporting countries, a combination of economic, demographic, and political forces in these countries have generated labour mobility and emigration pressures. Other factors serve to facilitate and channel actual migration flows, namely readily available information about potential destination countries, historical ties between immigration and emigration 10 Roadmap2AEC Ch 10 7/9/05, 3:45 PM 197 198 Carunia Mulya Firdausy countries, reduced transportation and communication costs, the development of migration networks based on kinship and locality ties, the growth of an immigration industry, and the internationalization of education and training (Stahl 2000). However, the quality of data on the present number of migrants in ASEAN countries is poor and limited. According to Hayase (2003), the present number of international migration1 in ASEAN countries is about 4.12 million people. It can be seen from Table 10.1 that Singapore and Brunei have the highest migrant stocks at 33.6 per cent and 31.7 per cent of total population respectively while in Malaysia, it is only 6.3 per cent. The rest...