Intra-regional labour migration in ASEAN Apart from trade, the growing integration of ASEAN countries is probably most evident in the fast growing intra-regional movements of workers. The total number of migrants originating from ASEAN is estimated at about 13.5 million in 2005 (Figure 1). Of these, 39 per cent or 5.3 million people were in other ASEAN countries, whereas 26 per cent worked in the United States, 9 per cent in the European Union, and 26 per cent in other regions, primarily in the Middle East. INSERT Figure 1. 1. Labour migration trends A large proportion of ASEAN’s migrant workforce is absorbed in one or another member country, although this varies widely by country, influenced by income differentials, demographic trends, geographic proximity, and other factors. Of Myanmar’s estimated total workforce abroad of 1.6 million, 90 per cent are in ASEAN countries, almost entirely in neighboring Thailand which has 8 times Myanmar’s per capita income. The majority of the migrants from Cambodia and the Lao People’s Democratic Republic are also in Thailand. Of Indonesia’s total workforce abroad of 2.3 million, 59 per cent are in ASEAN, mainly in Malaysia, which has 3 times its per capita income. Large reciprocal migration also occurs in the case of Malaysia and Singapore, which account for a large share of each other’s migrant population. Seventy-three percent of Malaysia’s estimated 1.5 million workers abroad are employed in Singapore, while about 40 per cent of Singapore’s 230 thousand migrants work in Malaysia, filling high-skill jobs. The increasing cross-border movements of workers have posed complex challenges to governments. Porous borders and large informal economy in many countries have made the management of migration particularly problematic, especially the task of protecting the rights of migrant workers. The ASEAN Declaration on the Protection and the Promotion of Rights of Migrant Workers, signed on 13 January 2007 at the 12th ASEAN Summit held in Cebu, Philippines signals the recognition of the increasingly important role of migrant workers in the economies of the region and of the shared responsibility of all member states to ensure the protection of their rights (Box 1). INSERT Box 1. It is important to note that the principal destinations of Filipino and Vietnamese migrants are outside the ASEAN, notably the US. Among all the ASEAN countries, the Philippines has the largest migrant population abroad at 3.6 million1, but only 14 per cent of them are in ASEAN countries, primarily as contract workers in Malaysia and Singapore; the US accounts for 44 per cent and the Middle East for 39 per cent. Vietnam has a total migrant population of 2.3 million, 48 per cent of whom are in the US and 12 per cent in ASEAN, mainly in Cambodia and Malaysia. The main host countries for intra-ASEAN migration are Thailand and Malaysia, each hosts about 35 per cent of the region’s migrants (Table 1). Other host countries include Singapore (with 21 per cent of the region’s migrants) and Cambodia (6 per cent); the latter 1 See footnote in Figure 1. from the neighboring countries of Vietnam and Thailand. The main source countries for intra- regional migration are Myanmar and Indonesia, accounting for 27 per cent and 23 per cent of the total intra-regional migrants, respectively. INSERT Table 1. “Migrant jobs” There is much anecdotal evidence that migrant workers are largely absorbed into occupations such as domestic service, construction, farming, and labour intensive manufacturing, but official statistics are unfortunately very scarce. The Philippines, for example, reports occupational breakdown of migrant workers bound for all destinations. In 2006, professionals and technical workers accounted for 12 per cent of all migrants from the Philippines and service workers for 48 per cent. In Thailand, based on similar data for 2001, only 3.4 per cent were deployed as professionals and technical workers. Feminization of labour migration Women constitute a large and increasing proportion of the region’s migrant workforce. In 2006, 72 per cent of the newly deployed workers from the Philippines to all destinations were women, consisting not only of domestic workers but also nurses and caregivers. Among the Indonesian migrants in 2004, 81 per cent of those who registered before leaving for work abroad were women. Female labour migration is strongly concentrated in a very limited number of female dominated occupations, which are associated with traditional gender roles, mainly domestic work and the “entertainment” industry. While these jobs do not necessarily have to be exploitative, the circumstances of the jobs themselves often lead to a high degree of vulnerability to abuse and exploitation. The dominance of women in labour migration flows is likely to gain even more strength in the future because of the rapid growth of demand for service sector workers, especially for health workers, as a consequence of population ageing in some major destination countries. 2. The benefits of migration The growing mobility of labour across boarders offers significant benefits for both receiving and sending countries as well as the migrants themselves. The movements of workers from lower- to higher-wage countries suggest that the region’s resources are being allocated from less to more productive employment, which contributes to higher productivity, income and job creation in ASEAN as a whole. For receiving countries, the benefits have been the alleviation of labour shortages and higher rates of economic growth. For the sending countries, the impact of migration on poverty reduction has clearly been positive. Remittances and development Remittance inflow into ASEAN is estimated to total US$ 26 billion in 2005, of which the Philippines accounts for 62 per cent, Vietnam 15 per cent, Thailand 9 per cent, and Indonesia 8 per cent. This figure is probably still an underestimate as a substantial part of remittances in countries like Myanmar, Lao People’s Democratic Republic, Cambodia, and even Indonesia still go through informal channels. The level in 2005 is more than 7 times the 1990 remittance level of US$ 3 billion and more than twice the 2000 level of US$ 10.3 billion (Figure 2)2 2 Of course, some part of the observed increase is simply due to better capture as an increasing number of migrants shift to formal remittance channels. INSERT FIGURE 2 A widely discussed issue that has emerged in the remittance receiving countries, particularly the Philippines, which is the third largest recipient of remittances in the world after India and China, is how effectively they have utilized these inflows for development and whether they compensate for the potential negative effects of the outflow of skilled workers. In the case of the Philippines, there is some evidence that remittance is a force for good. Households with overseas workers in the country spend about twice more (as a percentage of total family income) on education as households not receiving remittances. Children from remittance-receiving households are also significantly more likely to be enrolled at all levels than non-remittance receiving households, compensating in a way for the large outflow of skilled workers. Households that are able to send workers abroad are also able to climb up the income ladder very quickly – by an average of about 6 percentile points in about a year – enabling a significant number of the poor to climb out of poverty3. Furthermore, remittances often have multiplier effects on local economies. Yet, in addition to these important benefits, labour migration also involves costs such as brain drain and the risk of dependency. Moreover, the huge and growing number of irregular migrants signals the immense problem of managing intra-regional migration (Box 2). 3. Economic growth and migration pressure The growth prospects in ASEAN are almost surely going to affect future intra- regional migration levels. The ASEAN region as a whole is expected to grow relatively rapidly over the next 5 years (2007-11), averaging around a GDP growth of 5.5 per cent annually.4 With the exception of Myanmar, economic growth is expected to be somewhat faster in labour sending countries than in the more developed receiving countries. Yet, uneven demographic trends, closer economic integration, and wide and persistent income differentials between receiving and sending countries are likely to generate an increasing flow of migrants within the ASEAN region. As a result, Malaysia, Thailand and Singapore are expected to absorb large numbers foreign workers in the coming five years. The number migrants is likely to increase strongly As to sending countries, “push factors” will be particularly strong in Myanmar where slower growth is expected to widen further the income disparity with Thailand (Figure 3). It is more difficult to predict what will be the response from Lao PDR and Cambodia -- Thailand’s other major labour source countries. On the one hand, per capita GDP is expected to increase faster in Lao PDR and Cambodia than in Thailand, reducing relative income disparity.5 On the other hand, absolute income disparity will continue to widen despite their 3 ILO. Forthcoming. OFW Remittances in the Philippines: Effect on Household Poverty, Investment, Savings, and Employment Decisions. 4 The Economist Intelligence Unit. 2007. Country Forecast: Asia and Australasia. www.store.eiu.com 5 This raises the interesting question of whether migration in Lao PDR and Cambodia, through remittances or other avenues, have contributed to the recent and expected future rapid growth in the two countries – leading to a form of growth convergence with the destination countries, particularly Thailand. Data is not readily available to test this hypothesis. For instance, it is unlikely remittance figures for Cambodia and Lao PDR, which are mainly through informal channels, are adequately captured. But it is worth noting that in the case of Cambodia, a major driver of growth is private consumption, which based on studies from other countries such as the Philippines, is often spurred by remittances. higher income growth6 . In the case of Indonesia, its relative income level with Malaysia is expected to remain stable up to 2011. As to Thailand as a sending country, a combination of solid economic growth with and increasingly ageing population will likely lead to a declining trend in out-migration flows from the country in the coming years (Figure 4). The Philippine Government expects the out-migration of workers to continue in the near future. The number of Filipino contract workers who left in the first 11 months of 2006 totaled 768 thousand.7 The number of Indonesian workers who emigrated passing through legal channels and registered totaled 474 thousand in 2005, while those from Thailand totaled 129 thousand. The outflows from Vietnam in recent years have been estimated at about 75 thousand a year. The estimated demand for additional foreign labour in the region is expected to remain strong in the medium term (Figure 5). In Thailand, where the labour force is expected to grow at only about one percent a year, GDP growth of about 4.5 per cent a year is estimated to create an excess demand for labour of about 243 thousand for 2007, and to 474 thousand by 2011. In Malaysia, the labour force is growing more rapidly at 2.3 percent annually, but additional demand for foreign labour is nonetheless expected because of a higher GDP growth of 5.5 per cent: Excess demand is projected to grow from 10 thousand in 2007 to 147 thousand in 2011. In Singapore, additional demand for foreign labour is projected to grow from 17 thousand in 2007 to 41 thousand in 2011.8 Managing intra-regional migration is key for ASEAN The past few decades have seen the emergence of a labour migration system in the ASEAN region. Several factors have contributed to the growing integration of the regional labour market including unbalanced growth and widening income differentials, the demand for workers in large informal economies, the ease of crossing borders between neighboring states with strong ethnic affinities, and population ageing in the more developed economies. Assessments of the future economic prospects of the ASEAN economies suggest that these factors will continue to spur more cross-border movements of workers and it will take some time before incomes would significantly converge to diminish the pressures. An important feature of these future movements will be the even greater participation of women since population ageing in the key destination countries is expected to accelerate. While intra-regional migration may have contributed to the region’s economic dynamism and there is evidence that it has helped reduce poverty, it has raised a concerns and issues for labour and social policy. There is now a large population of workers in an irregular status who are very vulnerable to exploitation. Guest worker programmes have also often featured controls which unfairly limit the rights of workers. There is a need to consider the impact and effectiveness of measures taken to regulate admissions, to ensure equal treatment, to register the undocumented and give legal status, to penalize employers hiring undocumented migrant workers, among others, if the migration is going to be mutually beneficial for all parties. 6 In addition, there is the argument of the “migration hump” wherein it is hypothesized that migration will first increase as income increases before falling down after a high enough level of income is reached. 7 These figures do not include workers employed as seafarers. The Philippines Overseas Employment Administration registers all departing workers which include newly-hired workers and those going back to their jobs abroad after returning to the country for vacation. 8 Hui, W-T and A.R. Hashmi. 2004. Foreign Labour and Economic Growth Policy Options for Singapore. CLMR Discussion Paper Series 04/2. www.cbs.curtin.edu.au/files/04_2.pdf. The ILO’s Action Plan on Migration, in particular the promotion of the ILO Multilateral Framework on Migration, are all relevant to these challenges and could contribute significantly to improving the future governance of labour migration in the region. If intra- regional migration is managed well, the rising mobility of ASEAN’s human resources, both skilled and unskilled, can become a unique source of comparative advantage in the increasingly competitive global environment. Box 1. ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers Summary of main provisions Recognition migrant workers contribute to the society and economy of both receiving and sending states of ASEAN; the sovereignty of states in determining their own migration policy relating to migrant workers; Agreement to cooperate in resolving cases of migrant workers who involuntarily became undocumented; Obligation of receiving state to provide migrant workers with adequate access to the legal and judicial system; to facilitate the exercise of consular function to consular or diplomatic authorities of states of origin when a migrant worker is arrested or committed to prison or custody or detained in any manner; Obligation of sending state to set up policies and procedures to facilitate recruitment, preparation for deployment of overseas and protection of migrant workers, as well as repatriation and reintegration to the countries of origin, and other aspects of worker migration; to establish and promote legal practices to regulate recruitment of migrant workers and adopt mechanisms to eliminate recruitment malpractices; Commitment by ASEAN to establish and implement human resource development and reintegration programmes for migrant workers in their countries of origin; to take concrete measures to prevent or curb human smuggling and trafficking by, among others introducing stiffer penalties for those involved; to facilitate data-sharing on matters related to migrant workers, for the purpose of enhancing migrant worker policies and programmes in both sending and receiving states; to promote capacity building by sharing information on best practices as well as opportunities and challenges encountered in relation to protection and promotion of migrant workers’ rights and welfare; to extend assistance to migrant workers of ASEAN Member Countries who are caught in conflict or crisis situations outside ASEAN in the event of need and based on capacity and bilateral consultations and arrangements; to task relevant ASEAN bodies to develop an ASEAN instrument on the protection and promotion of the rights of migrant workers, consistent with ASEAN’s vision of a caring and sharing Community Box 2. Irregular Migration in Thailand and Malaysia Thailand and Malaysia both have large populations of migrant workers in an irregular situation, which have remained as a major challenge and an increasing concern for the authorities of the two countries. In 2005, Thailand had an estimated 1.1 million irregular migrant workers, mainly from the neighboring countries of Myanmar, Cambodia and the Lao People’s Democratic Republic. In 2006, Malaysia had an estimated 700 thousand irregular migrants, 70 per cent of whom were Indonesians, while most of the rest were Chinese and Indian nationals who overstayed after entering the country legally as tourists. Periodic amnesties and registrations were undertaken both in Thailand and Malaysia, but have so far proved ineffective in resolving the issues. Malaysia offered amnesty to irregular migrants in a four month period bridging late 2004 and early 2005. Yet, only about 380,000 of the estimated 0.8 to 1.2 million irregular migrants availed. Thailand undertook registration campaign and offered amnesty to irregular migrants from July to August 2004 and around 1.3 million irregular migrants registered. Nevertheless, subsequent re-registrations attracted much fewer and fell to 344 thousand by June 2005. To stem further irregular migration, both countries have negotiated bilateral arrangements with labour-sending countries. The mechanisms of this approach to solving irregular migration are still being fine tuned and its effectiveness is not evident yet. Malaysia has also decreed that workers could be imported only from 12 designated countries – Cambodia, Indonesia, Lao PDR, Myanmar, the Philippines, Thailand, Vietnam, India, Nepal, Kazakhstan, Turkmenistan, and Uzbekistan – with the country of source dependent on the sector of employment. Thailand has signed Memoranda of Understanding with its 3 major source countries - Myanmar, Cambodia, and Lao PDR. As a result, nationals of these countries are allowed to work legally in Thailand provided that they go through regular and established procedures for recruitment in their countries of origin and they register with the Thai authorities and obtain a Thai ID. Sources: Ministry of Labour, Thailand; Kanapathy, S. (2006): Migrant Workers in Malaysia: An Overview, paper prepared for the Workshop on the East Asian Cooperation Framework for Migrant Labour, Kuala Lumpur, 6-7 December 2006; and Martin, P. (2007): The Contribution of Migrant Workers to Thailand: Towards Policy Development, ILO, Bangkok. Table 1. Bilateral Estimates of Migrant Stocks in ASEAN (in thousands), 2006 Destination Source country Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam ASEAN Brunei 0 0 0 0 0 0 1 0 0 0 1 Cambodia 0 0 0 2 7 0 0 0 232 0 240 Indonesia 6 0 0 0 1,215 0 5 96 1 0 1,323 Lao PDR 0 1 0 0 0 0 0 0 257 0 258 Malaysia 68 1 0 0 0 0 0 994 3 0 1,066 Myanmar 0 0 0 0 92 0 0 0 1,382 0 1,475 Philippines 23 1 0 0 353 0 0 136 3 0 516 Singapore 3 1 0 0 87 0 0 0 2 0 92 Thailand 11 129 0 3 86 0 0 0 0 0 229 Vietnam 0 157 0 15 86 0 1 0 20 0 279 ASEAN 111 290 0 20 1,925 0 8 1,226 1,900 0 5,480 Sources: University of Sussex; World Bank; Department of Statistics Malaysia; Ministry of Labor Thailand;Philippine Overseas Employment Administration Figure1. Migrants from ASEAN Countries by Destination 4,000 3,500 ASEAN EU United States Others 3,000 2,500 2,000 1,500 1,000 500 0 * R dia si a d e s ia ar m ei es an PD or un na nm ne bo ay pin ap ail et Br ya o m al do ng i li p Th La Vi M Ca M In Si Ph Sources: University of Sussex; World Bank; Malaysia Department of Statistics; Thailand Ministry of Labor; POEA *Estimate of the stock of migrants from the Philippines vary widely from the 3.6 million cited here to 8 million by the Philippine Overseas Employment Agency (POEA). Figure 2. Remittance Inflows into ASEAN (US$ Mn) 25,000 Philippines Vietnam Thailand Indonesia Other ASEAN 1 ,204 20,000 1,828 2,029 3,200 15,000 13,379 10,000 5,000 0 1990 1995 2000 2001 2002 2003 2004* 2005* Source: Global Economic Prospects 2007 *Estimates Figure 3. Income Disparity: Thailand and Labour Source Countries 10.0 9.0 8.0 Thailand/Laos 7.0 Thailand/Cambodia 6.0 Thailand/Myanmar 5.0 4.0 3.0 2.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: Income disparity is defined as (per capita GDP of Thailand/per capita GDP of sending country), w here GDP figures are in PPP US$. Sources: WDI 2005; HDR 2006; EIU forecasts and authors' extrapolation Figure 4. Projected Migration Outflows from Selected Labour Sending Countries 1000 900 800 700 600 500 400 300 Philippines Indonesia Thailand 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Sources: Philippine Overseas Employment Agency (land-based only); Indonesia Ministry of Manpower and Transmigration; International Migration in Thailand (IOM ,2005); Projections based on past 5-year trend are in red Figure 5. Projected Additional Foreign Labour Demand In Selected Labour Receiving Countries 600 500 Singapore Thailand Malaysia 400 300 200 100 0 2007 2008 2009 2010 2011 -100 So urces: Fo r M alaysia and Thailand ILO Labo ur fo rce pro jectio ns and EIU fo recasts o f labo ur fo rce gro wth necessary to suppo rt an average annual gro wth o f 4.5% fo r Thailand and 5.5% fo r M alaysia fo r the fo recast perio d. Fo r Singapo re, co mputed fro m Hui, W-T and A .R. Hashmi (2004). Fo reign Labo ur and Eco no mic Gro wth P o licy Optio ns fo r Singapo re. CLM R Discussio n P aper Series 04/2.
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