10 ASEAN Countries by zqc90133

VIEWS: 261 PAGES: 11

									                      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

    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

 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

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
  ILO. Forthcoming. OFW Remittances in the Philippines: Effect on Household Poverty, Investment,
Savings, and Employment Decisions.
  The Economist Intelligence Unit. 2007. Country Forecast: Asia and Australasia. www.store.eiu.com
  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
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.

  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
  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.
  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

 migrant workers contribute to the society and economy of both receiving and sending states of
 the sovereignty of states in determining their own migration policy relating to migrant workers;
 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
 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
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

          3,500             ASEAN        EU      United States       Others


                       si a

                                                                s ia














                                                     i li p




          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)

                    Philippines      Vietnam       Thailand      Indonesia       Other ASEAN
                                                                                                                 1 ,204
20,000                                                                                                           1,828





           1990          1995          2000           2001          2002          2003          2004*          2005*
  Source: Global Economic Prospects 2007
          Figure 3. Income Disparity: Thailand and Labour Source Countries


 8.0                                                            Thailand/Laos
 7.0                                                            Thailand/Cambodia
 6.0                                                            Thailand/Myanmar




       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
 300                                                                  Philippines           Indonesia            Thailand

         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


                                Singapore                  Thailand                 Malaysia




                 2007                      2008                     2009                     2010                     2011
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.

To top