Southeast Asian labor markets today collectively have one the largest growing working populations that are soon projected to reach the heights of countries like China and India, which today, owing to their booming population, are some of the biggest labor markets across the world. But unlike the two nation, the southeast Asian markets, many of which are a part of ASEAN collective, are separate nations; each with its own set advantages and impediments that guide labor policy. When one factor in the different economies and their current state of development, one can perhaps begin to understand the nuanced and layered nature of workforce policy formation, both internally and between different countries. A key aspect of which has been migration, and specifically for our discussion, the topic of migrant labor.
Many of Southeast Asian countries have traditionally been major trading centers through extensive periods of history. But it isn’t until the 1970s and 80s that labor migration can be understood under modern, post-colonial frameworks. Today the migration in search for better-paying jobs forms an integral part on the region labor dynamics. Malaysia and Thailand, for example, make up as the preferred job destination for about 70 percent of the estimated 13.5 million migrants in the region. Other smaller countries like Singapore depend heavily on their foreign workers, most of whom form a key part in their robust economic engine which supports the growth of the country. Such interaction between the demand and supply forces of human talent has over the years become a vital part of how companies and countries have looked to enable (or limit) the flow of talent. So much so that today, according to the International Labor Organization, around 6.9 million ASEAN nationals have migrated within ASEAN.
Many countries in the region regulate such flow through elaborate administrative frameworks that are focussed on border control while brokerage firms and labor recruiters carry out recruitment, transportation, and placement of migrant workers. With aim of boosting domestic production and allow regional companies to have access to best of talent, most immigration policies are often designed with the intent of providing an incentive for skilled workers, while enabling a circular migration flow when it came to low-skilled workers. This while many countries also have efforts in place to curb illegal migration and include severe penalties for unauthorized migrants.
Impact of migration
The impact of migration on labor policies isn’t a new feature in the region. With countries like Singapore, Thailand, and Malaysia opting to rapidly industrialize post-independence and become export-oriented countries favored them in following a steep growth trajectory. But with such growth came also labor shortages and this led them to look at their neighboring regions with larger working populations to meet their own rising talent needs. As the years have passed, this dependence has become more extensive, and as a result, a formal part of labor policies are formed. As a result of today, these states also developed strategies to monitor and control the migrant labor flows.
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.
Meeting talent needs
But it is not to say that all such development within the regions migrant labor force dynamics have been on the positive side. With soaring demands for both skilled and unskilled labor across the region, it's been difficult for many countries ensure all such talent needs are met through formal, regularised channels. A recent ILO report notes that due to the high costs, long duration, and considerable complexity of navigating the regular channels for migration, many ASEAN migrants are employed precariously in destination countries without legal status. Regardless of the documents they hold, migrants within the region often experience exploitation and abuse because of inadequate protection of their labor rights during recruitment and employment. This puts a large percentage of migrant population under the threat of exploitation and many have reported that today the working migrant population is one of the least protected in the region.
Marja Paavilainen, Senior Programme Officer, ILO TRIANGLE initiative in ASEAN, explained that "despite improvements, migrant workers remain among the least protected in the region. Migrant workers’ access to social protection in the ASEAN region is fraught with many challenges. They often work in economic sectors not covered by social security, such as domestic work, or in small enterprises exempted from providing social protection to their employees. When they are entitled, social protection is often provided through separate schemes that offer less protection and benefits than those available to national workers. Migrant workers are also often unable to meet the eligibility criteria for long-term benefits, such as an old-age pension. This is further compounded by administrative barriers and the limited time migrant workers have to claim and finalize social security benefits upon termination of employment. Finally, arrangements for portability of social security that could ease some of these challenges are absent between the ASEAN Member States.”
Although the entry and exit of skilled workforce in countries like Singapore remains fairly regularised and structured, it often with regards to the unskilled workforce where the region fails to provide adequate safeguards. This, in the present business climate with workplace automation and job restructuring, could have disastrous consequences.
Many countries in return have begun formalizing their channels of hiring foreign talent while in cases like Singapore, indigenous talent is given a priority when it comes to hiring, reducing their dependence on foreign labor. In addition, many countries among the ASEAN group have sought to provide improve trade relations among them to create a collective talent flow and ensure talent mobility is an easily accessible option to job seekers in the region.