Time will tell whether Asia-Pacific’s increasing trend toward regional integration extend further into labor markets.
The US government recently endured a month-long partial shutdown due to a partisan dispute over funding to build a wall on the country’s southern border with Mexico. While those on both sides of the issue were digging in their heels, I got to thinking about migration trends in Asia.
According to the most recent edition of ADB’s Asian Economic Integration Report, Asia remains the world’s largest continental source of international migrants. Indeed, one in three migrants worldwide comes from the region.
The number of Asian migrants has grown steadily to about 87 million, and the report notes that leading source countries of migrants to Asia are the People’s Republic of China (PRC) with 5.2 million, the Russian Federation (3.8 million), and Bangladesh (3.7 million).
Primary drivers for the movement of such large numbers of people include conflict and the desire for better educational and economic opportunities. Another emerging driver of migration that has received more attention of late is climate change, the subject of a landmark ADB study.
The majority of Asian migrants are semi- and low-skilled workers such as maids, caregivers and manual laborers, including those working on construction sites. Skilled Asian migrants tend to move to advanced industrial economies outside the region.
But as Asian countries become more prosperous and host increasingly important economic centers, one can imagine that more skilled Asian migrants will stay closer to home in future years.
There are various developments opening the door to greater intra-regional migration. For example, the ASEAN Economic Community (AEC) envisions the free flow of skilled labor among the ten members of the Association of Southeast Asian Nations. This goal is slowly being realized through the granting of visas and work permits, and negotiation of mutual recognition arrangements (MRAs) in areas such as engineering, nursing, architecture, medicine, dentistry, and tourism.
However, an ADB study of skills mobility in the AEC concluded that several technical and political barriers at national and regional levels impede professionals from moving and practicing their profession in other ASEAN countries. Overcoming these impediments could yield real benefits.
Economist Mita Adhisti calculated that ASEAN’s overall economic growth could increase 7.1% by 2025 if member countries took steps to support migration, such as improving labor market information, providing language and skill training, simplifying administrative requirements, and expanding MRAs to semi-skilled workers.
Demographically-driven labor shortages in high-income economies are creating new opportunities for migrants from developing countries in the region.
Australia’s Pacific Labour Scheme kicked off in July 2018 to allow citizens of Kiribati, Nauru, Samoa, Solomon Islands, Tuvalu and Vanuatu to take up low and semi-skilled work opportunities in rural and regional Australia for up to three years. The scheme will be expanded to more Pacific island countries as Australia hopes to fill labor gaps in towns and on farms, and in the process stimulate greater economic activity away from the major coastal population centers.
Beginning in 2019, Japan plans to begin issuing more than a quarter-million five-year visas for workers in 14 sectors that are experiencing serious labor shortages, including caregiving, construction, agriculture and shipbuilding. A separate new visa category for high-skilled workers will grant permission for long-term stays, and the right to bring families into the country.
Australia and Japan are not the only countries in the region that will require more workers.
The Economist has reported that countries in East Asia will have to import 275 million people between the ages of 15 and 64 by 2030 to keep the share of the population at working age steady. Malaysia, Viet Nam, Singapore, Thailand, and the PRC will need workers. Countries with a surplus of workers include Bangladesh, India, Indonesia, Myanmar, and the Philippines.
Will Asia’s increasing trend toward regional integration in areas such as trade, equity, and direct investment extend further into the continent’s labor markets? Time will soon tell.
This article was originally published by the Asian Development Bank on 4 February 2019.