According to an often-cited study by the International Labor Organization and the Asian Development Bank, the formation of the ASEAN Economic Community (AEC) could generate up to 14 million jobs across Southeast Asia. In an ideal scenario, the free flow of skilled labor – along with goods, services, and capital – will fuel robust regional GDP growth, which came in at 4.5% in 2015.
In reality, freedom of movement for skilled labor across ASEAN remains a distant dream.
Mutual recognition agreements (MRAs) have been established for eight professions – accountants, engineers, nursing, architects, surveyors, doctors, dentists, and tourism professionals. But work permits are still necessary before commencing employment, on top of having to pass local professional examinations.
“You have an ageing population in Singapore and Thailand, but you have youthful ones in the Philippines, Indonesia, and Vietnam. You need to take advantage of these demographic changes [in ASEAN] to get an optimum distribution of labor”
Underlying all this is political pressure to protect citizens on their home turf, which begs the following questions: Is ASEAN integrated enough in harmonizing labor policies? Is there enough political will to make freedom of movement easier?
“The political will is there, but politicians have to take care of domestic politics, so that becomes the focus,” muses Veerinderjeet Singh, Executive Chairman of business consultancy AxcelAsia. “Attention on the region becomes number two, or three or way down the list.”
“There is no doubt that ASEAN leaders are politically in tune with the reality, but when it comes to implementation they are looking for guidance,” he adds. “This is where the private sector and NGOs have a role to push things forward and policies along. I don’t think you can sit there and wait for the politicians to start the process.”
Domestic vs. Regional vs. Global
Singh made those remarks at the recent discussion panel for Singapore-based station Channel NewsAsia’s Perspectives program, Upskilling ASEAN for Growth.
Picking up on that sentiment, Stephen Groff, Vice President of operations at the Asian Development Bank, highlighted the economic and demographic diversity that fuels fears of more attractive cities taking all the best talent, thus creating entrenched inequality.
“You have an ageing population in Singapore and Thailand, but you have youthful ones in the Philippines, Indonesia, and Vietnam,” Groff says. “You need to take advantage of these demographic changes [in ASEAN] to get an optimum distribution of labor.”
“Yes, it’s important to not lose your best talents to countries outside of ASEAN,” he says. “But it’s also important that you distribute that demographic shift better [across ASEAN] in order to realize its benefits.”
“Mobility across the region is a good thing,” says Singh. “The danger is that ASEAN doesn’t consolidate its efforts. If you want to look at ASEAN as being the playground where only ASEAN’s best work, you may not see it. That’s because you’ll see lots of professionals from other countries coming to ASEAN to work.”
“If you’re looking at having only young people of ASEAN working in ASEAN, that’s not something we can achieve. We have to encourage it [young ASEAN working in ASEAN], but we have to open up the opportunities across the world.”
Role of Universities
There is little doubt that human capital development will be crucial to the ASEAN Economic Community’s feasibility. While globalization has made it easier for companies to fill positions by looking beyond ASEAN, continued reliance on such a strategy will be unsustainable.
So what is stopping ASEAN governments from addressing this obvious obstacle to the economic community’s success?
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