Intra-regional migration in ASEAN increased significantly between 1995 and 2015, turning Malaysia, Singapore, and Thailand into regional migration hubs with 6.5 million migrants - 96% of the total number of migrant workers in ASEAN.
In 2015, around USD62 billion in remittances were sent to ASEAN countries, accounting for 10% of GDP in the Philippines, 7% in Vietnam, 5% in Myanmar, and 3% in Cambodia.
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Low-skilled, and often undocumented, ASEAN migrants move in search of economic opportunity, mainly in the construction, plantation, and domestic services sectors. Higher-salary jobs are available, yet workers are not always able to take advantage of these opportunities. The ASEAN Economic Community has taken steps to facilitate mobility, but these regulations only cover certain skilled professions - doctors, dentists, nurses, engineers, architects, accountants, and tourism professionals - or just 5% of jobs in the region.
“No matter where workers wish to migrate in ASEAN, they face mobility costs several times the annual average wage. Improvements in the migration process can ease these costs on prospective migrants, and help countries respond better to their labor market needs,” said Mr Mauro Testaverde, World Bank Economist for the Social Protection and Jobs Global Practice, the lead author of the report.
“With the right policy choices, sending countries can reap the economic benefits of out-migration while protecting their citizens who choose to migrate for work. In receiving countries, foreign workers can fill labor shortages and promote sustained economic growth, if migration policies are aligned with their economic needs. Inappropriate policies and ineffective institutions mean that the region is missing opportunities to gain fully from migration,” stressed Mr Sudhir Shetty, World Bank Chief Economist for the East Asia and Pacific region.
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.
Reporters from Hanoi destination
During a video conference from Singapore, the report pointed out that these restrictive policies are partly influenced by the perception that an influx of migrants would have negative impacts on receiving economies.
However, there is evidence to the contrary. In Malaysia, simulations find that a 10% net increase in low-skilled immigrant workers increases real GDP by 1.1%. In Thailand, recent analysis finds that, without migrants in the labor force, GDP would fall by 0.75%.
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.
The report also estimated that reducing barriers to mobility would improve workers’ welfare - by 14% if only targeting high-skilled workers, and by 29% if including all workers./.