Rising labour migration within Asia Pacific
Intra-regional labour migration within Asia Pacific has increased since the late 1990s, driven by globalisation and disparities in labour demand and wage opportunities in the region. Rising labour mobility will have positive impacts on employment, consumer spending and economic growth as migrant workers enhance the flow of remittances, trade and investment in the region. However, it can also be a source of social tensions.
- As a result of economic integration and rising labour shortages in the region’s newly industrialised countries, intra-regional labour migration on short-term contracts within Asia Pacific has increased since the late 1990s. According to a United Nation Development Programme (UNDP) report in 2009, intra-regional migration in Asia accounts for around 20% of total international migration;
- The flows of labour migration in Asia Pacific are often from lower-income countries such as India, Indonesia, the Philippines and Vietnam to countries which have labour shortages and offer higher wage opportunities such as Japan, South Korea, Taiwan, Hong Kong and Singapore;
Japan and South Korea, however, remain strict on migration due to their emphasis on the importance of maintaining ethnic homogeneity. Foreign citizens accounted for 1.8% and 1.7% of Japan’s and South Korea’s population in 2009 respectively;
- Migrant workers play an important role in several Asia Pacific economies such as Singapore and Malaysia. Rising labour migration will improve the region’s labour markets and facilitate the flow of remittances, trade and investment between different countries, thus having positive impacts on consumption and economic growth. In the Philippines, the region’s largest labour exporter, remittances inflows accounted for 12.2% of GDP in 2009;
- However, growing migration including illegal labour migration can be a source of tensions between countries and within host countries, undermining the business environment. Flows of migration and remittances in Asia Pacific declined in 2009 as the region’s economies were hit by the global recession.
Changes in migration trends
- While the majority of Asia Pacific migrants traditionally went to the West and the Middle East, the largest migration flows are now within the region:
- Migration within the Asia Pacific region is characterised by the rising movement of workers from one country to another on short-term contracts as the region’s labour markets have become more integrated;
- Rising intra-regional migration has been driven by a growing demand for labour from the region’s new industrialised countries such as South Korea, Taiwan, Hong Kong, Singapore and Malaysia. Workers emigrate in search of higher income opportunities offered by these countries; Annual disposable income per capita in Malaysia was US$4,007 compared to US$1,274 in the Philippines in 2009;
- The early flows of labour migration within Asia Pacific were mainly unskilled and semi-skilled workers. Since 2000s, however, the flows of highly-skilled workers have increased due to rising skills shortages. In Singapore, for example, 79.5% of new immigrants in 2009 had post secondary education qualifications, according to national statistics;
- The share of women among Asian migrants has been increasing due to a growing demand for jobs such as domestic helpers, healthcare workers, as well as workers in the garment and electronic industry. Labour migration sources and destinations Hong Kong, Japan, Singapore, South Korea, Taiwan, Malaysia and Brunei are the major destinations for Asian migrant workers owing to their relatively higher wage opportunities and rising demand for both unskilled and skilled labour. Malaysia, for example, had a net migration – the difference between immigrants and emigrants – of 93,400 people in 2009;
- Since the late 1990s, Thailand has moved from being a major supply of labour to the Middle East to becoming a destination country for unskilled migrant workers from its lower-income neighbouring countries. According to the UNDP, the stock of immigrants in Thailand will reach 1.2 million in 2010, compared to 387,500 in 1990;
- With about 10.0% of the country’s total population working abroad in 2009 according to national statistics, the Philippines is considered to be the region’s largest labour exporting country. Filipinos take up not only unskilled jobs such as domestic helpers but also semi and high-skilled work as nurses and engineers;
- Besides the Philippines and Indonesia as the traditional source countries, the flows of migrant workers from Vietnam, Cambodia, Laos and Burma have been increasing. According to Vietnam’s Ministry of Labour, Invalids and Social Affairs, there were approximately 450,000 Vietnamese labourers working abroad by 2009, up from about 10,000 people in 1995;
- South Asian countries including India and Pakistan continue to be net labour exporting countries. India, for example, had a net migration outflow of 652,000 people in 2009. Most Indian and Pakistani low and semi-skilled migrant workers still go to the Gulf region;
- Generally, immigrants make up a small share of the labour force in Asia overall compared to regions such as Europe but migrant workers have become a critical source of the labour force in several Asia Pacific economies including Singapore and Malaysia. According to The International Organisation for Migration (IOM), migrant workers accounted for 30.0% of Singapore’s workforce and 20.0% of Malaysia’s workforce in 2009.
Source: UNDP.Note: 2010 figures are estimates. Due to differences in definition of the underlying data, cross country comparisons should be made with caution.
Implications of rising migration
Rising labour migration within the Asia Pacific region will bring both opportunities and challenges:
- Remittances sent by migrant workers will increase as a result of growing labour migration. This will have positive impacts on household income, consumption as well as poverty reduction and economic growth;
- India is the top receiver of remittances in the region, totalling US$49.3 billion in 2009, followed by China (US$47.6 billion). Remittances play an important role in several Asia Pacific economies such as Bangladesh and the Philippines. In 2009, remittances inflows accounted for 12.2% and 12.1% of total GDP in the Philippines and Bangladesh respectively. Remittances inflows are important sources of income for consumers in the recipient countries;
Source: Euromonitor International from trade sources/national statistics.
- Labour migration will improve the region’s labour markets, as immigration eases labour shortages in some countries such as South Korea and Singapore while emigration helps reduce unemployment in countries such as Indonesia and India. In 2009, the unemployment rate stood at 9.1% in India and 8.0% in Indonesia;
Migrants provide an important channel for the flow of trade, ideas and investment between different countries. Migrants often adopt new consumption habits and bring these habit backs to their origin countries;
- Emigration, however, can create a “brain drain” problem for sending countries. Countries such as the Philippines and India have faced major shortages of skilled workers;
Due to an ineffective management of labour migration, illegal migration has also increased in Asia Pacific. Being associated with human trafficking and labour exploitation, illegal migration causes security problems for host countries and a lack of legal protection for migrant workers;
- Rising labour migration may also cause social tensions in host countries, thus undermining the business environment. In Japan and South Korea, for example, an anti-migrant attitude remains strong due to the countries’ emphasis on maintaining ethnic homogeneity as well as the perceptions of migrant workers as sources of crime and a burden on public services. Foreign citizens accounted for 1.8% and 1.7% of Japan’s and South Korea’s total population in 2009 respectively, lower than in other advanced economies such as Germany (8.8%) or United Kingdom (7.0%).
- Prospects UNDP estimates that the stock of immigrants in Asia will rise from 55.1 million people in 2005 to 61.3 million in 2010, accounting for 28.7% of the world total in 2010, the world’s second largest host region for immigrants after Europe (32.6%);
- Labour migration in Asia Pacific is expected to intensify as a result of globalisation and rising labour shortages caused by population ageing and falling birth rates in the region. The share of the population aged over 65 years old in South Korea, for example, is estimated to rise from 10.7% of total population in 2009 to 15.6% by 2020;
Most human movement in Asia Pacific will remain intra-regional. The Philippines, India and Indonesia will remain the region’s big labour exporters while the number of migrant workers from Vietnam will grow significantly;
- The global economic downturn in 2008-2009 interrupted the growth of labour migration in Asia Pacific as the region’s labour importing countries experienced slowdown and recession. Migrant workers are often the first to be laid off and countries such as South Korea suspended its migrant workers recruitment programs in 2009. Labour migration is expected to resume growth in 2010/2011 as most economies in the region have started recovering;
- Remittances sent by workers are estimated to grow more strongly in 2010/2011, thus benefiting consumer spending and economic growth. Due to the economic downturn, growth of remittances inflows to Asia Pacific slowed from 27.2% growth in 2008 to 1.1% in 2009 in US$ nominal terms;
- Asia Pacific countries have enhanced their cooperation in order to improve migrant workers’ rights and prevent illegal migration. In 2007, ASEAN member countries agreed to implement a Declaration on the Protection and Promotion of the Rights of Migrant Workers;
- While most migration flows within the region are temporary, the trend towards long-term stay has been evident. Yet many Asian governments have not been well prepared to deal with long-term migration issues including permanent resident policies, cultural diversity and social integration.