 Chapteer 5
Currennt Situatio
on of the Flow off Laborerrs within the ASE
EANRegionn―Morre laborerrs flowinng into Siingapore, Malayssia, andThailannd
mada
Miwa Yam
Director, Law and In
nstitution Sttudies Grou
up, Inter-discciplinary Sttudies Centeer,
Institute ofo Developiing Econom
mies【Key Points】
P The flow of lab
borers withinn the ASEA
AN region iss increasingg with two mainmtrendds: laborerss are flowingg into Singaapore and Malaysia,
M
annd laborers
fromm the three neighboringng countries ofo Thailand are flowingg into
Thaiiland.
 The AEC does notn include details on thet flow of low-skilledd or unskilleed
laboorers. In reallity, though , there is a flowfof low-skilled or uunskilled
laboorers based ono bilateral agreementss between th
he sending sstates and thhereceeiving statess, supportedd by econom
mic gaps between variouus ASEAN
counntries. At the same timee, de facto laborlmobiliity outside tthe system (in(otheer words, thee so-called iillegal work
kers who doo not work uunder thepropper legal pro
ocedures) iss prominent.
 The way ASEA
AN’s labor mmarket is forrmed is imp
portant for A
ASEAN as aprodduction basee. It is necesssary for thee ASEAN Member
M
Staates to draw up
a leggal framewo
ork and poliicies that would protect migrant w
workers. Thiis
will also benefiit the mainteenance and improvemeent in produuctivity.

Japan Centerr for Economic Research, 20014 “Asia Ressearch” Reporrt 63

Increease in the movementmof persons within the ASEAN reegion

Note: Stock basis.
Sourcce: United Nattions Departm
ment of Econom
mic and Sociaal Affairs (2013). Created frrom the 1990
version and the 2013 version of Trends in Internation
nal Migrant Sttock: Migrants
ts by Destinatiion
and Origin (United Nation
ns database, P
POP/DB/MIG//Stock/Rev.20
013)

1. In
ntroductionn
By 2015, ASEAN aims to estaablish a singgle market anda producttion base toobuildd a framewoork for smoo
oth flow of goods and capital in orrder to expaand the marrket.
Durinng this proccess, the shaape of the laabor markett (which suppports produuction) has
beenn questionedd.
Within the labor fllow, the mobbility of so--called highh-skilled hum
man resourcces
into tthe labor marketmis connsidered to bbring positiv
ve effects on social weelfare and thheeconnomy withinn the region.. Therefore,, the free flo
ow of this ty
ype of humaan resources isdiscuussed at inteernational negotiations.
n. In ASEAN
N, the AEC Blueprint, w
which is a planpfor economic inttegration by
y 2015, speccifies the free flow of skilledslaborrers. In
accorrdance withh Article V ofo the AFAS
S (ASEAN Frameworkk Agreemennt on Servicees),
whicch is a frameework agreeement relatiing to servicces, Mutual Recognitioon
Arranngements (MMRAs) havve been conccluded for eighteapplicable types oof jobs.1 Th
heMastter Plan on ASEAN
A
Co
onnectivity ((MPAC) – adoptedain OctoberO
20110 – clearlyyoutlinned a plan forf strengthening the mmobility of the people withinw
the A
ASEAN region
1

MR
RAs for engineeers were conccluded in Deccember 2005, nursesnon Deccember 8, 20006, architects andasurvveyors in Novvember 2009, doctors, dentiists, accountan
nts in Februarry 2009, and toourism
professionals in November
N
2012.

64 JJapan Center forf Economic Research “A sia Research”” Reportin the form of physical connectivity, institutional connectivity, and people-to-people
connectivity. Specific measures include: undertaking a study on progressive visa
exemption for ASEAN nationals who travel within the ASEAN region; further
mobilizing skilled workers within the region by further concluding and enforcing
MRAs; concluding the MRA on ICT engineers by the end of 2015; and implementing apilot project to build a pool of skilled laborers within the region. The ASEAN
Agreement on the Movement of Natural Persons (MNP) was signed in November 2012.
The MNP aims to facilitate the movement of natural persons engaged in the conduct oftrade in goods, trade in services and investment between the Member States. The MNP
states that natural persons are those who are business visitors, intra-corporatetransferees, and contractual service suppliers. Although the MNP is an agreement on
the movement of natural persons, it specifies the protection of: the integrity of themember states’ borders, the domestic labor force, and permanent employment in the
territories of the member states. This vividly illustrates ASEAN’s policy of targetingthe movement of only specific natural persons. In other words, the free flow of people– which the AEC lists as a goal – is actually limited to the free flow of professionals,
persons engaged in trade or investment, or visitors.
Meanwhile, the free flow of the so-called low-skilled or unskilled laborers
who do not belong to the abovementioned categories has not been included in thediscussions at the negotiations for the AEC.2 In reality, the ASEAN region is seeing asignificant rise in the mobility of low-skilled and unskilled laborers, and this is
influencing the politics, societies, and economies of the ASEAN Member States. The
receiving states of migrant workers have respective labor migration policies that deal
with which types of low-skilled or unskilled laborers to accept from outside thecountry and how to treat them.3 Similarly, the labor-sending states have a variety oflabor export policies on how to send their own workers outside the country and how toprotect their rights. It is clear that the process of developing and implementing policies
to liberalize goods, capital, and people within the region in advance of the2

Workers who are not categorized by specific skills or qualifications are grouped as “low-skilled or
unskilled workers.” They are also referred to as manual laborers.
3
In this chapter, “migrant workers” refer to “those who left the country or region where they were born,or those who moved to a country or a region that is not their country of nationality for the purpose ofworking.” Both policies of sending and receiving states regarding these workers in general will bereferred to as “migrant worker policy.” Here, “migrants” will be used to refer to both immigrants andemigrants. It does not mean “migrants” in the narrow sense, as a legal term of a traditional immigrantnation of foreigners who were granted permanent residency when entering a country.

Chapter 5 | Current State of Flow of Laborers within the ASEAN Region 65

establishment of the AEC has not included discussions on the movement of low-skilled
or unskilled laborers.
This chapter will examine the flow of the so-called low-skilled and unskilledlaborers, which is already becoming more active, even though they are excluded fromthe AEC targets. There are no accurate and comprehensive data on the actual
movement of laborers within the ASEAN region. Using the limited data available, thischapter will analyze the current situation of the movement of laborers in the ASEAN
region.
2. Overview of labor mobility in the ASEAN region
2.1 Movement of the people in the ASEAN region
First, let us look at how the number of migrants (stocks) in two ASEAN
countries account for compared to the total number of migrants, including those fromoutside the ASEAN region. This will be calculated using the United Nations’ estimateddatabase on the number of migrants by origin and by destination between each country
and region. The number of migrant stock shown in this data does not strictly match thedefinition of the number of migrant workers (foreign workers) that this chapter focuseson. However, it gives a general overview of the trend of the outflow of migrants froman ASEAN Member State to another ASEAN Member State or outside the ASEAN
region, and the inflow of migrants from the ASEAN Member States or outside theASEAN region to an ASEAN Member State. If it is assumed that the percentage of
ASEAN’s intra-regional figure is higher than that of the world (including outside theASEAN region), then that would mean that the de facto integration level regarding the
movement of the people within the ASEAN region has increased. In this case, it can beobserved that the intra-regional percentage has definitely risen from 1990, 2000, and2013.4
From a viewpoint of sending countries, the number of ASEAN nationals who
migrated to another ASEAN countries divided by the total number of ASEAN
nationals who migrated to other countries (including ASEAN) was 20.1% in 1990,
28.8% in 2000, and 34.2% in 2013. From a receiving point of view, the number of
4

United Nations, Department of Economic and Social Affairs (2013). Versions of 1990, 2000, and 2013of the Trends in International Migrant Stock: Migrants by Destination and Origin (United Nations
database, POP/DB/MIG/Stock/Rev.2013) were used.

66 Japan Center for Economic Research “Asia Research” ReportASEAN national migrants in ASEAN countries divided by the total number of
migrants from all over the world (including ASEAN) was 47.8% in 1990, 63.0% in
2000, and 68.6% in 2013. This indicates that the movement of the people within the
ASEAN region has certainly been increasing over the last 20 years. Whether it isoutbound or inbound, the movement of the people of the ASEAN region has increasedin number and in percentage in the world total, which also show that the movement of
the people within the ASEAN region is becoming more active.
However, there are significant differences between the ASEAN countries thathave high and low ratios of migrants from other ASEAN nations. For instance, as thecountry of origin (or migrant-sending state), the Philippines’ ASEAN ratio is low atunder 10% and is decreasing every year. This illustrates that Filipino people are
migrating more to non-ASEAN countries rather than to other ASEAN countries.
Another sending state, Myanmar had a high ratio of over 80% in 2013. On the other
hand, the percentage of ASEAN nationals in Singapore, a destination country of
migrants (or a receiving state) was 30% in 1990, 50% in 2000, and 53% in 2013.
Similarly, the percentage of ASEAN nationals in Thailand, another receiving state, washigh at 93% in 1990, 95% in 2000, and 96% in 2013.
2.2 Overview of the movement of workers in the ASEAN region
The movement of workers in the ASEAN region can be divided into two main
movements: workers moving to Singapore and Malaysia, and workers moving toThailand. As of 2013, there were 1.32 million foreign workers in Singapore and 2.11
million foreign workers in Malaysia, the two main receiving states. The Singapore
government’s statistics do not reveal the number of migrant workers by origin country,
but the data on labor-sending countries within the ASEAN region can be used toestimate that many foreign workers in Singapore are from Malaysia, Indonesia, andMyanmar. In Malaysia, 40% of foreign workers (approximately 940,000 people) arefrom Indonesia and from other ASEAN countries, with 120,000 workers coming from
Myanmar. While Singapore and Malaysia receive workers from outside the ASEAN
region, Thailand restricts the country of origin to be Myanmar, Laos, and Cambodia.
As of October 2014, the number of migrant workers in Thailand totaled 2.77 million
people, with approximately 1.7 million coming from Myanmar, 270,000 from Laos,and 800,000 from Cambodia.
The destinations for workers migrating outside the ASEAN region are mainly

Chapter 5 | Current State of Flow of Laborers within the ASEAN Region 67

to the Middle East, Taiwan, Hong Kong, and South Korea. A striking number of
migrant workers from outside the ASEAN Member States are from South Asian
countries such as Bangladesh, Nepal, India, and Sri Lanka.
2.3 The structure of laborer-receiving states vs. laborer-sending states in the
ASEAN region
As stated in Chapter 1, although the gap is being reduced, there is still an
economic gap between the ASEAN Member States. This economic gap has resulted in
the workers move from a lower GDP per capita country to a higher GDP per capita
country. As stated earlier in this chapter, there are two main trends for the movement oflaborers. The first one is the movement of laborers from Indonesia and other countries
to Singapore and Malaysia. The second one is the movement of laborers from
Myanmar, Laos, and Cambodia (Thailand’s three neighboring countries) to Thailand.
The ASEAN Member States can be categorized into the following threegroups in terms of their policies on the movement of laborers, based on their economic
development stages (RTWG 2008). The countries in the first stage of economic
development are those with a high population growth rate and a high birth rate, but arelatively young population and a low urbanization rate. These countries are namely
Cambodia, Indonesia, Laos, Myanmar, the Philippines, and Vietnam. The policies onlabor migration in these countries focus on how to send their people to foreigncountries as laborers, how to protect their own people in foreign countries, andremittances to their original countries. By contrast, countries in the third stage of
economic development have a low population growth rate and a low birth rate, but anaging population, a high urbanization rate, and a high GDP per capita. These countries
include Brunei, Singapore, and Malaysia. The policy challenges for these countries are
how to manage migrants who flow in, the outflow and inflow of skilled humanresources, migrant integration in the receiving societies, and measures against
undocumented migrants (the so-called illegal migrants who do not have legal
documents). The sole country in the second stage of economic development is
Thailand. Thailand’s characteristics are decreasing population growth, an increasingly
aging population, a high urbanization rate, increasing GDP per capita, and a lower
birth rate compared to the countries in the first stage. Thailand faces policy challenges
of countries in both the first stage and the third stage.

68 Japan Center for Economic Research “Asia Research” Report

3. Institutional framework on the labor mobility within the ASEAN region
As mentioned in the beginning, ASEAN does not have a multilateral system inthe form of regional cooperation regarding low-skilled and unskilled laborers. EachASEAN Member State holds individual policies relating to the receiving of foreign
workers or sending of workers from their own country. Therefore, there existsamixture of bilateral agreements and memoranda between the receiving and sending
states like a spaghetti ball.
3.1 The lack of framework in ASEAN and varying legal systems in each ASEAN
Member State
Since there are multiple policy targets, the migrant labor policies in each
ASEAN Member State vary in provisions and implementation of laws and regulations.
As a basis for sending laborers, Indonesia, one of the biggest sending country, has the“Placement and Protection of Indonesian Workers Abroad” (Law No. 39/2004), which
focuses on the protection of Indonesian workers. On the other hand, Cambodia, anewly emerging labor-sending country, has “Sub Decree 190 on the Management of
the Sending of Cambodian Workers Abroad Through Private Recruitment Agencies” ,which does not state many stipulations on the protection of Cambodian workers.
With regard to the labor-sending agencies, the Philippines – which has
traditionally been a labor-sending country – established the Philippine Overseas
Employment Agency, which is exclusively in charge of sending Filipino workers
overseas under the Department of Labor and Employment. On the other hand, while
Indonesia – which is trying to imitate the policy of the Philippines – established the
National Board for the Placement and Protection of Indonesian Overseas Workers,
several government agencies manage the sending of industry-specific workers. In
Cambodia and Vietnam, the Department of Labors handles issues on sending workers.
Regarding the legal systems of the labor receiving states, while Malaysia has
included titles and sections on the employment of foreign workers in their general law
on employment, Singapore and Thailand have separate laws on the employment andworking of foreign workers. Compared to the sending of workers, the receiving ofworkers involves more government agencies. This shows that the receiving of foreign
workers impacts the society, economy, and politics of the receiving country, and at thesame time, shows the difficulty of forming consensus on their policies.

Chapter 5 | Current State of Flow of Laborers within the ASEAN Region 69

What connects the labor-sending countries and the labor-receiving countries isplural bilateral agreements and memoranda within the ASEAN region. With regard to
the policies on migrant workers in the ASEAN Member States, both the labor-sending
countries and the labor-receiving countries look at migrant workers primarily from an
economic standpoint as the premise for policies. The receiving states of migrant
workers focus on the temporary supply of workers and place migrant workers as abuffer for a flexible labor market that fluctuates with the economy. Bilateralmemoranda enable migrant workers to find jobs and become employed based onprescribed procedures. It is also supposed to function to restrict and manage theoutflow and inflow of migrant workers by each government. However, in reality, along-term dependency on foreign workers is becoming more persistent. Furthermore,
there are a number of so-called illegal workers who depart, enter, and work without
legal documents and not through the prescribed routes as provided by bilateralagreements.
Figure 1: Laws Relating to the Sending of Workers Overseas from ASEAN’s
Sending States and Laws Relating to the Employment of Foreign Workers in
ASEAN’s Receiving States
Laws of the Sending States Relating to the Sending of Workers Overseas and the Employment of Foreign Workers
Indonesia
Placement and Protection of Indonesian Workers Abroad (Law No. 39/2004)
The Philippines

Migrant Workers and Overseas Filipinos Act of 1995

Vietnam

Law on Vietnamese Guest Wqorkes (2006)

Cambodia

Sub-Decree 190 on The Management of the Sending of Cambodian Workers Abroad
Through Private Recruitment Agencies (2011)

Myanmar

The Law Relating to Overseas Employment of 1998 (The State Peace and Development
Council Law No. 3/99)

Laws of the Main Receiving States Relating to the Employment of Foreign Workers
Singapore

Employment of Foreign Manpower Act (1990)

Malaysia

Employment Act 1955 (Part XIIB: Employment of Foreign Employees, amended in 1998)

Thailand

Alien Working Act (2008)

Source: Created by the author.

3.2 The ASEAN Declaration on the Protection and Promotion of the Rights ofMigrant Workers of 2007
The ASEAN region has already experiemced an active movement of workers;

70 Japan Center for Economic Research “Asia Research” Reporthowever, as previously mentioned, there is no reference to low-skilled or unskilledlaborers in the plan for economic integration by 2015. The ASEAN Declaration on theProtection and Promotion of the Rights of Migrant Workers of 2007 (which was
adopted at the 12th ASEAN Summit) is a declaration that will serve as a common
ground for both the labor-sending countries and the labor-receiving countries in the
ASEAN region. At the same time, the declaration is a compromise between thesending states and the receiving states. The sending states demand the protection ofhuman rights and the improvement of the employment environment of the workers sentfrom their countries. On the other hand, the receiving states desire to manage migrant
workers because they fear negative impacts on their own social economies; therefore,
they are only willing to accept as many migrants as will help their economies. The
declaration calls for cooperation, but does not make the member states bear legal
obligations between the countries. Still more, the scope of the declaration does notinclude undocumented migrant workers and, as is clearly stated, it does not intend to
regularize undocumented migrant workers.5 This demonstrates the cautious attitude of
the member states, particularly receiving states in ASEAN.
3.3 Drafting by the ASEAN Committee on the Implementation of the ASEAN
Declaration on the Protection and Promotion of the Rights of Migrant Workers(ACMW) – will it transform from a declaration to a treaty?
The ASEAN Committee on the Implementation of the Declaration on theProtection and Promotion of the Rights of Migrant Workers (ACMW) was establishedin April 2007 by the ASEAN Ministers of Foreign Affairs in order to implement theASEAN Declaration on the Protection and Promotion of the Rights of MigrantWorkers of 2007. The aim of the ACMW is (1) to ensure commitments made under the
Declaration on Migrant Worker Rights are implemented and (2) to develop an ASEAN
instrument for the protection and promotion of the rights of migrant workers.
Under the ACMW, an ASEAN drafting team (ACMW-DT) was convened.
The drafting team was composed of representatives from Malaysia and Singapore(receiving states) as well as the Philippines and Indonesia (sending states) and the firstmeeting was held in Bangkok in April 2009. In 2010, the ACMW-DT was expanded to5“4. Nothing in the present Declaration shall be interpreted as implying the regularisation of the situationof migrant workers who are undocumented.”

Chapter 5 | Current State of Flow of Laborers within the ASEAN Region 71

include all the ASEAN Member States in order to break the deadlock of the drafting
process. In 2012, a “Zero-Draft” was completed and since then, negotiations inachieving consensus among the Member States on each article have taken place. As ofwriting, there is still no consensus on two stipulations. One is whether the instrument
should be legally binding and the second matter is whether the scope the instrument
should include undocumented migrant workers.
Figure 2: Agreements in ASEAN Relating to Migrant Workers
1997

ASEAN Declaration on Transnational Cooperation by the Ministers of Interior/Home
Crime
Affairs on illegal migration and the trafficking of
persons

1998

Hanoi Plan of Action

Replacing the Hanoi Plan of Action, a documentthat incudes commitments to develop an ASEAN
instrument on the protecting and promoting therights of migrant workers

1999

Bangkok Declaration on Irregular
Migration*

Commitments relating to addressing migration,
particularly irregular migration, in acomprehensive and balanced manner, andpreventing trafficking of persons.

2004

ASEAN Declaration Against
Trafficking in Persons Particularly
Women and Children

Regional cooperation to prevent and combat
trafficking in persons

2004

Vientian Action Programme

Successor of the Hanoi Plan of Action. It is an
evolving document that includes commitmentsfor promoting and protecting the rights of migrant
workers

2007

ASEAN Declaration on the Protection
Commitments on the protection and promotion
and Promotion of the Rights ofof the rights of migrant workers
Migrant Workers
The abovementioned declaration is stated in the
ASEAN Socio-Cultural Community Blueprint.

2009*In addition to ASEAN Member States, Australia, Bangladesh, China, Japan, South Korea, New Zealand,
Papua New Guinea, Sri Lanka, and Hong Kong have signed.
Source:http://humanrightsinasean.info/asean-committee-migrant-workers/about.html

4. The current situation of foreign workers from the viewpoint of major receiving
states
4.1 Singapore
As of 2013, Singapore’s population was 5.3 million. Out of 3.36 million
workers as of the end of 2012, about 38% (or 1.27 million people) were foreign
workers. In 1968, Singapore introduced the foreign workers permit system as it was

72 Japan Center for Economic Research “Asia Research” Reportexperiencing a shortage of workers due to industrialization. Although workers mainly
came from Malaysia when the system was introduced, it has since shifted to include
Thailand, India, Bangladesh, the Philippines and Indonesia. In the 1980s, Singapore
started managing the employment of foreign workers by imposing a Foreign Worker
Levy and setting an upper limit on the total number of migrant workers. For example,
the “Employment of Foreign Manpower Act (Chapter 91A)” enacted in 1990 requires
foreigners to obtain work passes. Professional and skilled workers are issued
Employment Passes (EPs), mid-skilled workers are issued S passes, and low-skilledworkers are issued Work Permits (WPs). Singapore specifies types of work passes thatthe foreigners can obtain by their country of origin. For instance, Singapore specifies
that WP holders must be from Malaysia, a traditional source of unskilled labor that has
had a long history with Singapore, and from non-traditional sources such as India, Sri
Lanka, Thailand, Bangladesh, Myanmar and the Philippines.
Figure 3: Foreign Workforce Numbers in Singapore(By pass type, in number of people)

Pass type
Employment Pass (EP)S PassWork Permit (WP)
Work Permit (foreign domestic worker)
Work Permit (construction)
Total

2007
2008
2009
2010
2011
2012
2013
99,200 113,400 114,300 143,300 175,400 173,800 175,100
44,50074,30082,80098,700 113,900 142,400 160,900
757,100 870,000 856,300 871,200 908,600 952,100 985,600
183,200 191,400 196,000 201,400 206,300 209,600 214,500
180,000 229,900 245,700 248,100 264,500 293,400 319,100
900,800 1,057,700 1,053,400 1,113,200 1,197,900 1,268,300 1,321,600

Source: Created from “Foreign Workforce Numbers” published by the Ministry of Manpower.
http://www.mom.gov.sg/statistics-publications/others/statistics/Pages/ForeignWorkforceNumbers.aspx

4.2 Malaysia
In 2014, it is estimated that Malaysia’s population exceeded 30 million people.
As of September 2013, the number of legal foreign workers in Malaysia reached 2.11
million. By industry, 733,000 foreign workers have jobs in manufacturing, which
accounted for 35% of the total number of foreign workers in Malaysia. By nationality,
Indonesian workers make up the largest share with 935,000 people, which accounted
for 44% of the total.6
6

The Malaysian Indicator, “Malaysian, not foreigners, behind most crimes, says Home Minister” 30
October, 2013.

Chapter 5 | Current State of Flow of Laborers within the ASEAN Region 73

In the latter half of the 1980s, Malaysia experienced a full-fledged
industrialization and had a shortage of workers. In the 1990s, Malaysia allowed foreign
workers to be employed not only in sectors such as plantation, agriculture, construction,and domestic labor, but also in manufacturing and services. In 1998, the Employment
Act of 1955 was amended to include Part XIIB, “Employment of Foreign Employees.”
As a result, the employment of foreign workers was institutionalized, a situation which
has continued through today. The five sectors in which foreigners are allowed to be
employed in Malaysia are (1) manufacturing, (2) plantation, (3) agriculture, (4)construction, and (5) services. Currently, foreign workers are allowed to obtain permits
to work in 3 subsectors of services: (1) restaurant (cooks), (2) cleaning and sanitation,and (3) resort island. Only nationals of the listed 14 countries are allowed to work in
Malaysia, and within those,

ASEAN Member States are Indonesia, Cambodia,

Myanmar, Laos, Vietnam, Thailand, and the Philippines. Another type of work is adomestic helper and for this, a separate procedure is necessary.
Figure 4: Malaysia’s Approved Foreign Worker Source Countries in the
Designated Sectors
Thailand, Cambodia, Myanmar, Laos,
Vietnam, Kazakhstan, Nepal, Pakistan,
Sri Lanka, Turkmenistan, Uzbekistan

The
Philippines

India

Both male and female

Male only

Both male andfemaleMale

FemaleSectors
Manufacturing
Plantation
Agriculture

○
○
○

○
○
○

○
○

○
○

○
○
○

Services○○○(Restaurants)○○

Construction○○○(High-tension cable)○○

GenderIndonesia

Source: Created from “Service Information” from the Foreign Workers Management Division of Ministryof Home Affairs.
http://www.moha.gov.my/index.php/en/bahagian-pa-maklumat-perkhidmatan

4.3 Thailand
In 2012, Thailand’s population was 66,780,000 people with a total workforceof 39,530,000. The flow of migrant workers from Myanmar, Laos, and Cambodia(Thailand’s three neighboring countries) has increased since the early 1990s, when
Thailand advocated changing the Indochinese Peninsula from a battlefield to a market

74 Japan Center for Economic Research “Asia Research” Reportat the end of the Cold War. Thailand’s border – which had been closed up to that point– opened and it shifted its economic policy to export-oriented industrialization. As the
movement of workers from rural areas to Bangkok or industrial areas accelerated,unskilled laborers needed in a labor-intensive industries were scarce, and so to fill thatvacancy, workers from neighboring countries flowed into Thailand. The number of
migrant workers has been increasing along with Thailand’s economic growth. In theearly 1990s, the Thai government did not have policies that officially allowed unskilledmigrant workers. However, due to the demand from the business community thatneeded to employ migrant workers from Myanmar, Thailand introduced a system in1992 to codify the existing state of affairs, in which unskilled workers from Myanmar
could register and be granted work permits. Thailand concluded a bilateralmemorandum regarding the employment of workers with Laos in 2002, and with
Cambodia and Myanmar in 2003. Thailand has limited foreign workers to only thesethree countries. Foreign workers in Thailand can be categorized into the following
legal statuses. (1) Foreign workers who use a legal route to enter and work inaccordance with the bilateral memorandum, (2) foreign workers who illegally entered
and work in Thailand without official documents, but who have completed the legal
processes which requires to prove their nationalities as prescribed by the Thaigovernment, and (3) foreign workers who have not completed the abovementioned
process, but have registered.7 As of October 2014, the number of foreign workers who
have entered and are working in accordance with the bilateral memoranda between
Thailand and the sending states are 248,964 people. The number of foreign workers
who have completed the proof of nationality and are legally staying and working in
Thailand is 1,084,978 people. There are 1,437,037 people who have registered but not
yet completed the process. The total number of foreign workers from the threeneighboring countries in Thailand is 2,077,979 people as of October 2014.8
The main sectors in which migrant workers work are agriculture, fishing, foodprocessing, manufacturing, construction, and domestic labor.
Approximately 60% of the total foreign workers in Thailand from the three
countries are from Myanmar. More Burmese workers work in the marine productprocessing industry than any other industry in Thailand; they account for over 90% of
the foreign workers in Thailand’s marine product processing industry. Laotian people
7
8

See Yamada (2014) for details on Thailand’s labor receiving policies.
Sources from Thailand’s Department of Employment (DOE), Ministry of Labor.

Chapter 5 | Current State of Flow of Laborers within the ASEAN Region 75

account for approximately 10% of the total foreign workers from the three countries. A
significant number of Laotian people work in the domestic labor sector, and followingthat are agriculture and construction. Most Cambodian workers work in construction,then agriculture and fishing.
According to Thailand’s Ministry of Labor, the official percentage of foreign
workers in Thailand’s workforce is low compared to countries that are large receiving
states of foreign workers. Therefore, the government sees Thailand’s economy as
mainly driven by domestic labor power and a part of its economic growth has been
supplemented byinexpensive low-skilled workers from the three neighboring

countries (ILO 2013, 49). Although it is not reflected in the official statics, the reality
is that Thailand is heavily dependent on foreign workers.
5. Current situation of overseas labor from the viewpoint of the sending states9
5.1 Indonesia
The movement of labor from Indonesia to Malaysia is one of the big trends oflabor mobility within the ASEAN region. In 2012, Indonesia had a population of
246,086,000 people. Compared to this abundant labor force, employment opportunities
in Indonesia are limited. Since the 1990s, Indonesia has become a major sending stateof workers in Southeast Asia on par with the Philippines. Since 2000, Indonesian
workers participating in the nursing and caretaker industry have significantly increased
and account for nearly 70% of foreign domestic workers and nurses in East Asia. In
Singapore, about 100,000 people(which is half of the 200,000 foreign domestic
workers) are Indonesians, and in Malaysia 280,000 people (80%) out of approximately
350,000 foreign domestic workers are Indonesians. Indonesia has frozen the sending ofworkers to Malaysia since 2009 due to the frequent abuse of Indonesian domestic
workers in Malaysia. Therefore, the number of new workers sent to Malaysia peaked in2007 at 222,203 Indonesians. Since then, it has decreased to 133,904 Indonesians in
2011. Although the trend has been downward, Indonesian workers still account for the
majority of foreign workers in Malaysia.
Indonesia regards the labor-sending policies of the Philippines leading interms of the protection of nationals working overseas. Furthermore, Indonesia signed
9

In this section, details on Indonesia came from Okushima (2014), details on the Philippines came from
Chibana (2014), and details on Vietnam came from Ishizuka (2014).

76 Japan Center for Economic Research “Asia Research” Reportthe International Convention on the Protection of the Rights of All Migrant Workers
and Members of their Families (ICRMW) in 2004 and ratified it in 2012. Indonesia
and the Philippines are the only countries to ratify the ICRMW, not only in ASEAN
but in all of Asia.
5.2 The Philippines
The Philippines is the largest labor-sending state among the ASEAN Member
States due to an abundant labor force. In 2012, the population of the Philippines was
96.7 million. In 2001, the number of Filipino workers sent overseas was approximately
870,000, but in 2010, it increased by about 1.7 times to 1.47 million people. The main
receiving state of Filipino workers has continuously been the Middle East. In 2010,
approximately 680,000 Filipinos were sent to the Middle East, and Saudi Arabia
accepted the largest number at 293,000 Filipino workers. Hong Kong follows Saudi
Arabia with approximately 100,000 Filipino workers. Within the ASEAN region, thePhilippines sent approximately 70,000 workers to Singapore, 10,000 workers to
Malaysia, and approximately 8,000 workers to Brunei.
A labor-sending system was stipulated by the “Republic Act No. 8042 MigrantWorkers and Overseas Filipinos Act of 1995.” For a country where remittances byworkers overseas support 10% of the GDP, the protection of Filipino workers overseas
is an important policy issue that leads to a stable support base of the administration.
The Philippines ratified the ICRMW before the rest of the world, and within the
ASEAN region, it has taken a lead in establishing a framework on the protection andpromotion of the rights of migrant workers.
5.3 Vietnam
In 2012, Vietnam’s population exceeded 90 million. In the 1980s, unskilledlaborers were sent overseas due to the labor agreements held between Vietnam andsocialist countries such as the Soviet Union and East Germany. With the dissolution of
the Soviet Union, the Vietnamese government changed its policy on migrant workers.
In 1991, Decree 370 allowed for licensed labor-export businesses and Vietnam started
to actively export their workforce overseas. The Law on Vietnamese Guest Workers
was enacted in 2006 and includes details on recruitment agencies sending workers
overseas, contracts, fees, guarantors, and the repatriation and reintegration of workers
after their return to Vietnam. In recent years, Vietnam has been sending approximately

Chapter 5 | Current State of Flow of Laborers within the ASEAN Region 77

100,000 workers abroad annually and Taiwan receives the most Vietnamese workers,
followed by Malaysia.
Vietnam concluded a bilateral agreement with Malaysia in 2003 and started to
officially send workers. Ninety percent of Vietnamese workers who are sent to
Malaysia work in manufacturing. Due to work related accidents, frequent deaths ofworkers, and lower wages in Malaysia compared to East Asian countries such as
Taiwan, fewer Vietnam workers are currently being sent to Malaysia. In turn, more
Vietnamese workers are moving to Taiwan.
6. Outlook and challenges of the future
The ASEAN Economic Community – which is scheduled to be established by2015 – aims to develop ASEAN that is a single market and production base, a highly
competitive economic region, a region of equitable economic development, and aregion fully integrated into the global economy. For all of these targets, the way thelabor market is shaped and the availability of the workforce matter inevitably. In orderto establish a single production base, the free flow of workers within the region should
be possible along with the liberalization of goods, capital, and services. A common
policy on mobility of workers in the ASEAN region is extremely important. However,as previously mentioned, in the current framework of the AEC, the intra-regional
mobility of workers is not discussed with the exception of certain professional jobs.
Each ASEAN Member State with different industrial structures and demographics has
individual policies and systems regarding the receiving of foreign workers and thesending of its own citizen workers overseas. Although there is a system of bilateralagreements between the receiving states and the sending states, there has been no
discussion on establishing a framework of ASEAN as a whole in terms of the mobilityof workers because of the conflict of interests between the receiving states and thesending states. In reality, mutual dependency is high between the two in ASEAN
Member States. In particular, Thailand – which is limiting the origins of workers to thethree neighboring ASEAN countries – has a significantly high dependency on theseworkers. However, since policies on migrant workers in each country assume that
foreign workers are temporary workforce, questions remain about the rights andwelfare of the workers.

78 Japan Center for Economic Research “Asia Research” Report

The workers in the ASEAN region are integrated into the production network,
which exists to let other ASEAN countries take advantage of wage gaps between
countries. Burmese workers are working at an outsourced factory of aJapanese-affiliated company in Malaysia, and Cambodian workers are employed by asubcontractor of a contracted construction company in Thailand. It is necessary for
those investing in ASEAN to further deepen their knowledge about the employment offoreign workers in order to secure workers in the local labor market. The demand forforeign workers is not only rising within the ASEAN region, but also from outside theregion. In order for ASEAN to become an attractive single market and production base,
it is necessary to secure high quality workers, or in other words, a sound labor market.
Whether member states can agree on a legally binding regional instrument regarding
the protection and the promotion of the rights of migrant workers – which is currently
under discussion – is an extremely important question that will decide how ASEAN
can move forward toward further integration.
References
Chibana, I. (2014). Philippines’ Labour Sending Policies and Laws: Its Experience andPerspectives as the Biggest Sending Country. Higashi Asia ni okeru
Iminrodosha no Hoseido: Okuridashikoku to Ukeirekoku no Kyotsukiban no
Kochiku ni mukete (Laws and Labour Migration Policies in East Asia: Seekinga Common Platform of Sending and Receiving Countries) (M. Yamada, Ed.).
IDE-JETRO.
ILO. (2013). Thailand – A Labour Market Profile. Bangkok: ILO Regional Office for
Asia and the Pacific.
Ishizuka, F. (2014). International Labour Migration in Vietnam: ‘Desertion’ Problem
and Labour Sending and Receiving Systems. Higashi Asia ni okeru
Iminrodosha no Hoseido: Okuridashikoku to Ukeirekoku no Kyotsukiban no
Kochiku ni mukete (Laws and Labour Migration Policies in East Asia: Seekinga Common Platform of Sending and Receiving Countries) (M. Yamada, Ed.).
IDE-JETRO.
Okushima, M. (2014). Indonesia’s Labour Sending Policies and Laws: Practice ofMigrant Workers Law and Development of ‘Human Rights’ in Democratic
Reforms Process. Higashi Asia ni okeru Iminrodosha no Hoseido:

Chapter 5 | Current State of Flow of Laborers within the ASEAN Region 79

Okuridashikoku to Ukeirekoku no Kyotsukiban no Kochiku ni mukete (Lawsand Labour Migration Policies in East Asia: Seeking a Common Platform of
Sending and Receiving Countries) (M. Yamada, Ed.). IDE-JETRO.
Regional Thematic Working Group on International Migration including Human
Trafficking. (2008). Situation Report on International Migration in East andSouth-East Asia. Bangkok: IOM, Regional Office for Southeast Asia.
Yamada, M. (2014). Thailand’s Labour Receiving Policies and Laws: As the Center in
the Great Mekong Sub-region. Higashi Asia ni okeru Iminrodosha no Hoseido:
Okuridashikoku to Ukeirekoku no Kyotsukiban no Kochiku ni mukete (Lawsand Labour Migration Policies in East Asia: Seeking a Common Platform of
Sending and Receiving Countries) (M. Yamada, Ed.). IDE-JETRO.

80 Japan Center for Economic Research “Asia Research” Report