Labour Mobility in the Asia-Pacific Region: Dynamics, Issues and a New APEC Agenda 9789812308955

Table of contents :
Contents
Foreword
Preface
List of Tables
List of Figures
List of Acronyms
Executive Summary
Chapter 1. Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis
Chapter 2. Demographic Change and International Labour Mobility in Northeast Asia – Issues, Policies and Implications for Cooperation
Chapter 3. Demographic Change and International Labour Mobility in Southeast Asia – Issues, Policies and Implications for Cooperation
Chapter 4. Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation
Chapter 5. Demographic Change and International Labour Mobility in the Pacific Americas – Issues, Policies and Implications for Cooperation
Appendix I. PECC Case Study Team on International Labour Mobility
Appendix II. PECC-ABAC Joint Task Force on International Labour Mobility
About the Contributors
References
Index

Citation preview

Labour Mobility

ill the

Asia-Pacific Region

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The Pacific Economic Cooperation Council (PECC) is one of the AsiaPacific’s most influential organizations. Since its foundation in 1980 it has been a policy innovator in trade, finance, information technology and capacitybuilding, among others. PECC brings together leading thinkers and decisionmakers from government and business in an informal setting to discuss and formulate ideas on the most significant issues facing the Asia-Pacific. PECC is the only non-government official observer in APEC. For more details visit http://www.pecc.org. The APEC Business Advisory Council (ABAC) was created by the APEC Leaders in 1995 to advise APEC on the implementation of its agenda and provide the business perspective on specific areas of cooperation. ABAC comprises of up to three members from each of APEC’s 21 member economies representing a range of business sectors. ABAC holds an annual dialogue with the APEC Leaders and regular discussions with APEC ministers in charge of trade, finance and other economic matters. For more details visit http://www.abaconline.org. The Korea National Committee for Pacific Economic Cooperation (KOPEC) is a non-profit organization formally created in 1981 to represent Korea in the Pacific Economic Cooperation Council (PECC). KOPEC draws its members mainly from the academia, the business community, and the government. Since its founding, KOPEC has been an active contributor to the work of PECC. KOPEC coordinated the work of PECC on trade issues during 1983-1986, founding the PECC Trade Policy Forum in 1986. KOPEC also coordinated the work of PECC on financial issues during 2001-2005, founding and running the PECC Finance Forum. In recent years, KOPEC has been strengthening its domestic work program on regional economic integration in order to build support at home for community-building in the Asia-Pacific. For more details visit http://www.kopec.or.kr.

The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment. The Institute’s research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS). ISEAS Publishing, an established academic press, has issued almost 2,000 books and journals. It is the largest scholarly publisher of research about Southeast Asia from within the region. ISEAS Publishing works with many other academic and trade publishers and distributors to disseminate important research and analyses from and about Southeast Asia to the rest of the world.

Labour Mobility in the

Asia-Pacific Region Dynamics, Issues and a New APEC Agenda

A Survey and Analyses of Governance Challenges on Labour Migration for APEC Economies

Editors

Graeme Hugo and Soogil Young Coordinated by KOPEC Korea National Committee for Pacific Economic Cooperation

A Joint Study by the Pacific Economic Cooperation Council and the APEC Business Advisory Council

Institute of Southeast Asian Studies Singapore

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First published in Singapore in 2008 by ISEAS Publishing Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Singapore 119614 E-mail: [email protected] Website: http://bookshop.iseas.edu.sg All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. © 2008 Korea National Committee for Pacific Economic Cooperation, Pacific Economic Cooperation Council, and APEC Business Advisory Council The responsibility for facts and opinions in this publication rests exclusively with the authors and their interpretations do not necessarily reflect the views or the policy of KOPEC, PECC, ABAC, ISEAS or their supporters. ISEAS Library Cataloguing-in-Publication Data Labour mobility in the Asia-Pacific region : dynamics, issues and a new APEC agenda : a survey and analyses of governance challenges on labour migration for APEC economies / edited by Graeme Hugo, Soogil Young. 1. Labor mobility—Asia. 2. Labor mobility—Pacific Area. 3. Labor policy—Asia. 4. Labor policy—Pacific Area. 5. Asia—Emigration and immigration—Government policy. 6. Pacific Area—Emigration and immigration—Government policy. I. Hugo, Graeme J. (Graeme John), 1946-. II. Young, Soogil. III. Asia-Pacific Economic Cooperation (Organization). IV. Title HD5717 L12 2008 ISBN 978-981-230-893-1 (soft cover) ISBN 978-981-230-894-8 (hard cover) ISBN 978-981-230-895-5 (PDF) Typeset by Janet Wall, the University of Adelaide Printed in Singapore by Utopia Press Pte Ltd

Contents

Contents Foreword................................................................................................................. vii Preface.......................................................................................................................ix List of Tables .......................................................................................................... xiii List of Figures ..........................................................................................................xv List of Acronyms.................................................................................................... xvii Executive Summary.................................................................................................xix Chapter 1 Demographic Change and International Labour Mobility in AsiaPacific – Implications for Business and Regional Economic Integration: Synthesis Graeme Hugo ....................................................................................................1 Chapter 2 Demographic Change and International Labour Mobility in Northeast Asia – Issues, Policies and Implications for Cooperation Jai-Joon Hur ...................................................................................................63 Chapter 3 Demographic Change and International Labour Mobility in Southeast Asia – Issues, Policies and Implications for Cooperation Chia Siow Yue .................................................................................................93 Chapter 4 Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation Graeme Hugo, Paul Callister, and Juthika Badkar ....................................131 Chapter 5 Demographic Change and International Labour Mobility in the Pacific Americas – Issues, Policies and Implications for Cooperation Sherry Stephenson.........................................................................................171 Appendix I: PECC Case Study Team on International Labour Mobility ............201 Appendix II: PECC-ABAC Joint Task Force on International Labour Mobility .........................................................................................................203 About the Contributors ..........................................................................................205 References ..............................................................................................................209 Index .......................................................................................................................223

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Preface

Foreword Driven by demographic changes, and reinforced by intensifying globalization, international labour mobility has been on the rise in recent decades in the Asia-Pacific region. Demographic and economic projections show that labour migration in the region will, if anything, have to accelerate over time. It seems that, after trade and investment, labour mobility constitutes the final frontier for regional integration among the Asia-Pacific economies. Economic analyses show that the international movement of labour benefits both the net labour origin economies and the net labour destination economies, not to mention the migrant workers themselves. In reality, however, such flows are associated with political and social problems in both types of economies. Individual governments react and respond, often in ways that increase business costs, forego overall net benefit from labour movements, fail to protect migrants from exploitation, and fail to support the kind of educational and socialization efforts that would smooth the integration of migrants into new home communities. Despite demonstrative needs for immigration in some Asia-Pacific economies, heavy dependence on migrant remittances in others, and heated domestic political debates over migration, to our knowledge, there has been no major region-wide discussion of the issues associated with international labour mobility in the Asia-Pacific region. The present volume seeks to fill this gap by offering synthesis papers stemming from the studies on international labour migration in twenty Asia-Pacific economies which were jointly undertaken by the Pacific Economic Cooperation Council (PECC) and the APEC Business Advisory Council (ABAC) in 2007-2008 under the theme of Demographic Change and International Labour Mobility in the Asia-Pacific Region: Implications for Business and Regional Economic Integration. The twenty case studies covered Japan, Republic of Korea, China, Hong Kong, China, Chinese Taipei, Mongolia, Thailand, Vietnam, Malaysia, Singapore, Indonesia, Philippines, Australia, New Zealand, Chile, Peru, Colombia, Mexico, United States, and Canada. These case studies were prepared by experts who were identified by the respective committees of PECC. These were presented in a joint PECC-ABAC conference held in Seoul, Korea, on March 25-26, 2008, which was organized by the Korea National Committee for Pacific Economic Cooperation (KOPEC). Senior officials of the International Labour Organization and the International Organization for Migration also attended this conference as did two participants from the business community. Five synthesis papers were prepared subsequently, for the four ‘sub-regions’ of Northeast Asia, Southeast Asia, Australasia, and Pacific Americas each, as well as for the Asia-Pacific region as a whole. The present volume consists of these synthesis papers as well as the executive summary for the Synthesis Report. The reports of the individual case studies on the twenty Asia-Pacific economies have been uploaded on the PECC website (www.pecc.org).

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Foreword

This project was launched at the initiative of Dr. Soogil Young, Chair of KOPEC, who proposed and has coordinated the project with generous financial and administrative support from KOPEC. Ms. Doris Magsaysay-Ho of ABAC Philippines has helped in securing the support of ABAC for the project as well as injecting ABAC’s perspectives into the project, and into the Synthesis Report and its executive summary, in particular, in order to ensure its relevance to the business community in the region. The region-wide synthesis paper, the most important output from the project, has been authored by Prof. Graeme Hugo. Prof. Hugo expresses his gratitude to the members of ABAC and PECC who have given support to the project, and especially, the members of the PECC-ABAC Joint Task Force who have commented on his work. Prof. Hugo has also done most of the arduous editing work for the present volume. We thank him for those contributions of critical importance to the successful conclusion of the project including the publication of this volume. We also thank all those who participated in the Seoul conference including the authors of the case studies, the members of the synthesis group, the guest participants from ILO, IOM, and the business community, for their respective contributions, as well as KOPEC and all other PECC member committees for their support for this project. It is our hope that the findings from the project that are reported and produced in this volume will help bring about a better appreciation of the many dimensions of international labour mobility in the Asia-Pacific and its valuable contribution to national and regional economic growth. Charles E. Morrison International Chair PECC Soogil Young Chair KOPEC Doris Magsaysay-Ho ABAC Philippines

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Preface

Preface This report presents the results of a project initiated by PECC-ABAC and proposed, financed and organized by the Korea National Committee for Pacific Economic Cooperation (KOPEC). The object of the project was to survey experiences of the economies in the APEC region in managing permanent and temporary international movement of labour with some focus on the problems and policy responses associated with temporary workers and further to examine the business implications, identify common challenges and possible cooperative responses to them. Each of these studies was asked to cover the following topics: • Assess the magnitudes, trends and patterns of labour migration in the AsiaPacific, focusing on temporary migration of labour. • Examine the demographic situation, policies and practices related to demographic change in each economy and their implications for business and labour mobility. • Assess the main impediments to the international movement of labour in each economy. • Analyze labour migration policies and practices. • Highlight key issues and concerns pertaining to labour migration and demographic change. • Compare labour migration experiences, policies and practices among economies. • Examine business implications. • Explore the scope for policy cooperation and labour migration. Accordingly papers were prepared on 20 economies in the APEC region and presented at a meeting organized by KOPEC in Seoul, South Korea on 25-26 March 2008. These papers and authors are as follows: Opening Session Prof. Graeme Hugo, Keynote Address – Demographic Change and Its Implications for Labour Mobility in Asia and the Pacific. • Mr. Manolo Abella, Keynote Address – Challenges to Governance of Labour Migration in Asia-Pacific. •

Northeast Asia Session Prof. Liu Yanbin – Demographic Change and International Labour Mobility Implications for Business and Social Development in China. • Prof. Wong Siu-lun, Dr. Markéta Moore and Prof. James Chin – Hong Kong: Demographic Change and International Labour Mobility. • Dr. Ke-Jeng Lan – The Management Mechanism of Hiring Foreign Professionals in Chinese Taipei. • Drs. Jai-Joon Hur and Kyuyong Lee – Demographic Change and International Labour Mobility in Korea. •

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Preface

•

•

Prof. Yasushi Iguchi – Declining Population, Structural Change in the Labour Market and Migration Policy in Japan. Dr. Bolormaa Tsogtsaikhan – Demographic Changes and Labour Migration in Mongolia.

Southeast Asia Session Prof. Tereso S. Tullao – Demographic Changes and International Labour Mobility in the Philippines: Implications for Business and Cooperation. • Drs. Aris Ananta and Evi Nurvidya Arifin – Demographic and Population Mobility Transitions in Indonesia. • Dr. Yongyuth Chalamwong – Demographic Change and International Labour Mobility in Thailand. • Mr. Phung Quang Huy – Exported Labour – Practice and Policy Issues: Vietnamese Case. • Ms. Vijayakumari Kanapathy – Managing Cross-Border Labour Mobility in Malaysia: Two Decades of Policy Experiments. • Profs. Chew Soon-Beng and Rosalind Chew – Coping with International Movement of Personnel: Its Impact on Low Wage Domestic Workers in Singapore. •

Australasia Session Prof. Graeme Hugo, Ms. Juthika Badkar and Dr. Paul Callister – International Labour Mobility in Australia and New Zealand.

•

Pacific America Session Drs. Susan Martin and B. Lindsay Lowell – International Labour Mobility in the United States. • Ms. Catherine Sas – Canada: Overview of Economic Immigration Program. • Dr. Ofelia Woo Morales – Mexico Case Study: Demographic Change and International Labour Mobility in the Asia-Pacific Region. • Dr. Claudia Martinez – Labour Mobility: The Case of Chile. • Dr. Anibal S nchez – Case Peru: Demographic Change and International Labour Mobility in the Asia-Pacific Region. • Mrs. Jaifa Mezher El Kareh and Nestor Ord z C rdenas – Colombia Case Study: Colombian Labour Migration. •

Business Perspectives Ms. Doris Magsaysay-Ho – Implications for Business and Cooperation in the Region. • Ms. Lori Forman – Labor Mobility in Asia-Pacific: Views of a Global Firm. •

Implications for International and APEC Cooperation Dr. Piyasiri Wickramasekara – Cooperation on International Migration and Labour Mobility: ILO Perspectives. • Mr. Federico Soda – Cooperation on International Migration. •

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Preface

The editors would like to thank all the authors for their informed and authoritative inputs at the conference, many of which have been incorporated in the present book. They would also like to express their appreciation to Ms. Joanna Rillo who expertly and efficiently prepared the camera-ready manuscript for the book and Ms. Maria Fugaro for preparing the index. In addition we would like to express our great appreciation to Ms. Shinhye Hwang of KOPEC and Ms. Janet Wall of the University of Adelaide for all the work they have put into bringing this book to fruition.

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Editors’ Preface

x

List of Tables

List of Tables Table 1.1. Table 1.2. Table 1.3. Table 1.4. Table 1.5. Table 1.6. Table 1.7. Table 1.8. Table 1.9. Table 1.10. Table 1.11. Table 1.12. Table 1.13. Table 1.14. Table 1.15. Table 1.16. Table 1.17.

Table 1.18.

Table 1.19. Table 1.20. Table 1.21. Table 1.22. Table 2.1.

APEC Economies Population Aged 15-24, 1960-2005 and Projected 2020 and 2040 ................................................................4 APEC Members: Projected Growth of the Population Aged 15-64, 2005-10, 2010-20, 2020-30 ................................................5 APEC Economies: Projected Growth of the Population Aged 15-34, 2005-10, 2010-20, 2020-30 ................................................6 Changing Proportion of Workforce Made Up of Foreign-Born – Selected Economies ........................................................................9 Australia, USA and Canada: Growth of the Asia-Pacific-Born Population, 1971 to 2006 (Thousands) ........................................10 Entries of Temporary Workers in Selected OECD Members by Principal Categories, 2004............................................................10 International and/or Foreign Students in Tertiary Education, 2000 and 2004...............................................................................11 Stocks of International Migrants in APEC Economies 2000 and 2005 (Thousands) ..................................................................13 Korea: Number of Foreign Visitors and Resident Foreigners, 1990-2006 .....................................................................................14 Asia: Estimates of Stocks of Migrant Workers in the World ..........15 Selected Asian Outmigration Economies: Proportion of International Labour Migrants Who are Women ........................16 Stock Estimate of Overseas Filipinos as of December 2007 ...........17 Philippines: Skill Categories of Newly Hired Overseas Contract Workers, 1998-2003 ......................................................18 Selected APEC Countries: Gross National Income Per Capita ($US), 2006...................................................................................20 Selected APEC Countries: Poverty...................................................21 Global Flows of International Migrant Remittances ($ Billion)......................................................................................29 Main Asian Labour Exporting Economies: Workers’ Remittances Relative to Exports and Imports in US$ Million, 1980-2006 .......................................................................32 Australia: Settler Arrivals and Permanent Departures (Australia- and Overseas-Born) to APEC Member Countries, 1993-94 to 2005-06.....................................................37 Views and Policies of Asia-Pacific Governments Regarding Immigration, 1976-2005...............................................................43 Views and Policies of Asia-Pacific Governments Regarding Emigration, 1976-2005.................................................................43 Summary of Asia-Pacific Government Policies Toward Labour Migration..........................................................................45 Alternative Regimes for Taxing Flows of Human Capital ..............51 Remittances, Percentage of GDP as of 2006....................................66

xiii

List of Tables

Table 2.2. Table 2.3.

Population, Population Growth, TFR and Ageing Indices ..............66 Remittances with Respect to Exports, Imports and GDP, as of 2006 (Unit: US$ million)..............................................................71 Table 2.4. Summary of Government Policies Towards Labour Migration ......74 Table 3.1. Population, Population Growth, TFR and Population Ageing Index..............................................................................................97 Table 3.2. Estimated Stocks of Migrant Workers from and to Southeast Asia..............................................................................................100 Table 3.3. Summary of Government Policies Toward ILM............................112 Table 4.1. Projections of Australia’s Aged and Working Age Population.....134 Table 4.2. Outcomes of Australia’s Humanitarian Program by Component and Category from 1997-98 to 2006-07.....................................142 Table 4.3. Australia: Occupation of Settler Arrivals 2006-07 and 1992-93 .......................................................................................145 Table 4.4. Australia: Settler Arrivals – Top 10 Source Countries of Birth ....150 Table 4.5. People Approved for Residence, Skilled/Business Stream 1997/98 to 2007/07 (Tope 10 Source Countries as at 06/07)....152 Table 4.6. People Approved for Residence, Family Sponsored Stream 1997/98 to 2006/07 (Top 10 Source Countries as at 07/06) .....152 Table 4.7. People Approved for Residence, International/Humanitarian Stream 1997/98 to 2006/07 in the Top 10 Countries in the 06/07 Financial Year...................................................................153 Table 4.8. Principal Applicants Granted Work Permits in the Top Twelve Countries Since 1999/00*...........................................................157 Table 4.9. Principal Applicants Granted Labour Market Tested Work Permits Since 1999/00*..............................................................158 Table 4.10. Principal Applicants Granted Student Permits Since 1999/06* ....159 Table 4.11. Australia: Visa Category of Permanent Additions, 2000-01 to 2006-07 .......................................................................................160 Table 5.1. Colombia: Remittances, 2000-2006 ...............................................184

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List of Figures

List of Figures Figure 1.1. Figure 1.2.

Figure 1.3. Figure 1.4. Figure 1.5. Figure 2.1. Figure 4.1. Figure 4.2. Figure 4.3. Figure 4.4. Figure 4.5. Figure 4.6. Figure 4.7. Figure 4.8. Figure 4.9. Figure 4.10. Figure 4.11. Figure 4.12. Figure 4.13. Figure 4.14.

Figure 4.15. Figure 4.16.

International Migration by Category of Entry, Selected OECD Countries, 2005, Standardized Data...............................................9 Changes in Status from Temporary Categories to Permanent Type Worker Migration, Selected OECD Members, 19962005...............................................................................................12 Remittances and Capital Flows to Developing Countries ...............30 Growth of Remittances to the Philippines, Thailand, Indonesia, Pakistan and Mexico, 1980-2007...............................31 A Continuum of Undocumented International Labour Migration in Asia ..........................................................................42 Population Pyramids of Six Northeast Asian Economies (Unit: thousand persons)...............................................................67 Permanent-Type Inflows, Standardised Statistics, 2005 (Number per thousand persons in the population).....................132 Australia: Total Population Growth Showing the Natural Increase and Net Migration Components, 1901-2007...............135 Australia: Settler Arrivals by Region of Last Residence, 1947 to 2006.........................................................................................136 Australia: Region of Birth of Humanitarian Settler Arrivals, 1996-97 to 2006-07.....................................................................143 Australia: Migration Program Outcomes by Stream, 1989-90 to 2006-07 ...................................................................................145 Australia: Family Stream Outcomes by Visa, 1982-83 to 2006-07 .......................................................................................146 Australia: Arrivals of New Zealand Citizens and New Zealand-Born Persons, 1981-82 to 2005-06..............................147 Australia: Asia-born Settler Arrivals by Region, 1994-95 to 2006-07 .......................................................................................149 Australia: Sex Ratios of Settler Arrivals, 1959-2007.....................151 Migrant Flows into New Zealand Through the Three Residence Streams, 1997/98 to 2006/07 – Approvals...............151 Temporary Migration to Australia by Category, 1986 to 2007.............................................................................................155 Overseas Students in Australian Universities, 1983 to 2006.........156 Australia: Onshore Residence Visa Grants, 1989-90 to 2005-06 .......................................................................................160 Australia: Number of Skilled Stream Outcome Principles with Points for Australian Qualification by Citizenship, 2004-05 .......................................................................................162 Permanent and Long Term Departures of Residents from Australia, 1959-60 to 2006-07....................................................163 Australia: Total Permanent Departures, 1993 to 2006...................164

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List of Figures

Figure 5.1. Figure 5.2. Figure 5.3. Figure 5.4. Figure 5.5. Figure 5.6. Figure 5.7. Figure 5.8. Figure 5.9.

Population Pyramids for the Pacific Americas, 2005, 2020 and 2040.............................................................................................173 Evolution of the Dependency Ratio in the Pacific Americas ........174 Origin of Foreign Born Population in the United States................176 Canada: Foreign-Born Population, 1930-2001 ..............................176 Origin of Immigration to Canada, 1991-2001 (in percent)............177 Chileans Abroad, 2003-2004 (in percent) ......................................179 Colombians Abroad, 2005 (in percent) ..........................................179 Peruvians Abroad, 2006 (in percent) ..............................................180 Summary of Government Policies Towards Migration in the Americas .....................................................................................190

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List of Acronyms

List of Acronyms 3D ABAC ABS ABTC ACMECS AFAS APEC ASEAN BOI CEPA CIES CSSs DANE DIAC DIMA DIMIA DFID DPs EFTA EP EPA EU FDA FDI FTA GATS GATT GCIM GDP GMS GNI GNP HSIP IGSC ILM ILO IOM IT KIEP KOPEC MICs MNCs

Dirty, Dangerous and Difficult APEC Business Advisory Council Australian Bureau of Statistics APEC Business Travel Card Aerawadee Chaopraya Mekong Economic Cooperation Strategies ASEAN Framework Agreement on Services Asia-Pacific Economic Cooperation Association of Southeast Asian Nations Board of Investment Closer Economic Partnership Arrangement Capital Investment Entrant Scheme contractual service suppliers Departamento Administrativo Nacional de Estadistica Department of Immigration and Citizenship Department of Immigration and Multicultural Affairs Department of Immigration and Multicultural and Indigenous Affairs Department for International Development Displaced Persons European Free Trade Association Employment Pass Economic Partnership Agreement European Union Foreign Development Assistance Foreign Direct Investment Free Trade Agreement General Agreement on Trade in Services General Agreement on Tariffs and Trade Global Commission on International Migration Gross Domestic Product Greater Mekong Sub-Region Gross National Income Gross National Product Hinschu Science-Based Industrial Park Interim General Skills Category International labour migration International Labour Organisation International Organisation for Migration Information Technology Korea Institute for International Economic Policy Korea National Committee for Pacific Economic Cooperation Middle Income Countries Multinational Corporations

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List of Acronyms

MRAs MWP NAFTA NGOs NIEs NYC NZIP OAS OCWs ODA OECD OFWs OSU OWWA PECC PEP POEA PRs PVP RSE RTAs SMC SMEs SSRM TFR UN USD USSFTA WHM WTO

Mutual Recognition Arrangements Miscellaneous Work Permit North American Free Trade Agreement Non Government Organisations Newly Industrialising Economies National Youth Commission New Zealand Immigration Programme Organization of American States Overseas Contract Workers Official Development Assistance Organisation for Economic Cooperation and Development Overseas Filipino Workers Overseas Singaporean Unit Overseas Workers Welfare Administrations Pacific Economic Cooperation Council Personalised Employment Pass Philippine Overseas Employment Administration permanent residents Professional Visit Pass Recognised Seasonal Employer scheme regional trade arrangements Skilled Migrant Category small and medium enterprises State Specific and Regional Migration total fertility rate United Nations United States Dollars US-Singapore FTA Working Holiday Maker World Trade Organisation

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Executive Summary

Executive Summary One of the most remarkable and beneficial aspects of Asia-Pacific integration in the past half century has been the growing and massive international movement of people on a temporary and permanent basis. Such movements typically have brought tremendous economic benefit to the region. Through people movements, net destination economies compensate for labour and skill shortages, and may deter industries from moving off-shore to more labour-rich locations. Investment would increase as a result. For net origin economies, individuals are provided with opportunities and income, remittance flows become an enormous source of foreign exchange earnings, and student and trainee movements have facilitated the acquisition of skills. Both net origin and destination economies benefit from circular migration flows involving the acquisition of skills and knowledge in the early career in a foreign economy and its transfer and use in the native economy later in the career. These labour flows enhance regional economic integration. Private industries also benefit enormously from both highly skilled and lesser skilled flows by being able to maximize productivity through deploying human resources where they are most effective – whether they are highly or lesser skilled workers. At present there is a critical shortage of both skilled and unskilled workers in many APEC economies, and businesses are finding it increasingly difficult not only to find workers but also to deploy talent when and where it is most effective. Economic analysis tells us that in aggregate the benefits of enhanced labour mobility far outweigh adjustment costs and are an essential and crucial element in the Asia-Pacific growth story. This will continue to be so. Demographic transformations, widening differences in levels of economic and educational development, and continued regionalization and globalization of industry, all suggest that Asia-Pacific economies will almost certainly require even greater international movements of labour in the future. However, in a time of both increased security concerns and economic insecurities, there is a tendency to politicize and restrict border flows, causing tensions and policy incoherence in the region. This will not only be harmful to national economies, but also increase surreptitious and exploitative illegal labour flows. It is the right of every government to regulate immigration policies. However, smart regulatory policies should be based on a sound understanding of the economic impact of labour flows and knowledge of the human dimensions of migrant flows. They will also be enhanced by an understanding of best and poor practices that have worked or failed for other economies. In our view, there is a compelling need for regional cooperation as a vehicle through which both origin and destination economies can maximize economic benefit, smooth economic and social adjustments for native citizens and immigrants, share policy experiences, and improve the protection and well-being of migrant communities.

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Executive Summary

Based on an extensive survey of Asia-Pacific labour migration practices and policies, our cooperative PECC-ABAC study team makes the following general recommendations: • As a basis for smart policy, APEC economies need to have a fuller understanding of labour migration and its importance to national economies and regional integration. While some economies do have significant statistical and analytical capabilities, they are mostly devoted to national level issues. The regional flows, benefits, and adjustment challenges are much less understood. We urge the APEC economies to strengthen national and regional data collection and policy analysis of migration flows. • Governmental capabilities to manage migration flows and to coordinate policies across different agencies and communicate them to their employees and migrants are frequently deficient. We recommend a regional survey of these capabilities in order to identify needed reforms and skills training programs, and sources of assistance to address these needs. Good governance in migration management is a key for protection of migrants and making international labour flows a win-win for the worker as well as both origin and destination economies. In some cases, wider labour market reforms and stronger labour institutions may be needed. We urge APEC to build capacity in migration management across the region. • Best practices and policies on international migration should be studied and shared. The APEC region encompasses a wide variety of labour circumstances, practices, and legal and policy regimes, and each economy clearly needs policies addressed to its individual needs and situation. However, there is also much to share regarding practices and policies that can enhance remittance flows, strengthen circular migration patterns, reduce transaction costs for the migrants, provide legal protection for migrants, facilitate good social relations between migrant and established communities and mainstream migrants in national life, incorporate labour migration issues in trade and other bilateral agreements, technology transfer and training of workers, develop pension portability, and other issues. Regional institutions are often a more effective forum for knowledge sharing than global institutions, and APEC is a logical venue because of its focus on aspects of regional economic integration. • We urge APEC to undertake a concerted effort to identify illegal and exploitative practices associated with the migration industry that are oftentimes the cause of illegal migration. These include egregious cases of human trafficking, forms of indentured servitude, passport and visa fraud, transportation that is risky, illegal payments, the practice of workers paying placement fees, and excessive over-charging for handling remittances and other normal and legal transactions. • The APEC economies should develop processes for enhanced consultation on frameworks and policies affecting labour migration with the International Labour Organization, the Organization for International Migration, and other relevant international organizations.

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Executive Summary

Public-private partnerships and private sector programs can often be tools to strengthen support and provide protection for migrant communities. Our case studies suggest valuable lessons from the international shipping industry and private sector projects to enhance electronic social networks among migrant communities and with family and friends in home economies. We urge APEC to undertake a full canvassing of the business community in order to allow for a wider range of suggestions and ideas to facilitate beneficial and equitable labour movements. In sum, the PECC-ABAC International Labour Mobility Task Force believes that APEC can develop an action-oriented set of activities around the issue of international labour mobility that will significantly enhance the benefits to APEC economies, ease adjustment problems associated with migration, strengthen the transfer of human skills through migration, overcome increasing demographic and labour imbalances, and provide protection and enhanced wellbeing for those who migrate. In November 2007 APEC Leaders agreed to promote further economic integration in the Asia-Pacific region. Considerable progress has been made in liberalizing trade and financial flows; however progress in labour mobility has been limited. An initiative in the area of labour mobility would be consistent with the goals of APEC and could serve to facilitate business operations and greatly enhance the regional integration process. We hope that APEC will adopt as part of its next work cycle an International Labour Mobility project with a midterm vision and specific action goals. ABAC and PECC are willing to join APEC in this program by sharing the knowledge, analyses, and conclusions that we have developed with government officials. The individual economy case studies have been uploaded on the PECC website (http://www.pecc.org).

•

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

Chapter 1 Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis Graeme Hugo

Introduction Over the last two decades there has been a massive increase in the flows of goods, finance and information between APEC nations and although movements of people have also increased there remain substantial barriers. Some in the region argue that it is paradoxical that whereas a freeing up of regulations has facilitated flows of capital and goods between economies there has not been a similar liberalization of the other factor of production-labour. Undoubtedly increasing migration between economies has contributed to Asia-Pacific integration and had benefits for origins, destinations and the migrants themselves. Yet there remains widespread misunderstanding of international labour migration in the region and its impacts, both current and potential. However migration in this region, as is the case elsewhere in the world, remains a highly sensitive issue and the movement of workers in the region, especially the low skilled, remains highly restricted. It must be the sovereign right of every nation to regulate immigration but too often restrictive migration policy is not based on empirical evidence but on misinformation and the pressures of interest groups. In such contexts undocumented migration and exploitation of and discrimination against migrants thrives. There is, however, an increasing awareness in the region of the complex relationship between labour movement on the one hand and economic and social development on the other. This awareness has been sharpened by the steepening of the demographic and economic gradients between countries which has seen labour shortage-surplus differences, widen. Moreover, while there is an appreciation that ‘brain drain’ losses of human capital caused by emigration of skilled people can impinge negatively on low income countries, there is increasing evidence that in some countries migration can and does have positive impacts on origin areas. As the former Secretary General of the United Nations put it: ‘The potential for migrants to help transform their native countries has captured the imaginations of national and local authorities, international

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Graeme Hugo

institutions and the private sector. There is an emerging consensus that countries can co-operate to create triple wins, for migrants, for their countries of origin and for the societies that receive them’ (United Nations 2006a, 5). Any discussion of this kind is beset with a number of difficulties. Firstly, the vast size and cultural, ethnic, political, religious and economic complexity of the Asia-Pacific region makes it difficult to generalize. Countries in the region range from Brunei Darussalam (390,000 persons) to China (1.3 billion) and Indonesia (231 million). It has some of the world’s poorest economies such as Papua New Guinea (GNI PPP per Capita US$2,410) as well as wealthy economies such as Japan and Hong Kong, China (US$38,200). Inevitably, in this paper, there will be generalization across the region but it must be borne in mind that there is huge variation between and within economies which influences international migration. Secondly, it should be pointed out that the exponential increase in significance of international migration in the Asia-Pacific has not been accompanied by a concomitant increase in the amount and quality of data collection regarding it. This is a major constraint upon the research effort in this area and needs to be systematically addressed. Measuring migration is especially problematic because of the widespread occurrence of undocumented migration. Stock migration data is usually obtained from censuses but among the enumerations of only a minority of economies have a full range of the basic questions of relevance to migration. Moreover, temporary migrants are rarely detected in censuses (Hugo 2006a). A similar situation prevails with respect to migration flow data collected at borders. While all economies have border systems, data on arrivals and departures are often not maintained in a way that makes them amenable to analysis, especially departures. The data sometimes exclude movement of citizens and often do not differentiate between short term, long term and permanent movement. Accordingly, any assessment of international migration in the region is limited by the lack of comprehensive and accurate data sources. The improvement of collection of both stock and flow data in the region is a priority. Following the heightened security awareness following the September 11th events, there is a great deal of rhetoric in the region, as elsewhere, on the necessity for improving management of migration. However, managing migration effectively is dependent, among other things, on the availability of comprehensive timely and accurate data relating to the scale and composition of that migration. Moreover if the potential of migration to enhance economic and social development and reduce poverty in the region is to be harnessed there is a pressing need to improve data collection on it. This chapter seeks to outline recent developments in international migration of labour in the APEC region. It begins by outlining the changing demographic situation in the region and how this is increasing differentials driving migration between economies. It then outlines the changing patterns of labour migration in the region before examining the main drivers of the movement. The relationship between labour migration and development is then discussed before examining some of the emerging issues relating to migration in the region. The

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

focus then moves to a discussion of the major policies relating to labour migration in the APEC region and the extent of cooperation between economies on the migration issue. Finally, a number of recommendations are made with respect to labour migration and development in the APEC region.

The Demographic Context The Global Commission on International Migration (2005, 12) concluded that: ‘In the contemporary world, the principal forces that are driving international migration are due to the ‘3Ds’: differences in development, demography and democracy … because the differentials are widening, the number of people seeking to migrate will continue to increase in the future’. The salience of widening global demographic differentials in increasing international population movement has also been identified by the World Bank (2006a, 29) as: ‘A key driver in the demand for international migration over the next 20 years will be the slowing down, and then the decline of the labour force in high income countries. The age group that supplies the bulk of the labour force (15-65 years old) is expected to peak near 500 million in 2010 and then fall to around 474 million by 2025’. Accordingly in addressing contemporary and likely future scenarios for labour mobility for APEC economies it is important to consider the role of demographic change in the region. The Asia-Pacific contains both high income and low income economies and their demographic trajectories have differed. On the one hand the high income economies are experiencing low (and, in a few cases, negative) natural increase of population because of an extended period of low fertility. This is resulting in slow natural growth and projected declines of their workforce age population as aging becomes more pronounced. On the other hand in low income economies of the region, fertility decline has been more recent although in most countries it has also been dramatic. Indeed in the Asia-Pacific the Total Fertility Rate fell from 5.4 children per woman in 1970 to 2.3 in 2007 over the same period. The average life expectancy has increased by around 15 years. These shifts have wrought significant changes in age structure. Table 1.1 depicts the changes in the 15-24 age group, which have occurred in the region, and are anticipated to occur, between 1960 and 2040. This depicts the passage of what has been called the ‘Asian Youth Bulge’ (Fuller and Hoch 1998; Westley and Choe 2002). As Westley and Choe (2002, 57) point out, the ‘youth bulge’ … ‘is the result of a transition from high to low fertility about 15 years earlier. The youth bulge consists of large numbers of adolescents and young adults who were born when fertility was high followed by declining numbers of children born after fertility declined’. Table 1.1 indicates that in 1960, the APEC economies youth population numbered 232 million and comprised 15 percent of the total population. However, over the next two decades they grew very rapidly and by 1985 they had almost doubled in number and reached a peak of 19 percent of the total population. Subsequently, there 1

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has been a decline as the effects of the decline in fertility have been felt. Hence, in 2005 the APEC economies youth population had reached 439 million but their proportion of the population declined to 15 percent. The outlook for the future is for the youth population to decrease slowly to 368 million in 2040 when they would make up 11 percent of the total population. This of course has implications for migration since the youth age groups are the most mobile. Table 1.1. APEC Economies Population Aged 15-24, 1960-2005 and Projected 2020 and 2040 Population Aged 15-24 Number (‘000) Percent 223,126 14.92 381,679 17.79 428,944 18.70 454,153 18.35 439,085 15.42 388,660 12.50 368,447 11.39

Year 1960 1980 1985 1990 2005 2020 2040

Annual Percentage Growth Per Annum 2.72 2.36 1.15 -0.22 -0.81 -0.27

Note: Chinese Taipei excluded 1960 to 1985. Source of data for Chinese Taipei is US Census Bureau International Data Base. Source of other data is United Nations World Population Prospects: The 2006 Revision Population Database. Source: United Nations World Population Prospects: The 2006 Revision Population Database and US Census Bureau, International Database

Also, from the perspective of migration while the growth and young adult population of Asia will continue to grow over the next two decades, in most OECD nations their numbers will decline. In Europe the numbers aged 15-24 have already begun to decline. It is important to point out however that while overall the Asian youth population is still increasing there are huge differentials between economies in this respect. A similar situation applies in Latin America – more than half the population in Colombia, Mexico and Peru, for example, are aged less than 15. Table 1.2 shows how there are vast differences between the APEC economies in the contemporary and impending growth (or decline) in their populations in the workforce ages 15-64 years. Clearly there are several nations which are likely to experience decline or slow growth in their workforce age populations over the next quarter century while there are others which will continue to experience significant growth. During 2005-10 only Japan and Russia will experience a decline in their workforce age population but by the 2020s it will be joined by several other countries. These include the world’s largest country of China which will experience an annual decline of 0.61 percent in its workforce age groups during the 2020s. This differs from the other demographic giant of Indonesia which will experience an annual increase of 0.61 percent. Increases of greater than 1 percent per annum are anticipated in 1

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

Malaysia, Peru, Philippines, Brunei and Papua New Guinea. The lowest growth or decline is generally in Eastern Asia. The situation of China is especially interesting given that it has become a major source of immigrants for OECD countries. Its workforce age population will increase from 822 million in 1995 and 934 million in 2005 to 992 in 2020 and then decline to 966 million in 2030. Table 1.2. APEC Members: Projected Growth of the Population Aged 15-64, 2005-10, 2010-20, 2020-30 2005-2010 Economy Declining

Growth 0-0.99%pa

Growth 1.00-1.99%pa

Growth 2.00-2.99%pa

Japan Russia

2010-2020 % Growth pa -0.70 -0.14

Chinese Taipei New Zealand China Thailand

0.73 0.75 0.85 0.93 0.96

United States Canada Australia Hong Kong, China Indonesia Chile Mexico Singapore Peru Viet Nam Philippines Malaysia Brunei Papua New Guinea

1.00 1.01 1.12 1.24 1.45 1.45 1.84 1.84 2.04 2.27 2.36 2.41 2.65 2.91

Economy Russia Japan Chinese Taipei

China Singapore Hong Kong, China Canada New Zealand Thailand United States Australia

2020-2030 % Growth pa -1.04 -0.90 -0.08

Chile Indonesia Viet Nam Mexico Peru Malaysia Philippines Brunei

0.14 0.20 0.29 0.29 0.31 0.47 0.47 0.52 0.63 0.73 1.17 1.30 1.31 1.59 1.66 1.86 1.89

Papua New Guinea

2.42

New Zealand Thailand Chile United States Australia Mexico Indonesia Viet Nam

% Growth pa -1.09 -1.08 -0.98 -0.61 -0.59 -0.49 -0.14 -0.10 -0.10 -0.01 0.11 0.28 0.30 0.60 0.61 0.69

Malaysia Peru Philippines Brunei Papua New Guinea

1.00 1.10 1.25 1.34 1.65

Economy Singapore Chinese Taipei Russia China Japan Hong Kong, China Canada

Source: United Nations 2005 and US Census Bureau, International Data Base

While it is important to examine the whole workforce age group it is important to bear in mind that international migration is strongly concentrated in the young adult age groups of 15 to 34 years and these are shown in Table 1.3. The pattern shown in the table is similar to that for the total workforce age group although the differences between countries are more striking and the growth rates over the next two decades will be significantly lower than for the workforce ages as a whole. By the 2020s only Peru, Philippines, United States, Malaysia, Brunei and Papua New Guinea will be experiencing growth in people aged 15-34. 1

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Table 1.3. APEC Economies: Projected Growth of the Population Aged 15-34, 2005-10, 2010-20, 2020-30 Source: United Nations 2005 and US Census Bureau, International Data Base 2005-2010 Economy Declining

Growth 0-0.99%pa

Growth 1.00-1.99%pa

Growth 2.00-2.99%pa

Japan Russia Republic of Korea China Hong Kong, China Chinese Taipei

2010-2020 % Growth pa -2.45 -1.23 -1.18 -0.95 -0.57 -0.49

Thailand Indonesia Mexico Australia New Zealand Canada Chile

0.05 0.32 0.39 0.72 0.75 0.82 0.93

United States Singapore Viet Nam Peru Philippines Brunei Malaysia Papua New Guinea

1.06 1.33 1.35 1.36 1.84 1.91 2.00 2.56

Economy Russia Chinese Taipei Republic of Korea Japan Hong Kong, China China Thailand Viet Nam Indonesia Canada

2020-2030 % Growth pa -2.49 -1.85 -1.58 -1.49 -1.03 -0.79 -0.48 -0.13 -0.06 -0.03

Chile Mexico Australia

0.14 0.15 0.22

Singapore New Zealand United States Peru Philippines Malaysia Brunei

0.41 0.46 0.60 0.72 1.09 1.10 1.10

Papua New Guinea

2.14

Chinese Taipei Singapore Republic of Korea Russia

% Growth pa -2.19 -2.07 -2.03 -1.42

China Chile Viet Nam Mexico Japan New Zealand Thailand Canada Hong Kong, China Indonesia Australia Peru Philippines United States Malaysia Brunei Papua New Guinea

-0.95 -0.81 -0.78 -0.61 -0.55 -0.54 -0.51 -0.49 -0.42 -0.11 -0.11 0.20 0.20 0.24 0.27 0.56 0.73

Economy

While there is considerable variation between economies in the region many are currently experiencing a demographic dividend whereby there is the opportunity to increase economic growth. This is because rapid and sustained declines in fertility has meant that the last large high fertility cohorts are entering the workforce ages while there are decreasing numbers of dependent children and there are still small numbers of dependent elderly aged persons. This has meant the ratio of working age to non-working age population has reached a peak. While this does not automatically confer a dividend of enhanced economic growth if there is an unfavourable policy environment there are several empirical studies of Asian countries which have confirmed that a dividend has resulted. For example, it has been shown that a high ratio of workers to dependents in China has contributed between 15 and 20 percent of economic growth during the reform era (Wang and Mason 2007). It is not, however, just that the passage of the ‘Asia-Pacific youth bulge’ into the early workforce ages has created a highly favourable dependency ratio. Almost all Asia-Pacific youth have experienced some formal education and are easily the best educated ever generation of young people in the region. While post school formal education has remained the prerogative of a privileged elite in many economies, there has been a spectacular increase in the

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

intergenerational differences in educational attainment. This has meant that there are not only more workers for each dependent than in past generations but also that their per capita productivity is considerably greater. The important point here, however, is that the same process which concentrates population in the ages which delivers a demographic dividend – the 20’s and 30’s – has important implications for migration. This is because one of the most universal of findings in migration research is that peak mobility is concentrated in the 20’s and 30’s age groups. The rapid growth of the 20’s and 30’s age groups in the region has coincided with unprecedented opportunities for international migration. This raises the issue as to what are the demographic dividend implications if a substantial number of the Asia-Pacific youth bulge do not remain in their own economy. There are a number of potential impacts: • Other things being equal it would seem that emigration of young workers would dampen the magnitude of the demographic dividend. This would occur not only because it would decrease the number of workers for each dependent but also because migration is selective of the more productive young workers. • On the other hand the economies with net gains of immigrants will benefit as the demographic dividend passes from the origin to the destination economy and the ratio of workers to dependents would improve. • However the increasing literature on migration and development (Lucas 2005; World Bank 2006a) suggests that in many cases the emigration of workers does not necessarily mean that their contribution to their source economy is lost. This is because: • they send back remittances; • they encourage foreign direct investment; • they send back knowledge, information and new ways of doing things; • they return permanently, temporarily and virtually. The literature suggests that the extent to which Asia-Pacific economies can benefit from their demographic dividends is dependent on them putting in place a favourable macro-economic policy environment (Bloom, Canning and Sevilla 2003, 42). One of these policy elements which has gained little attention in the past however relates to migration. There is a real chance that for many poorer economies a significant part of their demographic dividend may accrue to more developed economies which are able to attract away young and skilled workers. Clearly coming up with an appropriate mix of macro-economic, human resource, social and migration policies is crucial to maximizing the efforts of the demographic dividend.

Changing Patterns of Labour Migration in the Asia-Pacific Introduction The economies of the Asia-Pacific have had a varied experience with international labour mobility. All economies have recorded significant levels of both in- and outmigration. Among the economies selected for close study, however, it is possible to divide them into net labour recipients and those which

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send out more workers than they receive. The net recipients include four economies which have long histories of immigration – United States, Canada, Australia and New Zealand. There are also some which have become immigrant receiver economies more recently – Hong Kong, China, Japan, Korea, Singapore, and Chinese Taipei. In addition in Thailand and Malaysia there are both significant outflows and inflows. The other economies remain significant exporters of labour – Mongolia, the Philippines, Indonesia, Vietnam, China, Mexico, Chile, Peru and Colombia. At the outset there are a number of generalizations which tend to apply to most of the economies which were studied: • In all economies there has been a significant upward trend in internal labour mobility although the relative significance of the flows varies. The region, for example, includes two of the world’s major emigrant economies– Mexico and the Philippines – and also some of the major immigrant countries – United States, Canada, Australia and Singapore. In others migrants make up a smaller (but growing) proportion of workers. • Labour mobility data varies greatly in quality between the economies both in terms of its coverage of all forms of labour mobility but also in its accuracy. • Labour mobility is increasing in complexity in that there are a greater variety of types of movement – permanent and temporary, documented and undocumented, high skilled and low skilled etc. Moreover there are strong linkages between different types of mobility. • There is an increasing involvement of women in migration such that they are dominant in several flows. • There is a general increased scale and significance of the ‘migration industry’, increasing number of agents, travel providers, government officials and middlemen of various types which serve to both facilitate and encourage migration. • There is increasing involvement of government in both immigration and emigration.

Traditional Migration Economies Taking first of all the four traditional immigration economies it is apparent that there has been an increase in permanent migration – much of it focused on workers. As a result the proportion of the workforce in these economies that are made up of migrants has increased as is evident in Table 1.4. However, the mix of permanent migrants accepted by the four economies has changed significantly. There are three main flows of permanent migrants into the economies (workers and their families, family reunion migrants and refugees). Figure 1.1 shows that the economies vary in the proportion of their migrants made up of workers and their families with New Zealand and Australia having high proportions and the United States the lowest. There has been a tendency (especially in Australia and New Zealand) for worker migration to become more proportionally significant in immigration intakes over time. The permanent inflows are also changing in their composition with the Asia-Pacific becoming a 1

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

more important origin for all economies and South America becoming more significant in the North American economies. The rapid growth of Asia as an origin of immigrants is evident in Table 1.5. Undocumented migration is of particular significance in the United States where one estimate is that by 2004 that unauthorized workers numbered 6.3 million or 4.3 percent of the US labour force and 30 percent of all foreign workers (Martin and Lowell 2008). Another trend in immigration policy in the traditional migration economies has been an increasing focus on skill in selection of worker migrants making it more difficult for low skilled migrants to move to those economies. 1

Table 1.4. Changing Proportion of Workforce Made Up of Foreign-Born – Selected Economies Economy United States Australia Canada New Zealand Singapore * 1980

1970(c) 5.3 27.3

2006(c) 15.0 25.6 21.2 26.1 33.3

22.0*

Source: Martin and Lowell 2008; Friend 2008; ABS Australian Labour Force Surveys; New Zealand 2006 Census; Stahl 1984; Agence France-Presse, 31 January 2008

Figure 1.1. International Migration by Category of Entry, Selected OECD Countries, 2005, Standardized Data United Kingdom Switzerland Denmark Portugal Belgium Italy Australia Germany Austria New Zealand Norway Sweden Japan Netherlands Canada France United States 0

20

40

60

80

100

PERCENT Work

Accompanying family of workers

Family

Source: OECD 2007, 37

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Table 1.5. Australia, USA and Canada: Growth of the Asia-Pacific-Born Population, 1971 to 2006 (Thousands)

1971 1971-1981 % p.a. increase 1981 1981-1991 % p.a. increase 1991 1991-2001 % p.a. increase 2001 2001-2006 % p.a. increase 2006

Australia Asia-born Pacific-born* 167.2 97.2 8.3 8.2 371.6 212.8 8.3 5.1 822.2 349.8 1.8 2.7 982.5 455.3 4.2 1.7 1,208.7 496.4

USA Canada Asia-born Pacific-born Asia-born Pacific-born 824.9 41.3 131.8 11.9 6.5 15.2 39.8 77.6 541.2 7.0 3.0 7.0 4,979.0 104.1 1,064.8 41.7 4.8 5.6 5.8 2.3 7,970.0 179.0 1,878.0 52.2 2.4 -2.8 4.3 2.1 8,590.0 155.0 2316.6 57.8

* Excludes Australia-born

Source: OECD 1995, ABS 1971, 1991, 2001 and 2006 Censuses; US Bureau of the Census 2001 and 2006 Current Population Survey; Statistics Canada, Census of 1971; 1991, 2001 and 2006; Gibson and Lennon 1999

Table 1.6. Entries of Temporary Workers in Selected OECD Members by Principal Categories, 2004 Thousands Trainees Australia Austria Belgium Canada Denmark France Germany Italy Japan Korea Netherlands New Zealand Norway Sweden Switzerland United Kingdom United States

7.0 0.8 1.5 0.5 2.3 75.4 46.7 2.4 0.5 0.4 1.4

Working Holiday Makers 93.8 0.3 21.4 62.4 -

Seasonal Workers 15.7 1.0 19.0 15.7 324.0 77.0 25.4 4.9 19.8 31.8

IntraCompany Transfers 0.2 4.2 2.3 3.6 8.5 7.5 62.7

Other Temporary Workers 58.6 9.8 0.5 55.8 3.4 10.0 34.2 146.6 8.3 44.1 43.7 2.1 3.4 113.4 221.8

Note: The definition of temporary workers varies from one country to another. Only the principal categories of temporary workers are presented in this table. Data on temporary workers generally do not cover workers who benefit from a free circulation agreement. Source: OECD 2007, 52

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

A defining feature of worker migration to the traditional immigration nations has been the increasing significance of temporary migration. Table 1.6 shows the trends in recent years. This inflow has greatly enhanced the migrant contribution to the labour force in traditional migration economies. Moreover the temporary worker schemes are highly focused on skill. There are only minor examples where they involve low skilled groups as is discussed later. A particularly significant group in the temporary immigrants are foreign students as is indicated in Table 1.7. The numbers of students moving to these economies, especially from Asia, has increased exponentially in recent years. 1

1

Table 1.7. International and/or Foreign Students in Tertiary Education, 2000 and 2004

New Zealand Australia1 Switzerland3 United Kingdom1 Austria1 Germany France Canada1,2 Belgium1 Sweden1 Denmark1 Czech Republic Norway1 Portugal Netherlands3 United States1 Iceland Hungary1 Japan1 Finland3 Greece Spain1 Italy Slovak Republic Turkey Poland Korea Icealand3 OECD

International Students as a Percentage of Tertiary Enrolment in 2004 Advanced Total Research Tertiary Programs na na 16.6 17.8 12.7 42.5 13.4 38.6 11.3 16.8 na na na na 8.8 23.3 6.0 20.0 4.0 4.5 4.6 7.0 na na 1.7 3.5 na na 4.8 na 3.4 na na na 2.8 6.9 2.7 na 3.4 7.0 na na 0.8 5.5 na na na na na na na na na na 6.7 na 6.5 16.1

Foreign Students as a Percentage of Tertiary Enrolment in 2004 Advanced Total Research Tertiary Programs 28.3 36.6 19.9 26.4 18.2 42.4 16.2 40.3 14.1 21.3 11.2 na 11.0 33.9 10.6 34.1 9.6 31.3 8.5 19.9 7.9 20.4 4.7 7.1 4.5 18.2 4.1 7.8 3.9 na 3.4 na 3.3 13.7 3.1 7.4 2.9 na 2.6 7.0 2.4 na 2.3 17.5 2.0 3.6 1.0 1.2 0.8 na 0.4 na 0.3 na na na 7.3 19.5

Index of Change in the Number of Foreign Students, Total Tertiary (2000=100) 456 158 137 135 111 139 173 116 114 143 133 262 142 145 152 120 121 130 177 142 167 164 163 104 87 133 320 171 141

Number of Foreign Students 2004 68 900 167 000 35 700 300 100 33 700 260 300 237 600 133 000 44 300 36 500 17 200 14 900 12 400 16 200 21 300 572 500 500 12 900 117 900 7 900 14 400 41 700 40 600 1 600 15 300 8 100 10 800 12 700 2 255 900

na means not available. 1 International students for these countries are students with a permanent residence in another country. 2 Year of reference 2002. 3 International students for these countries are students whose prior education was obtained in another country.

Source: OECD 2007, 53

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Moreover a high proportion of these foreign students, indeed of all temporary migrants, are making the transition to become permanent residents of the destination economies as is evident in Figure 1.2. This strong nexus between student and skilled temporary migration on the one hand and permanent settlement on the other is an increasingly significant feature of the immigration landscape in the traditional migration economies. 1

Figure 1.2. Changes in Status from Temporary Categories to Permanent Type Worker Migration, Selected OECD Members, 1996-2005

PERCENTAGE

100 90 80 70 60 50 40 30 20 10 0

USA NZ

AUST JAPAN UK

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Source: OECD 2007, 59

New Net Immigration Nations Turning to the other net immigration economies of the study, all have a much shorter history of net labour migration gains than the traditional migration economies. There are broadly two systems of labour migration which are influencing these economies. The smaller system involves highly skilled workers and this is increasing with the internationalization of labour markets. For example, in 2006 the official number of skilled overseas workers in the city of Shanghai in China was 119,876 (Bureau of Exit-Entry Administration, Shanghai Municipal Public Secretary Bureau). Economies generally have become more welcoming to skilled migrants as it is realized that skilled workers are crucial to increasing productivity and lack of such workers can be a substantial constraint on development. In particular Singapore, Korea and Hong Kong-China have become proactive in attracting skilled workers. Most skilled workers enter Asian immigration economies as temporary migrants although permanent settlement is increasing. The largest system of labour migration influencing Asian immigration economies involves low skill workers who are employed in low status, low paid jobs which have been characterized as 3D (Dirty, Dangerous and Difficult). The demand for workers in these areas is fuelled by the demographic forces mentioned earlier but also the fact that in tight employment-rapid economic growth contexts these jobs are being eschewed by local workers. Accurate

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

estimation of the scale of these flows, both skilled and unskilled, is not possible. There are a number of reasons for this: • A high incidence of irregular migration both as a result of clandestine migration as well as people entering an economy legally but without permission to work. • Systematic exclusion of some international labour migration from data collection systems as in the case of high skill workers in India. • Lack of comprehensive and efficient data collection systems. • A neglect of temporary migration in data collection systems which focus on permanent migration. • A focus in data collection systems on foreigners with data on locals not being collected or processed. • Some destination economies do not divulge data on international migration because they not wish the precise degree of dependence on foreign workers to be widely known. As a result there are divergent estimates available for international labour migrants for many economies. Table 1.8. Stocks of International Migrants in APEC Economies 2000 and 2005 (Thousands) Region/Country China China Hong Kong Japan South Korea Brunei Indonesia Malaysia Philippines Singapore Thailand Vietnam Russian Federation USA Canada Mexico Peru Chile Australia New Zealand Papua New Guinea

2000

2005

513 2,701 1,620 597 104 397 1,392 160 1,352 353 22 13,259 34,988 5,826 521 46 153 4,705 850 23

596 2,999 2,048 551 124 160 1,639 374 1,843 1,050 21 12,080 38,355 6,106 644 42 231 4,097 642 25

Source: United Nations 2002a; 2006b

13

Percent Change 2000-2005 16.2 11.0 26.4 -7.7 19.2 -59.7 17.7 133.8 36.3 197.5 -4.5 -8.9 9.6 4.8 23.6 -8.7 51.0 -12.9 -24.5 8.7

Graeme Hugo

The overall numbers of migrants in each APEC economy in 2000 and 2005 according to official figures are presented in Table 1.8. However these data include all migrants regardless of when they arrived. In some economies (e.g. Indonesia) most migrants are longstanding having been resident for many decades so the data do not reflect contemporary migration. It also includes refugees and other types of migrants. Moreover migrant workers are not included in some official statistics. An example is provided by the country of South Korea which Table 1.8 indicates had 551,000 overseas-born residents in 2005, down from 597,000 in 2000. Nevertheless Korean government figures presented in Table 1.9 put the number of resident foreigners as being almost twice that figure in 2006. Moreover this does not include some 200,000 irregular migrants in the economy (Asian Migration News, 15-30 June 2007). The government predicts that the numbers of foreigners residing in Korea will increase to 3.6 million or 7.2 percent of the population by 2030 (Asian Migration News, 15-30 June 2007). 1

1

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Table 1.9. Korea: Number of Foreign Visitors and Resident Foreigners, 1990-2006 Year 1990 1995 2000 2006

Foreign Visitors 2,349,399 3,564,539 5,212,729 12,220,240

Resident Foreigners 49,507 269,641 491,324 910,149

Source: Kim 2007

While all economies in the region experience both immigration and emigration, the examples considered so far record substantially greater labour immigration than emigration. In those economies fertility decline began earlier than in other nations and economic growth has been more rapid and sustained over a long period. Despite strict immigration regulations the shortage of labour in these economies has led to major inflows of workers both documented and undocumented. These economies were mainly regions of emigration in the first three decades of the post-war period but have been through a rapid transition to become substantial immigration economies. This transition has been much more rapid than the equivalent transition in Europe and is a distinctive feature of the Asian international migration situation (Martin 1993, 1994; Fields 1994; Skeldon 1994; Vasuprasat 1994). Malaysia and Thailand currently are midway through this transition and are recording both substantial emigration and significant immigration of workers from nearby labour surplus economies (Indonesia, Bangladesh and Burma especially). In passing, however, it should be mentioned that in the contemporary situation all Asian economies are to some extent both emigration and immigration economies with highly skilled workers moving in to even labour surplus destinations areas because of

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

shortages of skills in fast growing economies and the spread of MNCs. Brunei in many ways is more like the Middle East destinations of Asian migrants in that it has vast foreign exchange earnings which have meant that there are not enough local workers to meet the labour demands of the economy so that more than a third of the population are foreigners (Hiebert 1995).

Net Labour Emigration Countries More than a half of the economies in the Asia-Pacific however are unequivocally net labour exporters and in most of them the emigration of workers, most of them temporary, has increased in recent times. Dealing first with Asia, there are two main sets of destinations. Firstly there is a longstanding movement to the Middle East, especially from the Philippines and Indonesia. More recently there has been increasing movement to the Asian immigration economies discussed earlier. Some estimates of the stocks of emigrant workers from Asian destinations are presented in Table 1.10. These figures are at the top end of estimates which vary widely between sources. 1

Table 1.10. Asia: Estimates of Stocks of Migrant Workers in the World Origin Countries Burma/Myanmar Thailand

Laos Cambodia Vietnam

Philippines Malaysia Singapore Indonesia

Number 1,840,000 340,000

173,000b 183,541 400,000

8,233,172 250,000 150,000a 2,700,000a

China

530,000

Total

14,799,713

Main Destinations Thailand

Source of Information Year BurmaNet News, 8 2006 January 2007 Saudi Arabia, Chinese Migration News, March 2002 Taipei, Myanmar, 2002, Scalabrini Asian Singapore, Brunei, Migrant Center 1999 Malaysia Thailand Migration News, January 2004 2005 Thailand Lee 2006 2006 South Korea, Japan, Migration News, 2005 Malaysia, Chinese October 2007 Taipei Philippines Overseas 2006 Middle East, Malaysia, Japan Employment Agency Japan, Chinese Taipei Asian Migrant Center 1995 1999 Yap 2003 2002 Malaysia, Saudi Ananta and Arifin 2008 2007 Arabia, Chinese Taipei, Singapore, South Korea, United Arab Emirates Middle East, Asia and Ma 2005 2004 the Pacific, Africa

a. Documented b. Undocumented

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Nevertheless it indicates the substantial scale of largely unskilled and semi skilled migration out of Asian economies. One of the most significant trends within the labour emigration from Asia has been the so called ‘feminization’ of that migration. International labour migration, here as elsewhere, is a fundamentally gendered process and interlinked closely with changes in the role and status of women in the Asia-Pacific migration. Female migration in Asia has taken some distinctive forms and there is a great deal of segmentation into specific types of migration. Asian economies vary in the extent to which women are represented in labour migration streams as Table 1.11 shows. Clearly in two of the major migrant sending economies, the Philippines and Indonesians, women dominate. The Thai figures are a little misleading in that much female migration is undocumented (Klanarong 2003). 1

Table 1.11. Selected Asian Outmigration Economies: Proportion of International Labour Migrants Who are Women Country of Origin of International Labour Migrants Philippines

2006

1,062,567

59.9*

Sri Lanka

2004

214,709

62.4

Thailand Indonesia Vietnam

2005 2004 2000

128,612 382,514 30,000

17.7 78.0 15.0

Year

Number of Workers Sent

Percent Women

Source Philippines Overseas Employment Administration Sri Lanka Bureau of Foreign Employment Chalamwong 2006, 18 Soeprobo 2006 ,7 Dang et al. 2003, 28

* New hires

We will look in greater detail at a single country of emigration to indicate the main trends. The Philippines is one of the world’s most important emigration countries and its citizens have spread across the globe as Table 1.12 shows. At the end of 2006 there were 8.233 million Filipinos overseas, equivalent to 9.5 percent of the resident population. These were made up of 3.8 million OCWs, 3.55 million whom are permanent residents of the destination and 0.87 were irregular migrants who were predominantly workers. The Philippines began deploying workers abroad in 1974 and shows the numbers grew quickly to 372,784 in 1985. Since then they have trebled so that in 2006 for the first time more than one million Filipinos were sent overseas to work through the official system (1,062,567 persons). There are around a million Filipino OCWs in Saudi Arabia at any point in time – two thirds of all in the Middle East. The numbers in the UAE and Kuwait are also substantial. In recent years Iraq has also become a significant destination. A trend over the last two decades has been the increased flow of 1

16

Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

Filipino OCWs to other Asian economies. At present more than one million work in other Asian economies. The largest group of around a quarter of a million is in Japan but very large numbers are in Hong Kong (194,241) and Chinese Taipei (154,135). Table 1.12. Stock Estimate of Overseas Filipinos as of December 2007 Region/Country Africa Asia, East and South Malaysia Japan Singapore Hong Kong SAR Asia, West Saudi Arabia UAE Qatar Kuwait Europe United Kingdom Italy Americas Canada United States Oceania Australia Sea-Based Workers World Total

Permanent 1,983 213,736 26,002 133,528 29,850 11,471 4,082 350 703 15 94 284,987 90,654 24,598 2,943,812 410,626 2,517,833 243,927 221,892 3,692,527

Temporary 69,880 747,069 90,965 38,329 70,616 116,066 2,055,647 1,046,051 493,411 189,943 129,708 555,542 102,381 82,594 354,352 49,309 128,910 84,927 19,455 266,553 4,133,970

Irregular 18,540 258,640 128,000 30,700 56,000 3,000 121,850 20,000 35,000 5,600 10,000 112,990 10,000 13,000 354,843 3,000 155,843 33,160 9,000 900,023

Total 90,403 1,219,445 244,967 202,557 156,466 130,537 2,181,579 1,066,401 529,114 195,558 139,802 953,517 203,035 120,192 3,653,007 462,935 2,802,586 362,014 250,347 266,553 8,726,520

Source: Baggio 2008

An increasing trend is for OCWs to be deployed to OECD economies outside of Asia. Hence, in 2004 there were 101,249 Filipino OCWs in the United States, 85,527 in Italy and 56,341 in the United Kingdom. Filipinos are also becoming more significant in the Long Term Temporary Business Migration (457) Program in Australia. The English language ability of many Filipino OCWs and the relatively high degree of skill means that they are able to qualify for the selection criteria for temporary skilled migration like the 457 program in the US and H1B in the United States. Most of the OCWs from the Philippines have two year contracts and in recent years repeat migrants or returnees make up around 60 percent of all of those deployed. Most of them are aged in their 30s. A feature of the Filipino migration in contrast to that from other major south and east Asian source countries is that although most migrants work in unskilled or semi skilled jobs as labourers or domestic workers, some 40 percent have a college education (Dimzon 2005). Although there is frequent ‘occupational skidding’ where OCWs with particular skills take on an occupation which does not fully use

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Graeme Hugo

those skills there is increasing involvement of OCWs in jobs like health care professionals, engineering and trades. One example of ‘occupational skidding’ is the increasing pattern of Filipino doctors retraining as nurses because they are better able to qualify as OCWs as nurses. The outflow of medical professionals out of the Philippines has become an issue of increasing concern. Tan (2007) estimates that: • More than 150,000 Filipino nurses (85 percent of Filipino nurses currently working) work outside the Philippines making it the world’s number one exporter of nurses. He says that 70 percent of nursing graduates proceed overseas. • Some 68 percent of Filipino doctors work overseas making it second only to India as a source of foreign doctors. Table 1.13. Philippines: Skill Categories of Newly Hired Overseas Contract Workers, 1998-2003

Skills Category Professional, Medical, Technical Administration and Managerial Clerical Sales Services Agricultural Production FW Classification Total

1998 Sex Ratio Percent M/100 F 25.3 17

2006 Sex Ratio Percent M/100 F 13.4 72

Percent Change 1998-2006 -25.6

0.2

274

0.3

183

+112.2

1.3 1.1 36.8 0.2 34.3 0.8 100.0 n=219,215

137 119 9 8666 252 133 42

2.6 1.8 46.8 0.3 33.6 1.3 100.0 n=308,122

70 77 13 787 344 424 67

+173.1 +119.5 +78.9 +108.0 +38.0 +114.3 +40.6

Source: POEA

Another feature of OCW flows out of the Philippines is that around three quarters have been women. They are especially engaged in three occupational areas – nurses, domestic workers and entertainment workers. Table 1.13 shows the skill level of new hires in 1998 and 2006. It shows that there is an overwhelming concentration in the low skill areas of services and production. Secondly there is a degree of gender specificity in that in the largest categories females outnumber males, especially in the services category. To give an idea of some of the main specific occupations, in 2005 there were 91,412 domestic helpers, 39,495 ‘overseas performing artists’ (71,489 in 2004), 7,768 nurses, 16,146 caregivers (20,394 in 2004), 890 teachers, 325 IT workers. The Philippines has developed a comprehensive system for administering its OCW 1

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

Scheme and is heavily involved in the promotion and protection of migration. As a result legal migration predominates. A fundamental distinction can be drawn between a migration like that of the Philippines which has dispersed across the world to the increasing flows between neighbouring economies which have different levels of development. In Asia, for example, there are substantial flows from Indonesia to Malaysia and from Burma, Cambodia and Laos into Thailand. Pre-eminent in such flows, however, has been the massive flow from Mexico to the United States. Turning to the pattern in Latin America there has been an ‘unprecedented’ increase of permanent migrants (or those who established more or less fixed residence) from Mexico to the United States increasing from 5.4 million in 1970 to 26.7 million in 2003. In addition there is substantial temporary migration (Morales 2008) to make the Mexico-US movement the largest international labour migration flow in the world. The complex set of family relationships between Mexico and the United States is perpetuating migration. The bulk of the labour flow is of low skilled workers with 85 percent having less than a high school education. The average stay of temporary migrant workers from Mexico has gradually increased due to the increase in vigilance along the southern border of the United States. It is important to point out that although Mexico is one of the world’s quintessential emigration examples, it experiences significant immigration from the neighbours Guatemala, Honduras and El Salvador as well as from South American economies. In 2004 alone there were over 200,000 people deported from Mexico. In Chile too there is significant immigration as well as emigration of workers. However while the foreign-born make up only 1.2 percent of Chilean residents in 2002, there were 857,781 Chileans living in other economies equivalent to 5.6 of the number of Chileans in Chile. Almost two thirds (61 percent) of Chileans abroad live elsewhere in South America but North America (18.3 percent) and Europe (14.6 percent) are of increased importance. In Colombia the number of emigrants (over 3 million) is equivalent to 8 percent of the Colombian resident population. There has been a doubling of emigration since 1985 and more a third go to the United States with Spain and Venezuela being next in importance. In the last two decades almost two million Peruvians have left permanently and temporarily with two thirds in the Americas (one third in the United States) and 28 percent in Europe.

Drivers of the New Labour Migration The Three Ds As was indicated earlier the Global Commission on International Migration has identified widening disparities between economies with respect to ‘demography, development and democracy’. These have been of fundamental importance in the increasing scale and impact of international migration in APEC nations. While income disparities are a well established driver of international migration (Massey et al. 1993) and fundamental to migration theory it is perhaps the

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demographic disparities which give us the greatest confidence in predicting further increases in Asian labour migration. As has been argued earlier in this paper, while it would be incorrect to adopt a ‘demographic determinism’ view of future migration in the region, it is crucial to appreciate the demographic underpinnings of current and impending migration within, into and out of the region. Table 1.14. Selected APEC Countries: Gross National Income Per Capita ($US), 2006 Origin

Destination

Cambodia Chile

480 6,980

Australia Brunei

China Colombia

2,010 2,740

Indonesia Laos Mexico

1,420 500 7,870

Canada Hong Kong-China Japan Korea (Rep.)

Peru Philippines Vietnam Myanmar

2,920 1,420 690 Estimated to be less than $905

35,990 Estimated to be $11,116 or more 36,170 28,460 38,410 17,690

Macao-China

Estimated to be $11,116 or more New Zealand 27,250 Singapore 29,320 Origin and Destination Malaysia 5,490 Thailand 2,990

Source: World Bank 2007a

With respect to economic gradients, Table 1.14 shows that there are wide differences between the origin and main destinations of Asian labour migration in income levels. These steep gradients are obviously an element in driving labour migration in the Asia region. Similarly, while there are problems in measuring poverty and especially in comparing incidence in poverty between countries, Table 1.15 indicates that there are high levels of poverty in the main labour sending economies. Despite the reduction in the proportion of Asians living in poverty the gap between living standards in high and low income economies continues to increase. Widening income differentials between nations remains one of the fundamental drivers of migration between them. These differentials are better known by potential migrants now than ever before because of the exponential development of communication systems and global media. Moreover the new Asian youth generation are better educated and better informed about alternative opportunities than any earlier cohort entering these age groups. Young adults have always been more prone to migrate and the new Asian youth generation are more prepared for international migration than earlier generations. 1

1

20

Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

Table 1.15. Selected APEC Countries: Poverty Percent Below National Poverty Line Cambodia China Colombia Indonesia Laos Malaysia Mexico Peru Philippines Thailand Vietnam

Year 2004 1998 1999 1999 1997-98 1989 2004 2004 1997 1998 2002

Percent 35.0 4.6 64.0 27.1 38.6 15.5 17.6 53.1 36.8 13.6 28.9

Percent Population Below $2.00 per Day International Poverty Line Year Percent 2004 89.8 2004 34.9 2003 17.8 2002 52.4 2002 74.1 1997 9.3 2004 11.6 2003 30.6 2003 43.0 2002 25.2 na na

Source: World Bank 2007a, 336-337

China alone has a workforce of 740 million persons compared with a combined 430 million in Europe and North America and it increases by 10 million each year. It is estimated that there are between 100 and 180 million ‘surplus’ rural workers in China. It is apparent that international differences in the supply of, and demand for, labour and wage differences are important drivers of Asian labour migration. It is important, however, to point out that a comprehensive explanation of international labour migration in the region needs to go beyond this. There are a number of elements which both facilitate contemporary labour migration and will continue to do so and these are considered below. There are however other drivers which have encouraged, and will continue to encourage, international labour migration in Asia. One of the most important is what has come to be known as the global ‘war on talent’. As Kuptsch and Pang (2006) have pointed out, an economy’s prosperity is dependent upon its stock of human capital and as a result global competition for skilled workers has intensified. Economies, especially high income economies seek to increase their stocks of human capital not only through their education systems but also through immigration.

Labour Market Segmentation A process which is playing an important role in international labour migration is labour market segmentation (Piore 1979; Massey et al. 1993) which involves migrants dominating particular jobs which are not attractive to the native population. In the Asian case, the bulk of OCWs fill jobs which are of low status, low income and have little security and they concentrate in particular occupations. The reasons for labour market segmentation are complex but it is

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Graeme Hugo

clear that in societies which have experienced substantial economic development that workers become increasingly reluctant to work in jobs which have low status in their society. There are a number of implications which flow from labour market segmentation. Piore (1979) argues that labour market segmentation is a structural feature of developed nations which exerts an increasing ‘pull’ on workers in less developed economies. Massey et al. (1993, 441) point out that this demand for immigrant labour stems from four fundamental characteristics of advanced industrial societies and economies: • Structural inflation. • Motivational problems and status issues. • Economic dualism. • The demography of labour supply. Further, they (Massey et al. 1993, 442) suggest that there are a number of corollaries which flow from labour market segmentation and these have implications for international labour migration policy in Asia: • International labour migration is more demand, than supply, based and it is forces in destination economies which are operating to encourage labour migration, although governments in those economies may not favour it. • The demand for immigrant workers grows out of the structural needs of the economy of destination areas and is structurally entrenched in those economies so that demand for OCWs is long term, continuing and probably increasing. • Wages for OCWs in destination areas are often held down by social and institutional mechanisms, especially where the OCWs are undocumented. • Governments’ ability to influence international labour migration are limited because the OCWs fill a demand for labour that is structurally built into modern, post-industrial economies and influencing this demand requires major changes in economic organization. • The demand for OCWs is, to some extent, independent of vicissitudes in the economy since there are social elements which are barriers to locals entering OCW labour markets even in times of substantial economic downturn.

The Immigration Industry In examining both undocumented and documented labour migration in Asia it is important to recognize that there is an element of ‘self perpetuating momentum’ which has developed so that while movement is influenced by economic trends and policy it is, to some degree, independent of them. In particular, two elements are important in this momentum. One relates to the involvement, of the complex varied group of recruiters, travel agents, lawyers, agents of various kinds, travel providers, immigration officials and an array of gatekeepers of various kinds. There can be no doubt that much of the migration in Asia is at least facilitated, and often initiated, by these crucial intermediaries and this is especially the case for international labour migration and especially for the segment of that movement which is clandestine. While recruitment activity has

22

Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

also been significant in the North American context it would appear to be more important in the contemporary Asian situation. Apart from genuine refugee movements it is difficult to think of a major contemporary Asian migration flow in which the immigration industry does not have a pivotal role. The high levels of profitability associated with people-smuggling and the ‘new slave trade’ involving workers who are effectively indentured to their owners has led syndicates formerly involved in the drug trade to move into this arena. Private agencies are involved in most contract-labour immigration as well as in a great deal of the permanent migration within and out of the Asia-Pacific and Latin America region. The number of immigration agents and lawyers is growing rapidly in both origin and destination areas. They operate both within and outside existing legal constraints. The range of important roles that the middlemen play in the migration process include recruitment of workers, arranging the moves, obtaining jobs at destination, settling in the workers at the destination and facilitating the flow of remittances to the area of origin. These agents have extensive networks on both sides of the border. The illegal migrant is passed from one intermediary to another in a chain of contacts linking origin and destination. Each element in the chain receives a small payment in classic ‘involutionary’ fashion. While large scale organized crime plays an important role there are also many legitimate agents and many small scale operators. The juxtaposition of legal ‘migration’ as being wholly good and undocumented migration as being always bad is faulty. Often undocumented systems offer a safe and trusted network because it starts in the home village with a recruiter who has to bear the results of a failure in the system or of exploitation of the migrant. In most movement there is an array of labour recruiters, agents, immigration officials, document forgers, travel providers etc. who are involved at various stages of the labour migration process, usually with some cost having to be paid by the migrant worker. In some economies the ‘legal’ recruitment and migration process has become complex because of the requirements imposed by the government of the sending economy. A disturbing element in official labour migration programs has been the increased transaction costs which have to be borne by the migrants themselves and the large profits which are being enjoyed by recruiters and other middlemen. It has been estimated that in Thailand the ‘brokerage fees’ being charged by intermediaries amounts to between 46 and 87 percent of the total cost of moving. The government of Thailand has set an average cost for overseas contract workers of Baht 56,000 but the average costs of obtaining work in Japan are Baht 221,000, Taiwan Baht 142,000 and Singapore Baht 111,000. It is true across many nations that high unofficial changes are being made by agencies and middlemen. Agencies are charging for OCWs but are not always fully supplying appropriate training and information to intending migrant workers. The role of middlemen is extending from being recruiting and arranging departure to management of foreign workers, supplying housing, day to day support, sending remittances home etc. As a result, they are increasing in wealth and power and hence have been able to exert power over officials, administrators etc.

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Hence in the present context it is important to stress that there is a massive immigration industry in the region involving many complex chains of people linking origin and destination. These are often operating outside official structures and are so ingrained that influencing them, let alone removing them through policy intervention, is extremely difficult. The industry is proliferating and gives a momentum to the current levels of migration which is difficult to resist. Moreover, the industry often is penetrating particular migration networks so that those networks, formerly totally comprised of family and friends linkages are increasingly becoming institutionalized.

Social Networks It is not sufficiently acknowledged that the majority of international movers in the Asia-Pacific move along well trodden paths, which, if they have not travelled along them before themselves, have been traversed by family members and friends. Migrants tend to travel with friends or family and have a range of contacts at the destination. The networks that are established linking origin and destination become key elements in sustaining and enhancing population flows between them. These networks inject a self-perpetuating dynamism into flows of population, which allows movement to continue long after the original economic reasons for the flow have been superseded or rendered redundant. Whenever a person immigrates, every individual that they know acquires social capital in the form of a contact at the mover's destination which can be ‘cashed in’ at any time to obtain help in getting a job or accommodation and social support while adjusting to the destination. The networks established by earlier generations of movers from families and localities act as conduits to channel later generations of movers to those destinations in an atmosphere of certainty. Previous generations of movers have not only supplied valuable information and encouragement but often paid for, or arranged and eased, the passage. Moreover, when the immigrant arrives at the destination, the destination-end of the network lends valuable assistance in the adjustment process, especially through assisting in gaining access to housing and employment. The fundamental role of networks is to greatly reduce the risks associated with migration and, many movers from Asian origins thus operate in an environment of total certainty. This risk minimization factor is important. While other factors are necessary to initiate the beginning of a new limb of the network once the pioneer(s) is established at the destination, the increase in the subsequent flow can be rapid. The pioneer immigrants constitute anchors to which much larger numbers of subsequent immigrants are drawn. The pioneers can be people who gain access through some form of recruitment or refugee migration but then can facilitate substantial movement through legal family reunification movement. On the other hand, illegal migration is virtually impossible unless there is an informal network linking origin and destination to facilitate the clandestine movement. The pioneer immigration may have occurred for quite adventitious reasons but once established the flow may take on mass proportions. The exponential increase in international migration in the region

24

Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

has resulted in a lateral extension and increasing density of social networks linking potential migrants in the Asia-Pacific to family and friends in within and outside the region. There has been a massive increase in the channels along which potential undocumented migration can occur.

Increased Home Government Involvement In recent years there has been an increase in the involvement of governments in the migration process, not only from the perspective of destination but also origin economies. There is the two sided response of most destination governments that seek to attract high skill migrants who are prized for their potential to fill gaps in the labour market, develop innovations and carry out entrepreneurial activity. On the other hand, most receiving economy governments seek to place barriers to other types of movement, although there may also be gaps in local unskilled labour markets which attract such migrants, especially in large cities. However, in so-called ‘labour exporting’ economies, governments also have become increasingly active because they see the sending of workers temporarily to labour shortage nations: • Reducing pressure on national and regional labour markets. • Enhancing foreign exchange earnings and addressing balance of payments problems. • In some cases providing its workers with skills and training. A whole range of policies mostly directed at enhancing the outflow and maximizing remittance flows have been attempted across countries with varying results. Initially, such movement was seen as a ‘temporary solution’ to labour surplus problems in these economies, however there is evidence that such ‘labour export’ strategies are being structurally built in to economies of some countries on a long term basis. Training institutions (e.g. for nurses in the Philippines) are being established to provide students with qualifications which will enable them to work in foreign countries. Targets for sending workers away and for capturing remittances are being built in to long term national and regional development plans. Governments, however, have varied greatly in the concerns which they have shown for their citizens living and working overseas on a permanent or temporary basis. An increasing number of economies with substantial diasporas of citizens and former citizens living permanently abroad have developed institutions to promote the expatriates maintaining the culture and language of their homeland. Increasingly, economies in Asia are examining ways in which their diaspora can assist in development through return migration of expatriates with key skills or expertise, financial investment in the home economy, carrying out business activity or acting as an agent or bridgehead for products and services developed in their place of origin. China, for example, has been successful in mobilizing a great deal of investment from Chinese overseas who account for the bulk of burgeoning Foreign Direct Investment in the economy. The Vietnamese have been most successful in encouraging the Viet Khu (overseas Vietnamese) to invest in Vietnam. Little has been done yet, however,

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Graeme Hugo

with respect to return migration, although it is clear that Chinese Taipei, South Korea and to some extent China have been successful in attracting back key business people, academics and professionals. Countries which have substantial numbers of nationals temporarily living and working overseas have a mixed record. The all important area here is protection since, in many cases, migrant workers have greatly reduced rights compared with citizens in the destination economies. The situation is often worse for women than men, especially if they are concentrated in vulnerable occupations like housemaids and in the so-called entertainment industry. It is worse again for those who are undocumented. Economies vary greatly in the extent to which they: • Ensure workers are provided with training and information to empower them at the destination. • Provide support systems in destination economies. • Are prepared to negotiate with destination governments about their workers’ conditions. One major difficulty in this area, in some economies, is the issue of corruption. In some cases there are such vested interests in maintaining the existing system which is exploitative of their migrant workers because of financial gains. This leads to bribing of officials at all levels, as well as great pressure to prevent official government intervention to protect workers.

Labour Migration and Development The Impact of Migration In examining the impact of international labour migration there are three areas which need to be considered – the economies of destination and origin and the migrants themselves. It is usually the case that migrants benefit from labour migration since for most the move is motivated by a desire to earn more or improve their work situation. This is the case for the majority of labour migrants in the Asia-Pacific although for a significant minority migration can result in a worsening of their situation. This occurs when they are unable to recover the costs of their movement because of one of the following: • They are not able to get a better paid job at their destination than they have in the origin. • They are cheated out of their destination earnings. • They are forced to prematurely return from the destination before being able to defray their travel costs. • The excessive rent taking of the migration industry. Where migrants are not successful in being economically better off as a result of migration there are a number of common features: • It occurs more often when they migrate outside of the regulated system. • It often is because they have been misled or cheated by a migration intermediary. • They are not sufficiently protected in the destination, in the process of migration or before and after migration in the origin country.

26

Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

Accordingly the major causes of migration not always being economically beneficial for labour migrants can be summarized as follows: • Destinations where there is a clear and manifest need for migrants not having a regime in place to facilitate that migration. • The basic rights of migrants not being protected. • Unscrupulous behaviour by the migration industry. • Inadequate preparation of migrants before migration. • Excessive rent taking by intermediaries in the migration process. All of these things are amenable to effective policy intervention by governments in origin and destination economies. In addressing the broader impacts of migration in origin and destination communities it is important at the outset to insist that migration can and does have both negative and positive impacts. Simplistic pronouncements of migration being an unfailingly positive (or negative) influence on poverty reduction or economic and social development are not helpful. Migration can both support and undermine attempts to alleviate poverty. The crucial issue is that migration can play a positive role and this provides scope for policy intervention which can on the one hand facilitate and enhance those elements of migration which have positive effects and reduce or ameliorate those which have negative impacts. The development of such interventions requires a deep understanding of the complex interrelationship between migration on the one hand and development and poverty alleviation on the other.

Brain Drain The discourse on the effects of migration on development are polarized around two schools of thought. On the one hand the ‘brain drain’ perspective sees migration impact on origin areas being negative because emigration is selective of the ‘best and the brightest’ providing a diminution of human capital which is a constraint on development. Alternatively others point to the inflow of finance, information and ways of doing things which result from the outflow as being positive for development. In fact both perspectives have relevance in contemporary APEC labour migration. A ‘brain drain’ involving a net loss of skilled persons from less developed economies in Asia and a net gain in the more developed economies of the OECD was recognized as long ago as the 1960s (Adams 1968). More recent analyses (e.g. Carrington and Detragiache 1998; Dumont and Lemaitre 2005) have confirmed that emigration rates in low income countries in APEC are higher for skilled groups and that several economies experience a significant brain drain. Moreover OECD members have placed greater emphasis on skill in their selection of immigrants and this with the increasing global competition for talent and skilled workers (Abella 2005) have exacerbated these tendencies. A comprehensive analysis (Dumont and Lemaitre 2005) has collected data from 227 sending nations and 29 OECD receiving economies and calculated emigration rates of all highly qualified (with a university education) for nonOECD nations. The rates are low for large nations such as Indonesia (1.9

27

Graeme Hugo

percent), Thailand (1.9 percent) and China (3.2 percent) but much higher for small nations. Despite these numbers it would be incorrect to assume that brain drain does not have negative impacts in the Asia-Pacific and that there are net losses of the human resources necessary to foster long term development in poorer countries. The Philippines (2005 population 84.8 million) is one of the economies most influenced by emigration and it is estimated that in 2000, 18 percent of Filipinos with college degrees were in the United States alone (Migration News, July 2004) suggesting that at least one in three Filipino university graduates are lost to the economy’s talent pool. Moreover there is evidence that emigration out of poor economies in Asia is selective of their most skilled, most educated and most entrepreneurial. As Carrington and Detragiache (1998, 24) conclude … ‘These numbers suggest that in several countries the outflow of highly skilled individuals… is a phenomenon that cannot be ignored by policy makers.’ It cannot be disputed that the loss of skills in particular areas can impact negatively on the well-being of origin populations and development potential. Particularly significant here is the net loss of doctors, nurses and other health personnel from the developing world. With the ageing of the population in developed economies there have been shortages of medical workers and consequent recruitment of people with these skills from the developing world. In the early literature, brain drain was seen as having an unequivocally negative impact on development in the origin nations since it deprived them of scarce human resources required for achieving economic and social progress. Even the loss of small numbers could therefore be significant. While it is recognized that such effects are still in evidence in the Asia-Pacific, there is increasing evidence that the brain drain’s effects on development are not necessarily only negative. This partly derives from evidence that in some contexts the economies and labour markets in some parts of the developing world cannot effectively absorb some skilled people and they can make a greater contribution to development by emigrating and remitting earnings home. Hence, an interesting econometric analysis based on Philippines data considered that it would appear to return a net benefit to the economy to train physicians for export (Goldfarb, Havrylyshyn and Mangum 1984). In recent years, however, some of the world’s major development organizations such as the World Bank (2006a), Asian Development Bank (2004), International Labour Organization (Martin 2004), USAID (Johnson and Sedaca 2004), DIFD (House of Commons 2004), UN (2006a) and the IOM (2005) argue that emigration can play a positive role in facilitating economic growth, development and poverty reduction in origin areas. It is argued that these positive effects occur through three basic processes – inflow of remittances from migrants, the role played by diaspora in enhancing growth and development in their origin and the return movement of former migrants.

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

Remittances Remittances come from two main types of migrants. Firstly, there is a diaspora of permanent settlers, most of them living in OECD economies. Secondly, the region is a pre-eminent source of the world’s contract labour migrants who almost all remit money to their families in their home. Both of these groups are an important source of remittances into Asia-Pacific economies sending out migrants. However the measurement of remittances is problematical and this difficulty is exacerbated in many contexts by the illegality of much movement, the isolation of the home areas and the long history of remitting money to the area through non-formal, traditional channels. Accordingly estimation of the scale of Asian (and global) remittances is different. The World Bank (2007b) estimated global remittances in 2006 to be US$268 billion and as Table 1.16 indicates, developing economies accounted for 199 billion (74.3 percent) of this. Moreover remittances to developing economies increased by 17 percent in 2004-05 and by 161 percent between 2001 and 2005. Some 45 billion dollars were received in East Asia and the Pacific and 53 billion dollars in Latin America and the Caribbean – over 36 percent of the global total. As Figure 1.3 shows, official remittances to less developed countries are now more than twice as great as official Development Assistance. Moreover in considering these figures it must be borne in mind (World Bank 2007b, 1): 1

1

Table 1.16. Global Flows of International Migrant Remittances ($ Billion) Inflows

199 47 152 101 51

% Change 2005-06 6 2 7 6 9

% Change 2001-06 107 81 116 110 128

44 31

45 32

3 5

125 149

41

48

53

12

119

21

23

24

25

5

64

31 6 59 205

30 7 66 230

35 7 68 257

36 7 68 268

2002

2003

2004

2005

21 88 22 131

25 98 21 144

32 111 20 163

37 119 21 177

3 0 0 3 % Change 2004-05 17 7 5 9

86 62 37 83 % Change 2001-05 161 44 -3 50

2000

2001

2002

2003

2004

2005

2006

All developing countries Low income countries Middle income Lower MICs Upper MICs

85 22 63 43 20

96 26 70 48 22

117 32 85 61 23

145 40 105 75 30

163 41 123 86 37

188 46 142 95 47

East Asia and the Pacific Europe and Central Asia Latin America and the Caribbean Middle East and North Africa South Asia Sub-Saharan Africa High income OECD World

17 13

20 13

29 14

35 17

39 23

20

24

28

35

13

15

16

17 5 46 132

19 5 50 147

24 5 52 170

Outflows

2000

2001

All developing countries High income OECD High income non-OECD World

12 76 22 110

14 83 22 118

Source: World Bank 2007b

29

Graeme Hugo

Figure 1.3. Remittances and Capital Flows to Developing Countries Private debt and portfolio equity

550 500 450 400

FDI

350

US DOLLARS (billions)

300 250 200

Recorded Remittances

150 100

Official Development Assistance

50 0 -25

90 1991 92

93

94

95

96

97

98

99 2000

02

03

04

05

06

07

YEAR

Source: World Bank 2007b

‘This amount, however, reflects only transfers through official channels. Econometric analysis and available household surveys suggest that unrecorded flows through informal channels may add 50 percent or more to recorded flows’. Hence remittances are the largest source of external funding in the several APEC countries. In Latin America as a whole, official remittances are three quarters as large as Foreign Direct Investment and five times larger than Official Development Assistance. Although official remittance data are flawed, Figure 1.4 shows that remittances have been on the rise in recent years. Only in Korea which has been transformed from an emigration to an immigration nation has there been a decline. One of the major sending economies is the Philippines where the Central Bank of the Philippines measures of formal flows of remittances have increased from US$1 billion in 1989 to US$5 billion in 1995, US$6.9 billion in 2002 and US$10.7 billion in 2005. Moreover in 2006 remittances were growing at 15.3 percent greater than at the same time the previous year. Remittances can and do have an impact on the balance of payments of nations. Table 1.17 relates official estimates of remittances to the value of total merchandise exports and imports over the last two decades in several major migrant origin economies in Asia and the effects vary considerably. Remittances are generally small in relation to export earnings in the largest economies of the region, especially China and Indonesia. An exception though 1

1

30

Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

is the Philippines where remittances have made up a major share of foreign exchange earnings for many years. Figure 1.4. Growth of Remittances to the Philippines, Thailand, Indonesia, Pakistan and Mexico, 1980-2007 18,000

7,000

Philippines

16,000

Indonesia

6,000

14,000 5,000

Million $US

Million $US

12,000 10,000 8,000

4,000

3,000

6,000 2,000 4,000 1,000

2,000

2,000

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

0

Year

Year

7,000

Thailand

Pakistan

1,800 6,000 1,600 5,000

Million $US

1,200 1,000 800 600

4,000

3,000

2,000

400 1,000 200 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year

Year

30,000

Mexico

25,000

20,000 Million $US

15,000

10,000

5,000

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Million $US

1,400

Year

Note: 2007 data are estimates

Source: World Bank, http://siteresources.worldbank.org/INTROSPECTS/Resources/ 3349341110315015165/RemittancesData_Nov07.xls 7U

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Graeme Hugo

Table 1.17. Main Asian Labour Exporting Economies: Workers’ Remittances Relative to Exports and Imports in US$ Million, 1980-2006 Economy

Year

Indonesia

1980 1992 2006 1980 1992 2006 1979 1992 2006 1982 1992 2006

Philippines

Thailand

China

Workers’ Remittances 33 264 5,722 421 2,538 15,200 189 1,500 1,333 564 739 23,319

Total Merchandise Exports (X) Imports (M) 21,908 10,834 33,815 27,280 183,964 78,393 5,744 8,295 9,790 15,465 47,028 51,980 5,240 7,158 32,473 40,466 130,575 128,600 21,875 19,009 84,940 80,585 969,073 791,614

R X 0.2 0.8 5.5 7.3 25.9 32.3 3.6 4.6 1.0 2.6 0.9 2.4

R M 0.3 1.0 7.3 5.1 16.4 29.2 2.6 3.7 1.0 3.0 0.9 2.9

Source: Hugo 1995; World Bank Development Report, various volumes and Remittances dataset, http://siteresources.worldbank.org/INTPROSPECTS/ Resources/3349341110315015165/RemittancesData_Nov07.xls 7U

Some have argued that over-reliance on flows of remittances can have negative consequences. Tiglao (1997, 40), for example, argues in the Philippines case that it has insulated a backward agriculture sector from modernization and diverted attention of the need to attract foreign investment in manufacturing. There is considerable concern in Asia (Athukorala 1993) that labour migration, in conjunction with remittances, can lead to so-called ‘Dutch disease: i.e. the appreciation of the real exchange rate. The Dutch disease creates a condition of greater vulnerability to external shocks by stimulating imports and reducing the incentives to develop exports. The Dutch disease also leads to an over-emphasis on capital-intensive methods of production. To avert the deleterious consequences of the Dutch disease, a number of policies can be adopted, including the depreciation of the currency, and structural reforms in the production sector to achieve greater economic efficiency’ (Quibria 1996, 97). Examination of remittances at the macroeconomic level doesn’t always reflect their true impact. Labour migrants are not drawn randomly from across a nation. Most come from particular regions and particular localities within those regions. Hence the impact of remittances is large in those particular areas. This has particular significance when it is considered that many migrant workers come from the poorest areas of the territory. In Indonesia, for example, it has been shown (Hugo 1995) that overseas contract workers are overwhelmingly unskilled workers with poor education. Moreover, they are selectively drawn from rural areas and generally from some of the poorest rural areas such as parts of Java and Eastern Indonesia. Since there is a strong network factor involved in the migration process, these tend not just to be migration areas and regions

32

Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

but migration villages from which it becomes usual for some groups to go overseas to work. This means that the economic impact of remittances is concentrated in particular areas and its effects there are greatly magnified. Moreover, this is often in poor areas which are neglected by central and provincial governments and private investors. It is not always the case that migrant workers are drawn selectively from rural areas however. For example, in the Philippines more came from urban areas. Moreover, Go (2003, 5) shows they come from wealthier families. One has to ask the question, however, of the extent to which that wealth has been a result of remittances rather than a pre-migration characteristic. Remittances from migrants and migrant workers within economies to their origin areas and from OCWs and expatriates to their home economies have been a neglected phenomena in assessments of economic development in the AsiaPacific. The reasons for this neglect are that most remittances have flowed through informal channels, that they have been vastly underestimated in size, their greatest impacts have often been local and regional and there has been a failure to appreciate the full nature of their impacts. However, with the recent massive increase in the scale of remittances, there has been a growing recognition among policy makers and researchers of their importance for economic and social development in the region. In examining redistributions of wealth between developed and developing economies remittance flows are greater than ODA and, in some cases, FDI flows. Some also would argue that remittances are more predictable and stable than FDI and ODA flows and they are especially effective because they are received by families. At the very least, remittances must be an important consideration in discussions of development in many economies in the region.

Diaspora and Development It was shown earlier that poorer economies have increasingly large diaspora based in more developed, especially OECD economies and there is increasing interest in the role that they can and do play in development, growth and poverty reduction in origin areas. The increasing emphasis on diaspora in development research is especially important in the Asia-Pacific region since it has some of the world’s largest diaspora. Hence, a new emerging area of research and policy interest lies in a new, emerging ‘migration and development’ paradigm. This suggests that there are a number of ways in which the diaspora can be mobilized to advance the interests of the home economy. Indeed there is some evidence that diaspora are being mobilized to assist development in the countries of economy. • Firstly, as discussed above, remittances are a more reliable and larger source of development funds to less developed economies than ODA. • Secondly, the diaspora can be both a direct source of FDI and be effective ‘middlemen’ to channel FDI towards the home economy. In China and Chinese Taipei the spectacular economic growth of recent years has been heavily influenced by investment from a diaspora of perhaps 30 million

33

Graeme Hugo

overseas Chinese (Lucas 2003). There has been considerable discussion of how Chinese business and social networks have overcome barriers to international trade. Rauch and Trindade (2002) found that ethnic Chinese have a quantitatively important impact on bilateral trade. Rubin (1996) has shown how Chinese entrepreneurs in the United States are taking their businesses into China. • Thirdly, the diaspora can be a bridgehead into expansion of the economic linkages of the home nation. Korean Americans were the bridgeheads for the successful penetration of the United States market by Korean car, electronics and white good manufacturers. Canadian based studies have shown that a doubling of skilled migration from Asia saw a 74 percent increase in Asian imports to Canada (Head and Reis 1998; Lucas 2001). • Fourthly, diaspora networks have become important in transmitting information both formally and informally. This dimension is largely confined to skilled migrants. Lucas (2001, 22) has shown how professionals in origin and destination economies have maintained strong linkages so that ideas flow freely in both directions. In Chinese Taipei, meetings of local and diasporic scientists are held. In the scientific world, flows of information are of utmost significance and it may also be that diaspora can play a role in technology transfers. The potential for such interaction to accelerate diffusion of new ideas, products, processes, etc. is considerable. Undoubtedly, the ethnic linkages between Chinese Taipei and India with Silicon Valley have had a major impact on the development of the information technology in the home economies (Saxenian 1999). One of the most substantial attempts to tap a diaspora to the benefit of the home economy was launched in Chinese Taipei (Luo and Wang 2001). It is estimated that in the two decades beginning in the mid 1960s, 20 percent of undergraduates in science and technology in Chinese Taipei went abroad for higher education, but that fewer than a fifth returned (Luo and Wang 2001, 5). The government subsequently took a number of initiatives to use the talents of their diaspora including: • The use of formal and informal connections to draw on the expertise and business connections of overseas Chinese from Chinese Taipei, encouraging their visiting Chinese Taipei and interaction with colleagues there. • They track migrants in a database. • An explicit attempt to build a ‘transnational community’ with expatriate scientists and engineers deliberately brought back to attend meetings and conferences sponsored by the government. Clearly there are a number of ways in which the diaspora can and are having an impact on economic development in APEC economies. The important issue is the extent to which government policy can assist in encouraging such developments. There are specific policies and programs that can be utilized to encourage the diaspora to link with development related activities in their home economy. However, part of a diaspora policy has to involve some means to maintain the identity of the diaspora with the home community. This is not a trivial issue. In some cases there may be a certain degree of resentment among

34

Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

the diaspora who may have the feeling of being a forgotten or overlooked. One way of maintaining identity is through the growth of a myriad of expatriate organizations and associations. Several economies have policies and programs that assist these developments, and they can play an important role in the operationalization of the types of programs mentioned above.

Return Migration While there is considerable debate about the impact that the loss of skilled workers has on the economies of the developing world (Rosenzweig 2005), economies with a net migration loss of skilled workers like researchers face a real dilemma with respect to the emigration of skilled persons and students. Although such movement potentially can contribute to development, the reality is that it often results in a loss of important human capital. Lucas (2005, 7-8) has identified that the departure of highly skilled people from developing economies imposes three sets of costs: • Productivity losses – there is a correlation between average years of schooling and the rate of economic growth but Lucas points out that it is contentious whether educational expansion causes growth or expanding incomes permit educational expansion. • Loss of key professions not allowing basic needs to be met – the loss of key groups may lower access to health care and quality education for future generations. • Fiscal losses – this involves two elements – the loss of any net contribution the educated migrant would have made to the fiscal balance had they remained at home, and secondly, the loss of such a migrant exports the returns to the public investment made to their education. The main way in which net emigration countries have attempted to recoup the human capital of skilled emigrants is through return migration programs. Some of the major attempts to encourage expatriates to return have been made by Asian governments. Korea and Chinese Taipei (Englesberg 1995), for example, initiated programs to encourage a ‘reverse brain drain’ (Chang 1992; Hugo 1996) with some success (Yoon 1992), although it is not clear the extent to which this was due to the programs and how much was a result of rapid economic development (Lucas 2001, 41). Saxenian (1999, 59) points out that some of the advantages flowing from these activities was an increase in interaction between scientists and engineers with expatriate colleagues in the United States facilitating knowledge transfer, investment and business cooperation (Lucas 2001, 42). Chinese Taipei has had one of the most comprehensive reverse brain drain programs among Asian economies. Among the initiatives taken by government include: • They advertise jobs overseas where it is known expatriates with relevant skills live, and provide travel subsidies and temporary job placements to returnees. • They have a program to recruit expatriates to Chinese Taipei’s growing universities.

35

Graeme Hugo

They developed the Hinschu Science-Based Industrial Park (HSIP) in 1980 to duplicate the Silicon Valley-type situation. The government provided financial incentives and planned infrastructure to companies relocating to, or forming in, the area. Subsidized Western style housing and commercial services were provided to attract returnees. The government sponsored international conferences on science and technology to give workers of the HSIP access to the international scientific community. The largest outflow of talent has been from China. A recent Chinese Academy of Sciences Report (Asian Migration News, 1-15 February 2007) estimated that one million Chinese students had left to study abroad in the two decades to 2006 and two thirds had chosen to remain abroad after graduation. The Chinese government at both the central and provincial levels have put in place a large number of programs to attract these migrants back on a permanent or temporary basis (Zweig 2006). While there are central government policies to attract back skilled expatriates individual Chinese provinces, companies and development parks also offer a range of incentives to return, including equivalent salary packages taking into account purchasing power, expenses paid trips to China etc. (Asian Migration News, 16-30 November 2002). The Chinese government program offers high salaries, multiple entry-exit visas and access to strictly controlled foreign exchange (Asian Migration News, 16 August 2001). A distinctive feature of the Chinese policy to encourage students and scholars to further their professional development in foreign nations since the late 1970s has been sustained efforts to ensure and encourage them to return to China but the numbers of returned students was very small in the 1980s and early 1990s. However as Zweig (2006, 188) points out there has been a ‘reverse tide’ since the mid 1990s with the numbers coming back increasing rapidly although there has not been an increase in the percentage returning. He demonstrates that large numbers and levels of government organizations actively promote the return of scholars and students but also that the return wave has been associated with ‘political stability, improved housing, better business opportunities and a more vibrant private sector, more modern equipment and management procedures, higher salaries and special incentives’ (Zweig 2006, 212-13). The term Hai Gui meaning the returning sea turtles that were born onshore, grew up at sea but eventually returned to shore again has been applied to this group (Wattanavitukul 2002). Zweig, Changgui and Rosen (2004) have shown that foreign PhDs are worth more than domestic PhDs not only in terms of perceptions in Chian but in their ability to affect technology transfer and capital and bring benefits to China. It needs to be stressed that there is a significant return migration of expatriates to their homelands regardless of the policy efforts by their governments to lure them back. Very few destinations, however, have data on emigration although their statistics on immigration are comprehensive. Canada and the United States, for example, two of the major destinations of skilled migrants, do not collect comprehensive data on persons leaving so we have no indication of the degree of return migration. Nevertheless it is clearly

•

36

Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

significant and is most striking in the high rate of return among Hong Kong immigrants. Although Australia has received fewer skilled immigrants than the United States or Canada it does have comprehensive data on emigration (Hugo, Rudd and Harris 2003). Table 1.18 shows the extent of emigration from Australia to other APEC economies over the 1993-2007 period and compares it to the flow in the other direction and it will be noted that the reverse flow is around a third the size of the incoming flow. There is considerable variation between economies. Circularity is most common in East Asia. Indeed in the case of Hong Kong, China there have been more returning migrants than immigrants in recent years. China is a source of the largest number of Asian immigrants to Australia (Hugo 2007a) and despite the novelty of the flow about a quarter of Chinese immigrants have returned home. 1

Table 1.18. Australia: Settler Arrivals and Permanent Departures (Australia- and Overseas-Born) to APEC Member Countries, 1993-94 to 2005-06 Last Residence

Settler Arrivals

Brunei Canada Chile China Hong Kong, China Indonesia Japan Korea Malaysia Mexico New Zealand Papua New Guinea Peru Philippines Russian Federation Singapore Chinese Taipei Thailand USA Vietnam

1447 10397 2455 76352 41872 30297 9203 10352 30759 441 275829 3481 1770 42969 4376 44173 16109 16007 24658 30398

Permanent Departures AustraliaOverseasAll Persons Born Born 1595 1060 535 13249 7700 5549 1655 554 1101 21449 5178 16271 40955 13451 27504 10339 4613 5726 8336 4618 3718 3823 808 3015 6581 3311 3270 234 133 101 135967 51719 84248 4502 3237 1265 246 121 125 3235 1299 1936 320 159 161 23224 13852 9372 7654 873 6781 6763 3429 3334 58405 39805 18600 6341 1582 4759

Source: DIAC unpublished data

The key point here is that there is a substantial return movement among immigrants to several APEC members. There can be significant dividends to the home economy if expatriates return, especially when they are highly skilled in areas in demand in the local labour market and have expanded their

37

Graeme Hugo

knowledge and experience while overseas and return with a network of overseas contacts that can benefit their work at home. While there has not been much research into return migration, it is apparent that many emigrants desire to return although there are often barriers which prevent return. Nevertheless, there would appear to be some scope for policy intervention to encourage return migration. One of the enduring myths of south-north migration is that there is an overwhelming desire for people from the south to relocate permanently in north countries. In fact among many migrants there is a desire not only to retain valued aspects of their heritage but also to return to their homeland. The extent of circularity in international migration is underestimated. Indeed it has been argued that return migration is often constrained by destination economy policies which make frequent return difficult (Hugo 2005a). One of the enduring features of all diaspora is return migration to the homeland, although its incidence varies greatly. It is apparent that there can be significant dividends to the home economy if expatriates return, especially when they are highly skilled in areas in demand in the origin country labour market, they have extended their knowledge and experience while overseas and return with a network of overseas contacts which can benefit their work at home. There is a substantial literature on return migration and studies of diaspora indicate there is often a high level of interest among many expatriates eventually returning home. Indeed return is often seen as being the conclusion to a successful migration.

Circular vs Permanent Migration A decade ago Castles (2003) argued that the then prevailing model of Asian migration was one which strongly resisted the permanent settlement of new and different ethnic and groups within their boundaries. Accordingly the ‘Asian model’ of migration, settlement and incorporation of immigrants from different cultural backgrounds could be summarized as follows: • Immigration needs to be highly restricted. It is not generally perceived as being a positive thing • Hence, even in economies where there are good reasons for migration, such as the demand for labour or the arrival of asylum seekers fleeing persecution, it is not allowed. • Emphasis has been on constraint, policing and exclusion rather than migration management. There is little tradition of the development of a managed migration system in the nation states. • Where the need for migrant workers, tourists, business people has been recognized as essential to the economy this has been strictly on a temporary basis. • Foreigners should not be allowed to become citizens except in exceptional circumstances. • The national culture and identity should not be modified in response to external influences (Castles 2003, 6).

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

Accordingly in Asian economies where there has been a manifest shortage of labour the response has been to introduce temporary migration programs. As Martin (2001, 1) points out: ‘Guest or foreign worker programs aim to add workers to the labour force without adding permanent residents to the population’. This especially applies to unskilled labour migration in the region but it has for the last three decades been the dominant form of labour migration between Asian economies and from Asia to the Middle Eastern Oil Economies. In the contemporary migration and development discourse two opposing views on this type of migration have been put forward. One group of researchers and policy makers are strongly opposed to guest worker migration. Vertovec (2006, 43) has listed the major questions which surround these programs: • Migrant workers can get locked in to modes of dependency and exploitative relationships with employers. • The fact that such schemes lock in migrant workers to particular employers increases the chances of exploitation and is a barrier to socio-economic mobility. • This migration is often associated with closing of labour markets which cut off opportunities for others. • Enforcement mechanisms are often drachonian. • The rights of most workers at the destination are often restricted so they are socially excluded. • Such schemes foster illegal migration (Martin 2001). There are also other considerations: • They can lead to the forcing down of workplace conditions, wages etc. which forces out local workers. • They usually involve long separation from family which can have significant negative social consequences. However in the recent growth in discussion on the relationship between migration and development there has been increasing advocacy for circular migration as a mechanism which can deliver benefits for migrants and both destination and origin economies simultaneously. Vertovec (2006, 43) suggests there are four reasons for this: • Potentially at least circular migration can deliver a ‘win-win-win’ outcome from emigration since migrant workers return to their origins and bring with them the skills, experience and money they acquire at the destination. • There is a new recognition that remittances can have positive development outcomes and circular migrants remit a much larger proportion of their income to their homes than permanent migrants. • Policy makers in destinations see temporary migration as being more acceptable to public opinion than permanent migration. • Many policy makers believe that new technical knowledge and improved border control systems facilitate tracking of temporary migrants so that the problem of ‘running away’ and becoming an illegal settler in the destination is reduced.

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Graeme Hugo

It is certainly true that much of the opposition to circular migration of foreign unskilled workers grew out of the experience of post-war Europe when several economies opted to cope with labour shortages by importing temporary guest workers but these groups subsequently developed substantial permanent communities. However, it is relevant to ask whether in the contemporary situation temporary migration is necessarily always a prelude to permanent settlement. There is some evidence that this is less the case than in the past because modern forms of transport and communication have greatly reduced the friction of distance between origin and destination economies. This has meant that migrants are able to maintain closer and more intimate linkages with their home area than ever before. Cheapening the cost of phone calls, the introduction of email and fax and the cheapening and speeding up of international travel have not only made it possible for migrants to interact in real time with their home country on a regular basis but visit home more frequently in emergencies and for breaks. This has greatly reduced the imperative for many temporary workers wanting their family to join them in the destination. Indeed, many low skilled migrant workers see a number of advantages of maintaining a regular pattern of circular international migration in preference to permanent settlement at the destination for the following reasons: • They are able to ‘earn’ in the high income, high cost destination and ‘spend’ in the low income, low cost origin and hence maximize the purchasing power of their earnings. • They seek to retain the traditional cultural, language and other associations of their homeland. • They wish to maintain strong wider family linkages and this can be more easily done at home rather than at the destination. The reality is that both permanent and temporary migration can play a positive role in development and in fact a judicious mix of different types of migration is in many cases advisable. The key is having structures which protect the rights of migrants whether they are permanent or temporary.

Labour Migration Issues in APEC Labour migration is increasing in scale and complexity in the APEC region. There are a number of issues surrounding this migration which are the subject of some discussion in the region. Concerns surrounding labour migration vary from country to country because of different contexts but the following are particularly significant.

High Skilled vs Low Skilled Migration One of the defining features of contemporary global migration is the ‘Janus’, two faced way in which countries regard migrants. For high skilled migrants, professionals and many business people the face is a welcoming one but for unskilled workers it is the opposite. There are high skill friendly visas as countries seek to build their stocks of human capital and become more internationally competitive. For low skilled workers, however, even when there

40

Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

is manifest demand for their labour entry is restricted. Even if it is granted it is usually for limited periods under considerable restriction. Thus in APEC, as elsewhere, there is little debate about the wisdom of attracting high skilled workers and indeed several countries have specific visas for such workers (H1B in the United States, 457 in Australia) and have specific programs for recruiting and attracting skilled migrants. They often have ready access to gaining permanent settlement in destinations and have few, if any, restrictions on their activity. For low skilled migrants it is quite different. In several nations, even though there is increased demand for low skilled labour there are no documented structures for them to enter the country. Where there are such programs they rarely allow them to apply for permanent residence and have considerable restrictions on their mobility while they are at the destination.

Increased Feminization of Migration in APEC As indicated earlier, women are becoming increasingly significant in migration flows globally as well as in the APEC region. This applies to both skilled and unskilled migration. In Australia, for example, women have outnumbered immigrants for over two decades. The bulk of this flow is skilled migrants and their families. However it is in low skilled labour migration that women have become particularly prevalent with many such flows form countries like the Philippines and Indonesia having a substantial majority of women (see Table 1.11). International labour migration is very definitely a gendered process and interlinked closely with changes in the role and status of women in the APEC region. It needs to be considered separately because: • the patterns differ from those of men; • the causes and consequences of movement can differ from those of men; • the policy implications of movement can differ from those of men. While the skilled migration of women is increasing most movement of women for work involves them working in low skilled occupations. Moreover among women there is greater occupational segregation than for men. Particularly significant is the movement to work as domestics and carers in the homes of high and middle income groups in destinations. Such workers are subject to considerable exploitation as are those who move to work as entertainers or sex workers. 1

Documented vs Undocumented Migration There is a high level of labour mobility in APEC which occurs outside of legal channels. This is partly because several governments of countries in need of migrant workers do not accept this and do not provide adequate channels for legal migration. It is difficult to estimate the scale of undocumented migration but some estimate it to be similar in scale to the documented migration. Trafficking, especially of women and children, remains substantial and combating it remains an important priority. In discussions of labour migration there is a tendency to dichotomize documented migration as ‘good’ and undocumented migration as ‘bad’ yet it is

41

Graeme Hugo

best seen as a continuum as depicted in Figure 1.5. It is apparent that on the one hand some labour migrants who move through official migration systems are subject to considerable exploitation in the recruitment, travel and destination work situations. On the other, some migrants using undocumented channels have agency and are not exploited. The failure to provide legal channels for migration when the labour market situation is one demanding migrants is often the fundamental cause of undocumented migration and social networks established by such migrants can protect them against exploitation. Hence simple policing solutions to combating undocumented migration are sometimes inappropriate. Of course at the extreme of the continuum trafficking, people smuggling and severe exploitation of migrant workers must be the subject of such action. However it may be that some undocumented migration systems can provide valuable lessons in how migration can be managed in an efficient and equitable way. The challenge becomes to develop documented migration systems which meet the labour needs of destinations while being fair and equitable in their treatment of workers so that the documented option becomes more attractive to migrant labourers. 1

Figure 1.5. A Continuum of Undocumented International Labour Migration in Asia Individually Controlled Movement

Movement Under the Auspices of Middlemen

Misleading Promises

Voluntary Movement

Bonded Labour

Kidnapping

Trafficking

Transaction Costs A major problem in labour migration is the region lies in the excessive amount of rent-taking involved in many systems. At every stage of the process – recruitment, preparation to travel to the destination, in transit to the destination, at the destination and upon return to the home country – migrant workers are subject to making payments for services and to gatekeepers. Of course some such costs are legitimate but the reality is that many of the costs imposed are not necessary or far in excess of the value of the service provided. In some counties unofficial charges made by gatekeeping officials are imposed while the immigration industry providing recruitment, placement, training, travel and immigration services remains unregulated and able to charge fees which are far too large. The result is that many migrant workers and potential migrant workers are forced to take on a substantial debt to migrate which, if the migration fails for some reason, can leave their families in a more impoverished situation than before. Moreover it is siphoning off money away from the migrants and their families and away from its potential developmental impact in

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

the region. Excessive fees are also frequently charged for sending remittances home again diverting money away from its potential poverty alleviation and positive developmental role.

Labour Migration Policy in APEC Introduction One of the defining characteristics of international migration in the Asia-Pacific has been the increasing involvement of government in seeking to influence the pattern of immigration or emigration influencing their economies. The United Nations conducts a survey of governments, each few years to assess their population policies. Table 1.19 indicates the responses regarding immigration. It is interesting to note that in 2005 none of the Asia-Pacific economies responding to the UN survey indicated that current immigration was too high compared with 3 in 1996. Moreover the number of economies with policies to try and lower current levels of immigration fell from 10 in 1996 to none in 2005. This is indicative of the growing realization of the significance of migration and an increasing perception that it is needed for national prosperity. The survey recorded government attitudes toward out movement as well and these are presented in Table 1.20. This indicates that there has been an increase 1

1

Table 1.19. Views and Policies of Asia-Pacific Governments Regarding Immigration, 1976-2005 Views on Level of Immigration

1976 1986 1996 2005

Too Low

Satisfactory

Too High

1 0 1 5

15 16 15 14

1 2 3 0

Total Number of Countries 17 18 19 19

Raise 1 0 2 5

Goal of Policies on Immigration Maintain or Total No Lower Number of Intervention Countries 15 1 17 17 1 18 7 10 19 14 0 19

Source: United Nations 2006c

Table 1.20. Views and Policies of Asia-Pacific Governments Regarding Emigration, 1976-2005 Views on Level of Emigration

1976 1986 1996 2005

Too Low

Satisfactory

Too High

2 2 1 2

14 15 14 12

1 1 4 5

Total Number of Countries 17 18 19 19

Raise 2 3 1 3

Goal of Policies on Emigration Maintain or Total No Lower Number of Intervention Countries 14 1 17 15 0 18 16 2 19 14 2 19

Source: United Nations 2006c

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in the number of governments in the region who consider emigration to be too high. This is partly a function of ‘brain drain’ concerns which are mainly related to the more permanent migration to Europe, North America and Australia. However, there are also some concerns of the negative effects of labour migration. Some in the region argue that it is paradoxical that whereas freeing up of regulations over the last two decades has seen an exponential increase in flows of capital and goods between economies, there has not been a similar breaking down of barriers to international movement of the other factor of production – people. It could be argued that one of the most pressing needs in the AsiaPacific elsewhere is for migration in general, and international labour migration in particular, to be considered by governments in a more objective way. It is clearly an emotional issue but in many cases, especially in destination economies, there is widespread misunderstanding and misinterpretation of the nature, scale and effects of contemporary international migration of workers. Indeed, one of the concerns is that the international labour migration issue is not even on the ‘radar screen’ of both formal and informal discussion. There are myths and half truths abounding about migrant workers and their effects. Stereotypes about involvement in crime, spreading disease etc. need to be empirically justified or exposed as incorrect and there is a need for both governments and the public more generally to see migrant workers as continuing and in some cases an integral part of the local economy. Indeed, in many cases such workers are necessary for the long term health of the economy. The failure to recognize these realities has led to: • Unrealistic policies and programs to replace migrant workers with local workers. • Overly restrictive entry policies which encourage the proliferation of underground migration and marginalize the migrant workers. • Restriction of the rights of international labour migrants. Hence, there is a need in the region for the wider dissemination of quality research based information about the reality of labour migration and its effects to policy makers, planners and the general population in destinations. There is a widespread view in destination economies that the whole migrant worker issue revolves around maintenance of homogeneity, compliance with immigration regulations and border control. However, more positive aspects need to be emphasized such as: • The contribution of workers to the economy. • The fact that most migrant workers wish to maintain strong contact with their home areas and to return home. • The social and cultural benefits of multicultural societies etc. Governments in the Asia-Pacific vary considerably in the stance they adopt on migration as is evident from Table 1.21. Their current policies are summarized below: 1

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

Table 1.21. Summary of Asia-Pacific Government Policies Toward Labour Migration Inflows of Skilled Workers

Outflows Country Passive Policy Indonesia Malaysia Philippines Singapore Thailand Vietnam Canada USA Mexico Colombia Peru Chile China Malaysia Japan Chinese Taipei Hong Kong, China Brunei Australia New Zealand Papua New Guinea South Korea

Active Intervention X

Passive Policy X

X

X

X

Active Intervention X

X X

Inflows of Unskilled/Semi Skilled Workers Passive Active Policy Intervention X X X

X X

X X X X X X X

X X X X X X X

X X

X X X

X X X X

X X X X X

X

X

X

X

X

X

X

X X X

X X X

X X X

X

X

X

X

X X

X

Policies in Net Labour Immigration Countries The main impediments to the international movement to labour in the APEC region are viewed as being in the role of the receiving rather than the sending countries. Policy regarding immigration in ‘receiving’ economies of the AsiaPacific is an increasingly contested discourse. This is evident, for example, in the United States where many commentators and indeed the government have backed reform of the US immigration system but the Congress has not been able to get enough votes to push reform through. Immigration in economies like the US, Australia, Canada and New Zealand is a policy area which cuts across the major conservative/liberal political groupings with supporters and opponents on both sides of politics. Accordingly administrators tend to steer a middle course. In the four ‘traditional’ migration countries there are longstanding formal immigration programs which have provisions for permanent settlement. As indicated earlier these vary in the relative size of the intake and the balance between skill, family and refugee migrants. While there are internal debates domestically, there is a general trend toward skilled migration becoming

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increasingly important. As a result for skilled migrants it has become somewhat easier to enter these economies over time. However for low skilled migrant it has become more difficult. The regulations and mechanisms have varied over time in each example but Canada, Australia and New Zealand have Points Assessment Systems for their large skill/economic migration program and these place a premium on formal education, skills, work experience and youth. In the US family reunification accounted for two thirds of the 1.27 million immigrant settlers in 2006, refugees 20 percent and those admitted for economic or employment reasons were 12.5 percent of admissions. However in general the intakes of permanent settlers in the traditional immigration nations are increasingly high skill oriented. In their efforts to increase their skill base the traditional immigration economies have introduced and expanded temporary work visa categories as an increasingly important vehicle for the admission of foreign workers, in particular skilled foreign workers. These programs are intended to provide employers with access to the global market of highly skilled workers in short supply locally. The programs are predominantly focused on skilled workers, and tend to tie the migrant worker to a single employer. In Australia the numbers are market driven while in the US they are capped. Within the countries there is debate between those that want the number of temporary skilled migrants increased to cover skill and labour shortages and those that perceive them to be driving down work conditions and displacing or replacing potential native workers. Foreign students have become an important element in the inflow of skilled workers to traditional migration countries and each of the countries are active in recruiting foreign students and putting in place policies to facilitate their transition to permanent settlement. Temporary migrants are an increasingly significant element in the labour force of these countries (e.g. in Australia around 4 percent of the workforce – Hugo 2006b). The emphasis on skilled workers in the temporary labour migration programs is increasingly contested by those who argue that there are significant low skilled labour shortages. Hence Canada has introduced a ‘Low Skill Worker Program’ which allows for low skilled workers to come to Canada for a period of up to two years with a chance of repeating. New Zealand has for several years had special programs with a small number of Pacific countries and has recently introduced a special temporary worker program to recruit 5,000 seasonal agricultural workers from the Pacific. Similarly Canada has special programs with Colombia, Mexico and Costa Rica for temporary movement of agricultural workers. The United States has special categories of temporary visa for agricultural and other seasonal workers. On the other hand Australia has resisted calls for a low skilled temporary visa program although such a program with the Pacific is currently being considered. In the United States a major policy issue relates to undocumented migration and a policy of placing an emphasis on enforcement against illegal entry and compliance has been pursued, especially in the House of Representatives, while skirting around the issue of reforming legal admission categories. There are

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

important bills to reform the US migration system under consideration to streamline both family and skill based admission of migrants. Turning to the ‘new’ immigration economies, until relative recently there has been strong opposition to permanent settlement of immigrants. In Japan there has long been opposition to immigrant settlement on the grounds of it disturbing the ethnic homogeneity of its population. However low fertility and the commencement of a decline in the population in 2005 has seen a slow changing of policy. Indeed some argue that Japan is becoming a ‘de facto’ immigration country. In 2006 there were 2.08 million legal immigrants in Japan, almost a million of whom are workers. These include around 100,000 trainees and almost a quarter of a million foreigners who are of ethnic Japanese descent. Immigration policies are currently under reform process which began in 2006 and will conclude in 2009 (Iguchi 2008). Overwhelmingly the new immigration economies have adopted migration policies which are focused on temporary migration, restricting the rights of migrant workers and the length of time they can spend in the destination. This attitude remains in place for low skilled workers but some economies are now encouraging the permanent settlement of skilled foreigners. There is a clear difference in the immigration avenues open to high skilled and low skilled workers. This is most clear in Singapore where low skilled workers gain entry on a strictly temporary basis and have limited rights whereas high skilled workers have the same flexibility as Singaporeans and can apply for permanent residency. One category of permanent migrants becoming increasingly important in Japan, Korea, Chinese Taipei and Singapore are foreign spouses (mostly female). Such migration is often commoditized with agencies arranging the cross border marriage and it has become more significant with the increasing gender imbalance in younger ages in some cases. In Chinese Taipei, for example, 383,204 foreign spouses immigrated between 1990 and 2006. As in the United States undocumented migration is a policy issue among the new immigration economies. One country with a significant number of irregular migrants is Malaysia where it is estimated that there are 700,000 in Peninsular Malaysia and 150,000 to 200,000 in Sabah (Kanapathy 2008), three quarters of them from neighbouring Indonesia. There are ongoing efforts to reduce the number of irregular workers through both enhanced compliance efforts and expansion of the legal migration program. In Malaysia, as in many destinations however, the high transaction costs of legal migration (the foreign worker levy and other formal and informal costs) make it cheaper for migrants to move irregularly, despite the exploitation and threat of deportation which hangs over them. Abella (2008) has argued that the Asia-Pacific region faces a major challenge in the governance of migration: • How to address illegal migration? • How to manage the demand for labour? • In the medium to long term, how to deal with the problem of ageing and the consequences of declining labour supply? • How to make migration not a necessity but a choice?

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The first three of these challenges are squarely in the destination economies and there can be no doubt that there are pressing needs to improve the governance of migration in the region. As is the case with the United States several of the new migration economies have introduced policies and measures to counter undocumented migration. In Thailand, for example, there has been an influx of foreign workers from crossborder flows from Myanmar, Laos and Cambodia to the agriculture and fishery, construction, and services sectors. Chalamwong (2008) identifies a series of measures: • Foreign worker registrations were carried out periodically, granting lenient treatment and work permits to illegals in various provinces, sectors and occupations. • The new Employment Act in 2008 recognizes the hiring of unskilled and semi-skilled workers in occupations and areas specified by the Labour Ministry as well as introduce the imposition of a levy on employers, and registration fee on foreign workers. In preparation for implementing the new law, the government decided to extend the existing work permits as well as the illegal workers who hold registration documents to re-register and to renew their work permits.

Policies in Labour Sending Economies With respect to sending economies there is considerable variation between nations but policies tend to fall into four categories – managing the volume and direction of labour flows, preparing migrant workers, protecting their rights and welfare and efforts to prevent the loss of highly skilled workers. Managing the volume and direction of outflows Each of the study economies has their legal framework for sending international labour migrants abroad. Several governments (e.g. Indonesia) explicitly factor international labour migration into their development plans with the objective of reducing unemployment, encouraging an inflow of foreign exchange and way of skills acquisition. Some are active in seeking out destinations for their workers but most leave this up to the private sector. However, most economies also have undocumented migration which does not go through official government channels. This is preferred by some migrant workers because of its lower cost and greater speed. The Colombian government has recently put in place a ‘Temporary and Circular Labour Migration Program’ in order to control labour migration out of Colombia. The program is regulated and approved at both origin and destination allowing workers to work overseas for a specified time (up to 2 years) period before returning (Stephenson 2008). After return the workers may be brought back to the destination for a repeated period. One of the elements in the policy framework for emigration of workers in the sending economies is the control of migration agents who play a key role in the labour migration process. Transaction costs vary within and between

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

economies but there is a high level of excessive charging of migrants. Government efforts to control their practice vary in their success. In the Philippines the system set up to facilitate the recruitment and deployment of seaworkers has been effective in making employers meet all recruiting costs so that the migrant workers do not pay any such costs. However this is the exception rather than the rule and the Indonesian study (Ananta and Arifin 2008) found that around US$200 million is made each year by the middlemen in the official labour migration process. Training of migrant workers Some governments in the region have policies which specify that workers sent abroad have to meet minimum health and skill requirements. They also have programs to provide training and to intending migrant workers or have regulations which force private sector agents to provide this. Pre-departure training to empower workers to adjust to foreign work and living conditions are a feature of most programs but they vary greatly in their quality and effectiveness. Some practices in this area have been built up by NGOs in the Philippines and in Singapore through the Singapore International Foundation. Protecting workers’ rights Labour sending economies vary in the extent they have set up institutional mechanisms to protect migrant workers. The Philippines has the most developed system to protect its overseas workers (Tullao 2008). This includes: • Mechanisms to protect the rights of migrant workers. • Licensing and regulation of recruitment agencies. • Developing programs to ensure quality employment. • Provide a provident fund. • Provide accident protection. • Repatriation programs. • Negotiating bilateral labour agreements. Other economies have at least some of these programs but protection of workers remains a significant issue, especially at the destination. Many OCWs are outside the reach of protection institutions because of their undocumented status or the nature of their work situation (e.g. housemaids). There is a need for better protection of OCWs. The government of Chile has signed 22 bilateral agreements on social security with countries on social security and provision portability (Stephenson 2008). Expatriate policies In addition to the policies relating to temporary migrant workers some countries also have policies which are aimed at expatriates who are more permanently established at the destination. Policies and programs to maintain contact with their diaspora, encourage their cultural and language maintenance and develop and enhance linkages with their homeland are not new. Greece and Italy, for example, have been involved in such activities for over a century. Governments

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have varied in whether they have engaged their diaspora, the extent of engagement and as Newland (2004, 3) points out, involvement has ranged from active courting of them through indifference to hostility. However, with the rapid growth of expatriate communities and new forms of information and communication technology, more nations are actively attempting to engage their diaspora, and it is being seen as a policy area which may assist development efforts in developing economies which experienced significant emigration. Moreover, there has been a substantial shift occur in the attitude of developing economies toward their diaspora. In the Philippines, for example, the high level of emigration of contract labour and permanent settlers was depicted in local discourse in the 1970s and early 1980s as a ‘national shame’ (Aguilar 1996). This migration was seen as a temporary phenomenon which had to be endured while the Philippines made the transition to a more developed economy. The fact that millions of Filipinos were forced to seek their destiny overseas was perceived as a ‘national failure’. However, in the last decade, Filipinos overseas have been hailed as ‘national heroes’ (Rosales 1999) who are making a crucial and important contribution to development. This represents a major turnaround and the Philippines now has a suite of policies and programs to support their diaspora and encourage them to maintain strong linkages with, and return to, the Philippines. A similar transition was experienced in Mexico in relation to the large scale migration to the United States. This maturation has led to governments of the Philippines and Mexico accepting that emigration is a structural feature of their societies and economies and putting in place policies and programs to enhance its positive effects and ameliorate its negative consequences. The Mexican government set up a Program for Mexican Communities Living Abroad in 1990, an Office for Mexican Abroad was set up within the Executive Branch in 2000 and a Mexican Foreign Institute set up in 2002. There are wide differences between countries in the strategies they have pursued to engage their diaspora (Kapur 2001; Hugo 2003; Newland 2004) and mobilize them for development of their home nations. In some instances, like the Philippines, governments have developed a comprehensive suite of policies and programs targeted at emigrants, temporary labour migrants, second and later generations, the marriage partners of Filipinos overseas and Filipino Youth overseas. What are the types of initiatives undertaken by governments? • Remittances – Some governments have encouraged remittance flows through offering preferential banking treatment, high interest rates and duty and tax free privileges. • FDI – In several countries (e.g. China) the diaspora have been major suppliers of Foreign Direct Investment. • Creation of formal groupings of expatriates has been facilitated by modern ICT. The Commission on Filipinos Overseas (CFO) was established in 1980 with the following mandates: - provide advice and assistance to the President and the Congress of the Philippines in the formulation of policies concerning or affecting Filipinos overseas;

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

-

•

•

•

•

•

develop and implement programs to promote the interests and wellbeing of Filipinos overseas; - serve as forum for preserving and enhancing the social, economic and cultural ties of Filipinos overseas with the Philippines motherland; - provide liaison services to Filipinos overseas with appropriate government and provide agencies in the transaction of business and similar ventures in the Philippines. (Commission on Filipinos Overseas 2002). Engagement of the diaspora in the domestic political and economic life. In some cases they have elected representatives of the diaspora in parliament (e.g. the Philippines). Several have cultural and language maintenance programs which fund teaching in the diaspora, cultural visits, exchanges, etc. Some have established networks linking expatriates with colleagues working in a similar area of business or research in the home economy to facilitate rapid technology transfer. Similar linkages can be used for goods produced in the home economy to penetrate markets in destination economies. Some have attempted to undertake censuses of their diaspora in order to establish a database on the human capital in the diaspora. Encouragement of joint economic or research/scientific activity between expatriates and colleagues at home. Table 1.22. Alternative Regimes for Taxing Flows of Human Capital Enforcement/ Compliance Costs

Behavioural Consequences

Exit tax (one-time fee on human capital)

Low

Intermediate

Flat tax (% of wages)

High

Intermediate

High

Intermediate

Low

Medium

Low

High

Tax Regime

American model (nationality not residence) Cooperative model (sharing payroll taxes)

Revenue Collection Moderate (single-shot) Moderate to high (continuous)

Source: Kapur, 2001, 282

•

There has long been some discussion that developing sending countries impose some form of taxation on skilled emigrants moving to developed economies (Bhagwati and Partington 1976). More recently a number of options have been considered and these are presented in Table 1.22. Each of these tax policies has difficulties associated with it and such policies remain unworkable in the present climate. 2

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Return migration Some countries with substantial diasporas have developed programs to bring home expatriates. Some of the major attempts to encourage expatriates to return have been made by Asian governments. Korea and Chinese Taipei (Englesberg 1995), for example, initiated programs to encourage a ‘reverse brain drain’ (Chang 1992; Hugo 1996) with some success (Yoon 1992), although it is not clear the extent to which this was due to the programs and how much was a result of rapid economic development (Lucas 2001, 41). The Colombian government in 2003 established a program entitled ‘Come Join Us’ promoting links between Colombians living outside of the country with their families at home. Peru was the first country in the Americas to encourage the return of its citizens from abroad. A ‘Law of Migrating Incentives’ passed in 2004 provides fiscal and professional incentives to encourage nationals to return. The ‘Mi Vivienda’ program of 2008 encourages and facilitates Peruvians abroad to buy their own houses in Peru using remittances with a view to them returning at some point (Stephenson 2008, 24).

Existing Cooperation on Migration in APEC Economies There is general agreement that in the new ‘age of migration’ economies cannot aspire to stop migration flows but they are best advised to develop effective management of that mobility which maximizes benefits while preserving the integrity of borders and human rights. Effective management of migration is very much dependent on international cooperation, bilateral, regional and multilateral. It has become commonplace in the burgeoning number of international meetings on international migration, policy and management of international migration to conclude with a consensus of the need for such cooperation. However, the cases where such admirable intentions have become translated into operational activities on the ground remain few in number. The development of regional economic blocs such as NAFTA and the EU, has seen massive shifts which have facilitated regional flows of investment, trade and finance but initiatives regarding flow of people have been fewer. In Asia the global trend toward regional organization development and regional cooperation is in evidence in the development of organizations like APEC (Asia-Pacific Economic Cooperation) and ASEAN (Association of South East Asian Nations). However, little has been achieved with respect to regional agreement on international migration issues. Indeed in ASEAN despite the fact that all members have been strongly influenced by migration since its formation the sensitivity to the issue, prevented the issue even being discussed until relatively recently. It would appear though there is an increased readiness in ASEAN to discuss migration issues. The 1995 ASEAN Framework Agreement on Services (AFAS) provides inter alia, for regulatory convergence and regulatory harmonization, including Mutual Recognition Agreements. ASEAN members may recognize the education or experienced obtained, requirements met and licensing or certification granted by other members. However, progress in Mode 4 (GATS-speak) on movement of natural persons and progress on mutual

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

recognition arrangements (MRAs) has been slow. The Bali Concord II in 2003 called for completion of MRAs for qualifications in major professional services by 2008 to facilitate free movement of professionals and skilled labour within ASEAN. Cooperation is still limited on core migration issues such as orderly recruitment of migrant workers; protection of the rights of migrant workers; facilitating circular migration; facilitating remittance flows; harmonization of migration information collection. The terrorist attacks of 11 September 2001 have raised concerns over the security threat of labour migration, and regional cooperation is needed to ensure regional and national security. The ASEAN Economic Community to be realized by 2015 includes only free movement of skilled labour. • Allow for managed mobility or facilitated entry for movement of natural persons engaged in trade in goods, services and investment through facilitating the issuance of visas and employment passes for ASEAN professionals and skilled labour engaged in cross-border trade and investment related activities. • Facilitate free flow of services through harmonization and standardization to facilitate their movement within ASEAN. This entails completing MRAs in various service occupations; enhanced cooperation among ASEAN University Network members to increase mobility of students and staff; develop core competencies and qualifications for job/occupational and trainers’ skills required in the services sectors; strengthen the research capabilities of ASEAN countries in terms of promoting skills, job placements and developing labour market information networks among ASEAN countries. A major step forward in ASEAN recognizing the significance of migration was the ‘ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers’. This contains commitments among other things to share data, promote ‘decent humane, productive, dignified and remunerative employment for migrant workers’, control smuggling and people trafficking and extend assistance to migrant workers caught in conflict situations. APEC, too, has introduced a number of measures particularly to facilitate the mobility of professionals and business people. These initiatives include: • The APEC Business Travel Card Scheme simplifies the entry of cardholders into the participating members (with special lanes at airport immigration control), and reduces the time and costs for applying for entry visas and permits. • APEC has also agreed on a service standard for processing applications for, and extensions of, temporary residence permits for executives, managers and specialists transferred within their companies to other APEC economies. • The APEC Advanced Passenger Information (API) systems enable all passengers to be processed in advance of arrival in destination economies by instituting the check at the point of checking in to board aircrafts and sea vessels at the point of origin.

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APEC has also initiated Mutual Recognition Arrangements (MRA) for certain occupations and skills to facilitate international and regional labour mobility. The North American Free Trade Agreement (NAFTA) is one of the oldest, largest and most successful FTAs involving the USA, Canada and Mexico. It includes considerations of temporary movement but only of highly skilled persons. The categories of workers are specifically defined. One of the original considerations in developing NAFTA was that it would encourage Mexican development and thereby reduce migration to the United States. The migration component of NAFTA has been the Trade NAFTA (TN) visa which has been uncapped for Canada since 1994 and Mexico since 2004. Applicants need to have appropriate qualifications and a job offer within the recognized skill area. However Martin and Lowell (2008) point out that NAFTA has provided: ‘an environment for constructive engagement, rather than endless recriminations, in addressing issues of migration concern. One byproduct of NAFTA has been the strengthening of a range of bilateral mechanisms to address migration matters’. This has also been observed of APEC (Hugo 2004) and may be one of the most important achievements of such agreements. Bringing key immigration officials together in a non-threatening atmosphere to discuss issues of mutual interest can build up mutual trust and confidence which can be the basis for more detailed later engagement. There are growing indications that bilateral negotiation and agreement may be a useful first step in achieving better migration outcomes. Destination countries are wary of what they see as open ended agreements which they perceive to challenge the sovereignty of their nation state. Bilateral agreements can be specific and demonstrate that a regularized, fair and equitable migration system can work to the benefit of the destination country, origin country and the migrants themselves. Such agreements can take out the role of many rent seeking agents who thrive in the contemporary situation and reduce the transaction costs of migration. Importantly, too, it provides migrant workers with security at their destination. The transaction costs of migration, which are predominantly borne by the migrant workers themselves, will not be reduced without state intervention. Such intervention will necessitate close cooperation between origin and destination economy governments. It is, however, proving difficult to get pairs of origin and destination economies together to discuss migration issues which mutually influence them both. Indeed, it has even been difficult to get ‘labour exporting’ economies together to agree on minimum standards, workers rights etc. although in 2003 Indonesia and the Philippines signed a bilateral agreement to consolidate their efforts. There have been strong feelings of competition and little cooperation. It has been argued (United Nations 2002b, 21) that ‘the adoption of the General Agreement on Trade in Services (GATS) during the latest rounds of the General Agreement on Tariffs and Trade (1993) provides a general framework for trade related temporary movements of people based on government to government agreements. So far, no such agreement has yet been worked out as

•

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

GATS contains no clear specific rules regarding the movement of labour. However, a number of developed economies, including the EU as a whole, have taken steps toward the formulation of agreements’. Hence there are some promising signs of a recognition of the structural nature of non-permanent migration in many developed economies and its long term significance and importance. Many of the existing Bilateral Free Trade Agreements (FTAs) contain provision for the ‘movement of natural persons’. The liberalization of services trade has prompted the need to guarantee free mobility of professional workers and service suppliers. However in the region the extent to which FTAs have been used to facilitate international labour migration has been limited. Most FTAs include little or no consideration of migration. Where migration is included in FTAs it tends to involve professional and high skilled migrants or corporate and other transfers within companies operating across countries. Some economies have negotiated bilateral agreements on migration. Several countries appear to be demonstrating a preference for this option rather than undertaking permanent Mode 4 concessions in the WTO or in bilateral or regional FTAs (Stephenson 2008, 33). Hence the Philippines have been very active signing agreements with 13 countries since 1974. The agreements are of two categories (Tullao 2008): • Labour recruitment and special hiring agreements. • Labour employment and manpower development agreements. They cover such issues as terms and conditions of employment and mobilization of Filipino workers, exchange of trainees, promotion of co-operation on labour, employment and manpower development, protection of rights of migrant workers, training and certification of migrants, exchange of information and development of collaborative training. In recent years an MOU has been signed with the Canadian province of British Colombia to help fill its needs for 350,000 skilled workers over the next 12 years. Thailand has an agreement with Chinese Taipei regarding brokerage fees and support services for migration workers. Malaysia has developed bilateral co-operation with its major labour sending economies. The Mexican government established a Bilateral Program for Temporary Agricultural Workers with Canada in 1974 (Stephenson 2008, 34) and more than 10,000 workers are sent each year to meet seasonal labour shortages. Due to its success the Canadian government is planning to extend this type of bilateral arrangement to other sectors like tourism, construction and hotels. Colombia has signed bilateral agreements with Spain and Canada to send seasonal workers in fruit harvesting and food packing in a dignified and orderly fashion.

Recommendations Among all of the massive transformations which have swept across the AsiaPacific in the last half century, the increase in population mobility has been one of the most striking. There has been an increase in both scale and complexity of

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population movement both as a cause and a consequence of the dramatic social, economic, political and demographic changes. International labour migration has been an important part of this change. The scale, spatial patterning and composition of international movements have increased with rapid economic transformation, globalization, political change, development of education etc. There is every indication that international population movements in to, out of and within the region will continue to increase in scale and significance. While there is a great deal of variation between economies, it is clear that demographic, economic and social changes within the region will continue to favour an increase in international movement, as will differences between the Asia-Pacific and other regions. Demographic gradients will continue to widen over the next two decades and despite the prediction of neoclassical economic theory, it would not appear that the large economic disparities between economies are lessening. These demographic and economic trends are not going to change in the short term but are long term structural elements in the economies of the regions and in the economies of destination of Asia-Pacific emigrants and migrant workers. As was indicated earlier, there are other elements too, which are entrenching international labour migration in the APEC region and there is no evidence of these diminishing in influence. The first of these is the process of labour market segmentation, the second is the burgeoning of the global international migration industry which is committed to the sustenance and expansion of migration between countries and, thirdly, the proliferation of social networks which are growing exponentially and linking more and more residents of less developed countries to more developed economies in ways which will encourage and facilitate migration. Remittances are becoming crucial elements in the foreign exchange earnings of many Asian labour migration sending countries, while whole sectors of the economy in destinations are becoming dependent on migrant labour. However, while all of these forces are working toward international labour migration becoming more embedded in the structure of the region’s economies and both the demand and supply factors encouraging that migration are increasing in strength, the barriers to the mobility are also increasing. At least this is the case for unskilled workers who make up the great majority of the region’s international labour migrants. Hence, international migration will almost certainly continue to increase in scale, diversity and impact. It is ‘here to stay’ in the Asia-Pacific as a permanent structural feature of economies and societies and must no longer be considered as a temporary, ephemeral phenomenon. As Castles (2003, 22) argues, there is a need for the elites of many economies to make a ‘conceptual leap’ with respect to international migration policy involving in part the recognition of the long term significance of migration and settlement in the region. As he correctly states, the conceptual leap … ‘is not likely to happen quickly, but the human costs of delay may be high’. Migration has the potential to improve the situation of people in poorer economies and to facilitate their development. However, making this happen will be in part dependent on the formulation of a judicious range of migration policies within countries of origin

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

and destination and in achieving a greater degree of cooperation between sending and receiving countries. The PECC-ABAC study has developed an initial set of recommendations to facilitate progress toward migration in the region being a more effective, efficient and equitable process. At the outset, however, it is necessary to make a few cautionary remarks: • Migration can not be seen as a substitute for good governance and the development of a sound economic development policy within less developed economies. Its role is a purely subsidiary and facilitating one in the development process. • Migration is a controversial issue in many countries and there are real sensitivities about the involvement of foreign governments in matters relating to the movement of people into their territories. Over a long period this sensitivity has been a barrier to developing meaningful dialogue between pairs of sending and receiving economies. • Migration and development policy are the preserve of different agencies or departments within national governments. Any integrated development policy needs to be interdepartmental and cut across the sites of particular government interests. • Consideration of migration and development initiatives involves, potentially at least, not only activities in low income origin economies but also in destination economies and there has been a great deal of difficulty in the past in getting origin and destination governments together to discuss joint policy implications. Nevertheless two basic points need to be made: • People movement has increased, and is increasing, in the APEC region. • The weight of empirical evidence is that this mobility can be harnessed to facilitate poverty reduction and positive developmental outcomes. While there is much that is not known yet about linkages between population mobility on the one hand and poverty reduction and development on the other the PECC-APEC Labour Migration Study has concluded that labour mobility is an increasingly significant phenomenon in the Asia-Pacific region that should be addressed by APEC. Paying attention to labour mobility would complement APEC’s goals of liberalization of the movement of goods and financial flows as well as the facilitation of business travel. Emphasis on the facilitation of labour migration must be seen in the context of globalization, transnational networks of production, business opportunities and a boundary of social and cultural perspectives in the region. Hence the study makes the following recommendations: 1. Improving Governance of Migration Systems In several countries in the region there is a need to not only reform international migration systems but for wider reform of labour market policies and development of strong labour institutions which involves migrants along with employers and non-migrant workers. It is clear that poor governance is an important barrier to migration delivering potential development dividends to

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both origins and destinations as well as the migrants themselves. There are several specific elements which need to be considered: (a) Capacity Building. As was indicated earlier, a major constraint to the harnessing of the potential of people movement to assist in the achievement of positive development outcomes has been a lack of the appropriate infrastructure and human resources to manage migration. The development of this capacity is a fundamental building block if migration and development objectives of achieving a win-win-win outcome for migrants, origins and destinations are to be achieved. There would seem to be a role here for economies like Canada, the United States, Australia and New Zealand which have considerable capacity and experience in development of migration policy and it operationalization which can be passed on to countries with less experience in dealing with migration. (b) Compilation and Exchange of Better Information on Migration. Comprehensive, accurate and timely data and information are necessary for effective migration management. Moreover effective exchange of information between countries is necessary if countries are to be able to monitor and study both immigration and emigration. (c) Develop and Strengthen Migration Institutions and Procedures. Development of a sound labour migration structure can render undocumented migration unnecessary while effectively meeting labour shortages in destination economies. 2. Strengthening Bilateral, Regional and Hemispheric Consultative and Cooperation Mechanisms To achieve maximum benefits from labour migration it is becoming increasing apparent that cooperation between economies is necessary. However the transition of governments’ thinking about migration primarily in terms of sovereignty, self-interest and unilateral policy making to recognizing the value of international co-operation and co-ordination is difficult and slow. Yet this recognition is occurring. It may be that the current high interest in security may facilitate wider co-operation on migration issues. The existing mechanisms for dialogue are in the early stages of development and for their rich promise to be fulfilled will require careful nurturing and management. Beginning with basic, relatively non-controversial things like exchange of data and information, curbing trafficking and people smuggling, etc. can build up a relationship of trust between economies which can be the basis for eventually moving to more contested subjects. 3. Remittances The World Bank (2006a; Terry and Wilson 2005) is placing considerable emphasis on the development of policies to maximize the amount of money remitted by migrants to their home area and the effective capturing of these resources to facilitate poverty reduction and development. There are therefore two areas of policy concern: • To maximize the inflow of remittances.

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

To mobilize remittances to enhance development. With respect to the first, one issue is the exorbitant costs which have often been involved in the process of sending money home. In 2000 the average cost of sending remittances to Latin America was 15 percent of the value of the transaction. However since then greater competition, advances in technology and greater awareness among relevant government agencies has halved the costs and made available an additional US$3 billion each year to receiving families (Terry 2005, 11). The fact remains, however, that transaction costs are often too high and remitters are at the mercy of predatory institutions and individuals both at sending and receiving ends. Turning to the second issue of how to mobilize remittances to enhance development, it has been shown that there is significant developmental impact if there is an increase in the proportion of remittances that flow through formal financial systems (Terry 2005, 12). Yet what is clear is that government authorities (national, regional and local) in origin countries have often failed to create contexts which can lever remittances to achieve developmental goals.

•

4. Develop and Exchange Best Practices for the Implementation and Management of Bilateral Temporary Labour Migration Programs Non-permanent migration strategies can deliver significant development dividends to origin economies as well as destinations and the migrants themselves. However this benefit is not always delivered. Careful consideration needs to be given to developing circular migration systems which do not exploit the migrant and maximize the benefits to all concerned. Much of the controversy surrounding circular migration relates to low skilled workers. Undoubtedly there have been negative experiences associated with many such programs in the past within and outside the region. It is recommended here that consideration be given to establishing best practice models for labour migration and shared between APEC economies. Some of the elements that need to be considered in developing best practice models are the following: (a) Reducing the Transaction Costs of Migration. At present the transaction costs of migration in the Asia-Pacific, especially those of low skilled groups, are high and they constrain the extent to which migrants can deliver benefits to their home economy. The interests involved in the migration industry are many and it is a huge challenge to attempt to reduce those costs. Nevertheless those costs are a major brake on the potential for migration to assist in development of origin areas. (b) Protection of Migrant Workers. Ensuring that the basic rights of migrant workers are not violated. (c) Development of a Model Design for Bilateral Agreements to Foster the Temporary Movement of Lower Skilled Workers. Some APEC economies have been negotiating bilateral agreements for the temporary exchange of lower skilled workers, independently of FTAs. It would be helpful for APEC economies to examine these agreements and design Model Bilateral Agreements similar to the Model Measure on Temporary Entry for Business Persons for the temporary movement of skilled professionals and business

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persons within FTAs that is being elaborated by the APEC Group on Services and the CTI. (d) Establishing of Training Programs for Migrant Workers. A training component to the temporary stay of migrant workers would be a useful policy measure that could be jointly designed by both sending and recipient countries in APEC. For example, workers could receive instruction part time and gain hotel or hospitality management skills or skills in construction concurrently with their employment. They could earn a certificate for a higher level of skills, ultimately providing the opportunity for better employment in either the recipient country, or later, in their home country. Such training programs could also include orientation and placement, as well as the opportunity for language learning and/or computer skills. (e) Work Towards Developing Agreements on Pension Portability. Some countries in the Americas have signed agreements that begin to address the important issue of pension portability, although currently such agreements are limited to pension exports and complementation of contribution periods. This is, however, a critical area where ABAC, together with APEC member economies, could work together to discuss and design such agreements, with the long-term aim of allowing for full pension portability for workers in the region. 5. Consideration of ‘Development Friendly’ Migration Policies in Destinations The focus in the migration and development literature is largely on what Less Developed origin countries can do to enhance the contribution of their expatriates and migrant values to economic and social development at home. However, since higher income nations espouse a wish to encourage and facilitate the progress of less developed nations, it is important to ask whether there are some policies and programs relating to migration and the diaspora which can facilitate and enhance their positive developmental impacts in origin economies. In other words can destination economies make their immigration policies more ‘developmentally sensitive’? It needs to be made clear that a developmentally sensitive migration policy should not involve: • any loss of sovereignty and total control over who can enter or settle in a destination; • any sacrifice of the undoubted benefits of international migration to destinations economy, society and culture. However it needs to be considered whether effective policy can be developed which plays a positive role in development and poverty reduction at the origin but doesn’t compromise the interests of the destination. What are the sorts of policies at the destination end of south-north migration which could be considered? • Initially there is a need to bring the discourse of development into immigration policy which in most cases is still only considered in terms of self-interest, local labour markets, etc. There is a need to consider a ‘development friendly migration policy’.

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Demographic Change and International Labour Mobility in Asia-Pacific – Implications for Business and Regional Economic Integration: Synthesis

Remittances to home areas can be facilitated in a number of ways especially through reduction of transaction costs. • Return migration – both permanent and temporary can be encouraged through dual nationality and recognition that migrants have transnational loyalties. • Discuss the possibilities of providing support for enhancing human resources of origin economies for the expenses incurred by the State in the education of emigrants. This may be in the form of extra targeted development assistance. • Allow the portability of pensions and other entitlements. • Encourage migrants to maintain linkages with the home economy and encourage cultural and language maintenance. • The diaspora may be a vehicle for the delivering of effective development assistance. • Encourage the development of diaspora organizations. None of these possibilities have been fully investigated but what is clear is that initiation of at least some of them need not be at the expense of the integrity and impacts of destination country immigration policies. There should not always be a ‘loser’ from international migration. Accordingly it is recommended that APEC investigate what are the elements of a ‘development friendly immigration system’ and the types of policies which destination economies can consider to deliver development dividends to origin countries. This would include consideration of the role of development assistance agencies. •

6. Changing Perceptions of Migration in the Region One of the most important barriers to the development of a more effective and equitable international migration system in the APEC region and elsewhere are the inaccurate perceptions held and disseminated by policy makers, the media and the community generally about the significance and impact of migration. There is a widespread need for a more empirically informed discourse regarding migration to overcome such widespread misinformation which often leads to: • A failure to recognize that migration is a structural element in local economies and will be in the long term. • Stereotyping and scapegoating of migrants. • Discrimination and denial of migrants’ rights. • Unrealistic migration policies. An important task is to facilitate a more informed discourse about migration in the region. Business communities can play an important role in assisting in the development of migration friendly contexts in destination countries.

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Demographic Change and International Labour Mobility in Northeast Asia – Issues, Policies and Implications for Cooperation

Chapter 2 Demographic Change and International Labour Mobility in Northeast Asia – Issues, Policies and Implications for Cooperation Jai-Joon Hur

Introduction The initial economic model for migration is known to be the one developed by Lewis (1954) which was modified and enriched later by Fei and Ranis (1961) and then by Harris and Todaro (1970). In Lewis (1954) model of rural-urban migration, the economy is composed of two sectors: one is a traditional, rural subsistence sector held in extremely low marginal labour product, and the other is a modern urban industrial sector with high marginal labour product. People move from the subsistence sector to the industrial sector. Migration takes place because of the expansion of the capitalistic industrial sector and the earnings gaps between the two sectors. The process continues until the re-allocation of surplus labour of the subsistence sector to industry is complete. Fei and Ranis (1961) admit the possibility of a change of productivity and population growth in the agricultural sector which may lead to a postponement of the Lewis turning point. In Harris and Todaro (1970) model, migration proceeds, even if there is no surplus in the agricultural sector, in response to urban-rural differences in expected earnings, with the urban employment rate acting as an equilibrating force. These frameworks can be translated into the world economy with a group of high income countries on the one part and the other group of low income countries on the other. Migration takes place when the earnings gaps continue to exist between the high income group and the low income group. The high level of marginal labour product in the former and the low level of marginal labour product in the latter generate migration flows from the former. Therefore, as far as the earnings gaps persist between the two groups of countries, despite the existence of significant levels of unemployment in the high income countries, the forces of migratory flows continue to exist. However, discerning the determinants of international migration is more complex than calculating earnings gaps or forecasting demographics. There are other important factors which influence international migration flows: • Population: high growth rate of population generating surplus labour with limited job opportunity, and vice versa,

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•

Government policies: liberal or restrictive policy of labour receiving countries, promoting or neutral policy stance of sending countries, admission or restriction of migrants’ access to social protection, etc., • Technological progress: in particular, lowered travelling, transportation, and communication cost due to technological progress, • Socio-cultural factors: social unrest, a desire of migrants for escaping from traditional society which constrains a free development of personal aptitude, a desire for studying foreign culture, etc., • Natural or physical factors: natural disasters such as earthquake, flood, drought, etc. Some of these factors enforce and others complement economic factors. But economic factors seem to explain increasing international migratory flows as far as ‘temporary migration’ is concerned through such factors as labour market imbalances, trade liberalization in goods and services, the demand for and supply of education, etc. They impinge differently on migratory flows in different contexts. They include not only supply-push factors in labour sending countries and demand-pull factors in receiving countries, but also push-back factors in the latter and pull-back factors in the former. They also include studying abroad in pursuit of higher earnings and job opportunities as well as travel for business opportunities. During the last decade, the benefits of international labour mobility have been particularly emphasized among economies. Many free trade agreements have included commitments on movement of natural persons. However quite different policies in both labour receiving and sending economies have been applied to two different types of migration. One is the flow of low skilled workers and the other is skilled professionals and investors. Receiving countries are taking in general two asymmetric policy tracks. They are liberal toward inflows of professionals and investors, and restrictive toward low skilled workers. Labour is an abundant resource in low income economies. They want to liberalize the flow of labour so that their people can access better job opportunities. In contrast, low skilled workers are deemed to be substitutable for native workers in receiving countries. They want to strictly control the inflow volume of low skilled workers. Only fixed-term contracts tend to be permitted to prevent their permanent residence in receiving countries. The two asymmetric policy tracks of receiving countries can be understood via the following framework. If policy makers in receiving countries maintain the hypothesis that immigration policy should increase the national income of natives, the receiving country’s objective in setting immigration policy will be to maximize the immigration surplus net of the fiscal burden imposed by immigrants on native taxpayers. The optimal size and skill composition of the immigrant flow would equate the increase in the immigration surplus resulting from admitting one more immigrant to the marginal cost of the immigrant. Meanwhile, it is reasonable to suppose that the net fiscal costs of immigration are larger for low skilled immigrant flows. After all, low skilled immigrants are more likely to use many government services and pay lower taxes. In addition, there are economic reasons, arising mainly from the complementarity between

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Demographic Change and International Labour Mobility in Northeast Asia – Issues, Policies and Implications for Cooperation

capital and skills, that suggest that the immigration surplus might be larger when the immigration flow is composed exclusively of high skilled workers. It seems, therefore, that on purely efficiency grounds there is a strong economic case for an immigration policy that uses skill filters in awarding entry visas (Borjas 1995). Another explanation comes from the implications of the Harris and Todaro (1970) model that, when significant levels of unemployment continue to exist in receiving countries, with the persistence of earnings gap between the receiving and sending countries, an optimal policy for labour receiving country is a combination of wage subsidies (or direct government employment) and measures to restrict free migration. Northeast Asian Economies have very different demographic structures and a varied experience with international mobility as well as in migration policies. They show wide range population sizes. The national income level and the extent of industrialization are quite different from one economy to another. Huge earnings gaps exist between China and Mongolia, and other economies of the region. Thus Hong Kong, Chinese Taipei, Korea, and Japan are inviting migratory inflows while China and Mongolia generate net outflows. The objective of this paper is to make synthesis for six Northeast Asian economies (China, Japan, Korea, Chinese Taipei, Hong Kong and Mongolia), drawing on the case studies, each done by six countries’ authors (Yanbin Liu of China, Yasushi Iguchi of Japan, Jai-Joon Hur and Kyuyong Lee of Korea, KeJeng Lan of Chinese Taipei, Siu-lun Wong, Karkéta Moore and James K. Chin of Hong Kong, and Bolormaa Tsogtsaikhan of Mongolia) and previous studies. The topics to be covered include: • Demographics and demographic transition in the region • Magnitude, trends, and impacts of migration • Migration policies and practices • Bilateral and regional agreements and scope for cooperation This paper focuses on temporary international migration. Thus it excludes international migratory flows of permanent migrants and refugees, even though their numbers are considerable. Also discussions associated with migrant stock or diaspora will be restrained and minimized.

Demographic Transition Six Northeast Asian Economies (China, Japan, Korea, Chinese Taipei, Hong Kong and Mongolia) covered in this paper can be grouped into labour sending countries – China and Mongolia – and mainly receiving economies – Japan, Korea, Chinese Taipei, and Hong Kong. Table 2.1 shows the remittance flows as a percentage of GDP. Mongolia and China show net inflow of remittances which is related with their net outflows of migration flow. The six economies show a wide range in population size. Two extremes are Mongolia and China. Mongolia has only 2.6 million while China has 1.3 billion people. The other four economies are found in between. The number of inhabitants in Hong Kong and Chinese Taipei amount to 7.2 million and 22.8

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Jai-Joon Hur

million respectively. The population in Korea is in the order of 48.1 million, and that of Japan is 128.3 million. Even though the dominant element of labour mobility in China is internal rather than international, China is one of the great source of international migration and its impact on international migration flow is not negligible at all because its population size is immense. Table 2.1. Remittances, Percentage of GDP as of 2006 Outflow 0.11 0.08 0.48 n.a. 0.19 2.46

China Japan Korea Chinese Taipei Hong Kong Mongolia

Inflow 0.88 0.03 0.10 n.a. 0.16 5.81

Source: World Bank

Table 2.2 summarizes the demographic features of the past, present and future of the six economies in the region. Contemporary annual population growth rate ranges from -0.02 percent (Japan) to 1.4 percent (Mongolia) in 2007. The other economies show a population growth rate of from 0.3 percent to 1.0 percent per annum. They are experiencing ageing except for Mongolia and the speed of ageing is the fastest in Korea among the six economies (Figure 2.1). Their population is projected to record negative growth within next thirty years except for Hong Kong. Table 2.2. Population, Population Growth, TFR and Ageing Indices Country China Japan Korea Chinese Taipei Hong Kong Mongolia

Total Population (‘000) 2007 1,331,356 128,326 48,142 22,770 7,194 2,712

Population Growth Rate (%)

Total Fertility Rate

195055

197580

200510

202530

204550

197580

200510

202530

204550

Ageing Index 2007

1.9 1.4 2.5 n.a. 4.6 2.2

1.5 0.9 1.6 2.1 2.7 2.8

0.6 0.1 0.3 1.4 1.0 1.2

0.1 -0.4 -0.1 -1.8 0.6 0.7

-0.4 -0.5 -0.7 -5.1 0.2 0.1

3.3 1.8 2.8 2.6 2.3 6.6

1.7 1.4 1.2 n.a. 1.0 2.2

1.9 1.7 1.5 n.a. 1.9 1.9

1.9 1.9 1.8 n.a. 1.5 1.9

55.9 201.0 83.4 70.3 116.1 19.6

Working Population Age Aged 65+ Population 2007 2007 7.9 71.7 20.7 65.4 10.2 72.3 9.7 71.6 12.1 74.0 3.8 67.0

Note: Ageing index = Population aged 60+/Population 0-14. Source: UN, World Population Ageing 2007. The statistics on Chinese Taipei are from http://eng.dgbas.gov.tw/

Japan and Korea have a Total Fertility Rate as low as between 1.2 and 1.4. The Japanese population began to decline from 2005 and Korean population is

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Demographic Change and International Labour Mobility in Northeast Asia – Issues, Policies and Implications for Cooperation

expected to decline from 2019. Hong Kong has an even lower fertility rate below 1.0, but continuing in migration stops its population from declining and ageing. Mongolia has a falling fertility rate and the TFR was 2.1 in 2006. Its population pyramid is young with those aged 65 and over and working age population accounting for 4 percent and 61 percent of the total population respectively. Figure 2.1. Population Pyramids of Six Northeast Asian Economies (Unit: thousand persons) KOREA 2005

Age 100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4 2500

2000

1500

1000

100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4

FEMALES

500

0

KOREA 2040

Age

MALES

500

1000

1500

2000

2500

MALES

2500

2000

1500

1000

NUMBER OF PERSONS (Thousands)

6000

MALES

4000

2000

2000

4000

6000

6000

MALES

4000

2000

NUMBER OF PERSONS (Thousands)

80000

MALES

60000

40000

20000

20000

1000

1500

2000

2500

FEMALES

0

2000

4000

6000

CHINA 2040

Age 100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4

FEMALES

0

500

NUMBER OF PERSONS (Thousands)

CHINA 2005

Age 100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4

0

JAPAN 2040

Age 100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4

FEMALES

0

500

NUMBER OF PERSONS (Thousands)

JAPAN 2005

Age 100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4

FEMALES

40000

60000

80000

80000

NUMBER OF PERSONS (Thousands)

MALES

60000

40000

20000

FEMALES

0

20000

40000

60000

80000

NUMBER OF PERSONS (Thousands)

(continued)

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Jai-Joon Hur

(Figure 2.1 continued) Age

Age

MONGOLIA 2005

100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4

MALES

200

150

100

50

0

50

MONGOLIA 2040

100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4

FEMALES

100

150

MALES

200

200

150

100

NUMBER OF PERSONS (Thousands)

Age MALES

400

300

200

Age

0

100

200

300

MALES

400

400

300

200

CHINESE TAIPEI 2005

Age MALES

1200

800

400

400

100

150

200

200

300

400

FEMALES

100

0

100

CHINESE TAIPEI 2040

Age 100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4

FEMALES

0

50

NUMBER OF PERSONS (Thousands)

NUMBER OF PERSONS (Thousands)

100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4

0

HONGKONG 2040

100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4

FEMALES

100

50

NUMBER OF PERSONS (Thousands)

HONGKONG 2005

100+ 95 - 99 90 - 94 85 - 88 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4

FEMALES

800

1200

MALES

1200

800

NUMBER OF PERSONS (Thousands)

400

FEMALES

0

400

800

1200

NUMBER OF PERSONS (Thousands)

Source: United Nations

Magnitude, Sources and Destination of Migration Flows Receiving Countries Wong, Moore and Chin (2008) indicate that past immigration into Hong Kong has shaped the contemporary population size and composition. Hong Kong’s population was 2.2 million in the mid-1950s but almost doubled by 1971. Now its population is 7.2 million as of 2007. The increase is principally the result of immigration from mainland China and from Southeast Asia. The top three countries of immigrant origins apart from the mainland are the Philippines (142,640), Indonesia (85,240), and USA (32,340). Hur and Lee (2008) point out that the total number of foreign workers in Korea increased dramatically from 6,409 in 1987 to 539,886 in 2006. Of these, 5.1 percent were professionals, 2.0 percent of them were investors and

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Demographic Change and International Labour Mobility in Northeast Asia – Issues, Policies and Implications for Cooperation

executives and most of the remainder are of low and semi-skilled occupations. Some 53.6 percent of them were 82,965 Koreans of foreign nationality from China, Russia and CIS, and low skilled workers from Vietnam (15,035), the Philippines (14,574), Thailand (13,268), Mongolia (9,636), Indonesia (5,935) were also significant. Thirty percent of the foreign writers are undocumented. Iguchi (2008) estimates that Japan employed 260,000 foreign workers in 1990. The stock of foreign workers increased to 620,000 in 1995 and then to 930,000 in 2006. Japanese descendents of foreign nationality explains about twenty-five percent of them. Principal sources of immigrants are Korea, Chinese Taipei, USA, China, Hong Kong, and Southeast Asian countries especially the Philippines, Thailand, Singapore, and Malaysia. Lan (2008) explains that the actual number of low-skilled foreign workers hired in Chinese Taipei amounted to 357,937 persons in 2007. The Philippines, Thailand, Indonesia, Malaysia, Vietnam and Mongolia are the designated origin countries of non-professional migrant workers. Liu (2008), at the beginning of this century, the number of foreign experts working in China amounted to 250,000 without counting 190,000 persons from Hong Kong, Macao and Chinese Taipei. In 2007 it added up to more than one million people from more than 50 economies. Some 124,000 non-professionals have to be added to this number.

Sending Countries China has been, and continues to be, one of the great sources of international migration. The Overseas Chinese Affairs Commission estimates that there were more than 35 million ethnic Chinese are living outside of China in 2002, representing 2.5 percent of the total population in mainland China that presently exceeds 1.3 billion. Twenty-seven million live in Southeast Asia, four and half million in North America, and a million each in Peru and Russia (Lucas 2005). The majority of the overseas Chinese are from the three southern coastal provinces of Guangdong, Fujian, and Zhejiang. Though the overseas Chinese must not be confused with Chinese migration, because many of them were born outside China in the lands chosen by their parents and grandparents, there is also evidence that recent emigration from China has been significant. The 35 million estimate of overseas Chinese increased from around 22 million in 1985, and from 12.7 million in the early 1960s. Given the generally low fertility of overseas Chinese populations, this suggests a significant role for migration from China (including Hong Kong and Chinese Taipei) over the second half of the 20th century (Skeldon 2004). China sends out migrant workers in the form of project workers within the framework of its overseas aid programs. The Chinese government has sent a significant number of workers to developing countries such as Tanzania and Bangladesh to help in the development of their infrastructure. During the 1980s China gradually reduced its overseas aid, state-owned companies that were originally involved in overseas aid started conducting commercial undertakings overseas (Biao 2003). Liu (2008) indicates that China, as a sending country,

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Jai-Joon Hur

sent a total of 3.4 million workers abroad mainly via project engineering and labour cooperation abroad during the past decade. Tsogtsaikhan (2008) shows that approximately 130,000 people out of 2.6 million Mongolians, in other words 5 percent of the Mongolian population, are residing abroad, of which around 30,000 are in Korea and 2,500 people are in Japan and China respectively.

Trends in Labour Migration Cross-border labour mobility in the Northeast Asian region has increased dramatically during the last two decades. In particular, Chinese and Mongolians have significantly increased their international labour mobility. The World Bank (2006a) estimates that the number of migrants more than doubled in most net labour receiving countries in the 1980s and 1990s with some two million foreign workers employed in Northeast Asia. Migration flows in the region in the postwar period were frequently politically determined. For example, Chinese migrants moved to Hong Kong mainly for political reasons or for family reunion during the 1950s. As a result, Wong, Moore and Chin (2008) report that Hong Kong’s population rose from 600,000 in 1945 to 2.2 million by the mid-1950s. Also, according to Hur and Lee (2008), after Korea regained its independence in 1945, overseas Koreans streamed back into their home country in large numbers. Contemporary migration is increasingly an economic phenomenon. The six economies in Northeast Asia were traditionally net sending countries but four of them – Japan, Korea, Chinese Taipei, Hong Kong – became recipient countries two decades ago, after a period of sustained growth. Mainland China and Mongolia remain net sending economies. The recipient countries admit non-professional workers under restrictive regulations and this temporary migration has become an increasingly salient feature of the four economies. However, Korea and Japan have also reflected a considerable influx of ethnic Koreans and Japanese of foreign nationality among their migrant workers. In Korea 30 percent of migrant workers are foreign-born Korean descendants. In Japan the number of ethnic Japanese of foreign nationality was a similar proportion with 241,325 persons among a total of around 930,000 foreign workers. Wong, Moore and Chin (2008) point out that historically, having domestic help used to be one of the most significant status symbols in Hong Kong, but recently it became more of a necessity for middle-class families with children. The relatively high wages of Hong Kong’s middle class women allowed them to employ domestic helpers. The authors report that a similar trend has been observed throughout the region, for example, in Singapore, Chinese Taipei, and Japan. Foreign domestic helpers started to enter Hong Kong under the ‘Supplementary Labour Scheme’ in the 1980s. Lan (2008) indicates that the cross-border movement of professionals has increased in Chinese Taipei with deepening globalization. In addition, Chinese Taipei has become an important destination for low skilled workers.

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Demographic Change and International Labour Mobility in Northeast Asia – Issues, Policies and Implications for Cooperation

The demand for education has created significant migratory flows in the region. The numbers of students moving to traditional immigration countries (USA, Canada, Australia, New Zealand) from Asia has increased exponentially in recent years. The Chinese Academy of Sciences Report estimated that one million Chinese students had left to study abroad in the two decades to 2006 (Asian Migration News, 1-15 February 2007). In 2007 over 0.34 million Koreans were staying abroad. Not only outward but also inward flow of students is increasing however. Korea experienced an annual growth rate of 28 percent in student inflows during the last ten years from 1,821 in 1996 to 29,557 persons in 2006.

Impacts of Labour Migration Effects of Remittances in Sending Countries Remittances, if they are not large enough to bring economic instability such as an over-evaluation of the national currency, generally generate positive effects in labour sending countries. Remittances improve the balance of payments of sending countries which otherwise usually record significant deficits. Remittances are a more reliable, and often provide a larger, source of development funds for labour sending countries than foreign development aid. Table 2.3 relates remittances to the value of total exports, imports and GDP in five Northeast Asian economies. Remittances are generally small in relation to GDP in each of the countries except Mongolia. In relation to export earnings, remittances in China and Mongolia exceed 2 percent, contributing to the balance of payments. Table 2.3. Remittances with Respect to Exports, Imports and GDP, as of 2006 (Unit: US$ million) Remittances China

Inflow Outflow

23,319 3,025

Japan

Inflow Outflow

1,380 3,476

Korea

Inflow Outflow

918 4,244

Hong Kong

Inflow Outflow

297 365

Mongolia

Inflow Outflow

182 77 n.a.

Chinese Taipei

Exports 1,060,357 2.20% 0.29% 769,550 0.18% 0.45% 375,850 0.24% 1.13% 394,952 0.08% 0.09% 2,026 8.98% 3.80% 252,520

Imports 891,788 2.61% 0.34% 143,991 0.96% 2.41% 379,170 0.24% 1.12% 372,287 0.08% 0.10% 2,000 9.10% 3.85% 235,562

GDP 2,644,681 0.88% 0.11% 4,368,435 0.03% 0.08% 888,024 0.10% 0.48% 189,799 0.16% 0.19% 3,132 5.81% 2.46% 365,492

Source: Remittances and GDP from World Bank, and Exports and Imports from WTO. GDP of Chinese Taipei is also from WTO.

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The remittances from overseas employment contributed significantly to the Korean economy until 1970s by enhancing national foreign exchange earnings and ameliorating deficits in the balance of payments. Ethnic Koreans in China are concentrated in Heilongjiang and Jilin province. It is reported that the remittances from Korean-Chinese working in Korea contributed to boosting of the local economy. Tsogtsaikhan (2008) indicates that remittances made an important contribution to families, communities and the economy in Mongolia. Almost all Mongolians abroad send money home. A great deal is spent for consumption purposes or loan repayments, rather than investment. Also a considerable portion is invested in education and training: 23.4 percent of remittances from Korea are found to be invested in education and training.

Information, Ideas and Linkages for Economic Expansion Apart from remittances, migrants, particularly those based in OECD countries, influences the economy of home nation in several ways. They provide bridgeheads so that the home country can expand economic linkages with the destination. Skilled migrants and diaspora networks transmit information and ideas both formally and informally. Sending countries can take advantage of return migration, or ‘reverse brain drain’. Returned scientists or engineers or businessmen interact with their old colleagues, for example in the Unites States, and facilitate knowledge transfer and business cooperation. The ethnic linkages and information flows from Silicon Valley have had a considerable impact on the development of information technology in Chinese Taipei (Saxenian 2000). Linkages of the Chinese diaspora to their homeland are reported to explain more than 30 percent of international trade in China. Korean-Americans in New York, Washington DC, and Los Angeles and San Francisco have provided an effective bridgehead for Korean manufacturing goods into the United States as well as a direct market for Korean goods. In 1970s and 1980s, many returned scientists have concentrated in national institutes such as the Korea Institute of Science and Technology, the Korea Development Institute and developed intellectual hubs and diffused knowledge and ideas to the whole nation (Hur and Lee 2008).

Employment and Wage Effects in Receiving Countries Hur and Lee (2008) report that migrant workers, as a whole, complement national workers engaged in the same industry, while the replacement effect of national workers is insignificant. The labour cost of foreign workers was deemed not to be significantly cost-saving compared with that of national workers because communication barriers stemming from differences in language and culture raise the management cost of workers. Nonetheless, local businesses continue to hire foreign workers because it is difficult for them to find Korean workers who are willing to work in lower income and status areas. Judging from this, foreign workers do not seem to displace Korean workers, at least in the manufacturing sector. Labour shortages rather than low labour cost

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is the dominant factor encouraging migration. Meanwhile, Korean descendants with foreign nationality, who enter the country through the Working Visit Scheme, are reported to compete with Korean nationals for jobs and exert downward pressure on wages in the restaurant and construction industries. Japan, unlike most other OECD economies, has resisted using migration to counterbalance the effects of low fertility and ageing which have seen the numbers of Japanese in the working age groups decline in recent years. They have attracted the descendants of former Japanese immigrants in Latin America and also used a trainee scheme to bring in low skilled migrant workers. There also has been a limited intake of highly skilled workers. In general Japan remains opposed to immigration on cultural homogeneity grounds despite the economic imperative. As a result there has been a substantial movement of undocumented workers.

Social Effects The economic and social mobility of migrants in Northeast Asia are limited. They tend to be marginalized and experience feelings of marginality and alienation. Government and NGOs have made some efforts to help the new immigrants to adjust to local conditions and provide them with family and community services. However, despite considerable investment, the social support networks do not match the need of the rapidly increasing immigrant population. These social impacts are reported among migrants from mainland China to Hong Kong (Wong, Moore and Chin 2008), and North Korean newcomers in Korea (Hur and Lee 2008). In Hong Kong there has been growing unemployment since the late 1990s so foreign domestic helpers have begun to be seen as potential competitors to local women who have begun to enter domestic labour market as part-time workers. Iguchi (2008) reports that the working conditions and the coverage by social security of foreign workers in Japan have not improved. The coverage by social insurance of foreigners is far from complete in construction industry in Korea (Hur and Lee 2008).

Policies Relating to Labour Migration Migratory Forces and Migration Policies Many factors influence people to move: earnings gaps, employment and business opportunities, education, etc. However, labour shortage and surplus, or the gaps in earnings or business opportunities between high income countries and low income countries do not generate automatically migration flows. Government policies affect the pattern of migration and in receiving countries, in particular, government policies are crucial influences on inward migration. Likewise, movements of workers from labour surplus countries to other countries can shift dramatically with changes in institutional arrangements. For example, countries experiencing labour shortage may adopt an option, instead of inviting foreign guest workers, to expand the domestic labour supply

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by raising labour participation rates. When the Korean economy experienced a severe shortage of production workers during the unprecedented boom which started in 1987, policy makers first pursued a strategy of increasing participation rates. Until 1992 no proactive measure was made by the government to invite guest workers. Inward migrant workers were only those skilled workers who could obtain an employment visa or undocumented workers. It was in 1993 that Korea began to invite foreign workers by introducing industrial trainee scheme. Sustained economic growth and subsequent increase of job opportunities are the most effective factor which influence return migration. However, it is well known that the active recruitment activities of the governments of Chinese Taipei and Korea since 1970s have led to many scientists and engineers to return (Chang 1992, Yoon 1992). In 1978 China adopted an economic open door policy and subsequently the government relaxed mobility control over Chinese citizens. In 1979, border police of Hong Kong apprehended about 200 illegal immigrants every day and the total number of new immigrants to Hong Kong reached more than 100,000 people. Also it was only after 1978 that contract-based labour outflow, so-called market-oriented migration, began to increase in China. Migration policies and practices vary among countries. Recently many countries have undertaken active promotion initiatives and adjusted their infrastructure to increase the inflow of professionals. Though labour migration policies and practices are difficult to evaluate, the policies of each individual economy in the region are summarised in Table 2.4. If practices were taken into consideration, only Hong Kong would be classified as actively promoting the inflow of professionals. Table 2.4. Summary of Government Policies Towards Labour Migration Country China Japan Korea Chinese Taipei Hong Kong Mongolia

Outflows Passive Active Policy Intervention O O O O O O

Inflows of Professionals Passive Active Policy Promotion O O O O O O

Inflows of Low-Skilled Passive Active Policy Management O O O O O O

Policies of Receiving Countries Receiving economies are concerned about the impact of foreign workers on their labour market as well as other social costs such as social protection cost, and the cost of social infrastructure. As a result they tend to control the volume and the source of migrants. Controlling inflows of low skilled workers Job preferences of labour market entrants change as a country develops, domestic employment opportunities improve and wages rise. Continuing

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economic development eventually encourages local people to eschew dirty, dangerous and demanding jobs resulting in labour shortages. The country then needs to attract foreign workers to meet domestic labour demands. In Northeast Asia this process has involved highly restrictive regulations on migrant workers. The practices of individual economies are as follows. Chinese Taipei In the 1980s in Chinese Taipei labour shortages prevailed due to a substantial appreciation of the local currency (New Taiwan Dollars) and changes in native workers’ work attitudes. Hence the number of foreign workers increased significantly in Chinese Taipei. The government developed specific policies on the management of temporary migration. The Employment Services Act which was enacted in 1992 regulated temporary labour migration including both low skilled and high skilled foreign workers. Any foreign worker without permanent residency has to obtain, if she/he wishes to work in Chinese Taipei, an employment permit before she/he comes to Chinese Taipei. The employment permit has to be applied for by an employer. The employers in construction, manufacturing, fishery, and social, personal and related community services are allowed to hire low-skilled foreign workers At the beginning of hiring low-skilled foreign workers, the Philippines, Thailand, Indonesia and Malaysia were designated as source countries of lowskilled foreign workers. Vietnam was included in 1999 and Mongolia in 2004. China has never been included as a designated source country due to political and economic considerations (Lan 2008). Even though an explicit quota has not been imposed on the number of hired workers, the notion of an implicit quota has existed concerning low-skilled foreign workers. It was 30,000 in 1991 and increased to 320,000 persons by 2005. A levy, named the ‘Employment Stabilization Fee’ is charged to employers hiring foreign workers. The Fee varies from NT$600 to 10,000 per month. The money collected is used for training the unemployed, improving the employment services, and helping in the adaptation of foreign workers (Lan 2008). Korea In Korea local businesses which fail to find national workers may legally employ an appropriate number of foreign workers. Before arriving in Korea, foreign workers seeking access to the country via Employment Permit Scheme must enter into employment contracts with local employers. They are subsequently issued non-professional employment visas which permit employment in low skilled jobs. Foreign workers may be employed for a period not exceeding 3 years at firms with less than 300 employees, in manufacturing, agricultural/livestock farming, or the coastal/inshore fishing industry. The Joint Committee for Migrant Workers in Korea determines the quota, the industries which can receive migrant workers, and origin countries for the Employment Permit Scheme. The quota is determined every year by the Committee, depending on labour market conditions.

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Employers of businesses or workplaces hiring a migrant worker must subscribe to either the Departure Guarantee Insurance or the Trust for Lumpsum Payment on Departure, with the migrant worker as the beneficiary. This is a measure to relieve the burden from SMEs of having to pay a lump-sum retirement allowance while at the same time encouraging the departure of migrant workers once their visas expire. Migrant workers, for their part, must subscribe to the Return Cost Insurance or Trust to finance their return. As a safeguard against delayed payment of wages to migrant workers, employers are required to purchase Wage Claim Guarantee Insurance. In principle, workers are expected to work in the designated firms they originally concluded an employment contract with (Hur and Lee 2008). Hong Kong Labour migrants in Hong Kong are primarily, but not exclusively, domestic helpers. Low waged contract workers from South East Asia migrated to Hong Kong in large numbers for short-term contracts after restrictions on Chinese migrants were imposed in 1980. Foreign domestic helpers started to enter Hong Kong under the Supplementary Labour Scheme in the 1980s (Wong, Moore and Chin 2008). The Scheme imposed restrictive rules that applied exclusively to domestic helpers. First, foreign domestic helpers do not have the right to remain in Hong Kong indefinitely and their stay is completely dependent on their work. Second, they are bound to work for a specific employer and they are not allowed to find any other kind of work. Third, they can never gain residency in Hong Kong or bring their dependents. While they can apply for an extension of their contract, they are seen as temporary migrants, not eligible for permanent residency, and they are expected to return eventually to their home country. The so-called ‘twoweek rule’ under Hong Kong’s immigration policy instituted in 1987, prohibits foreign domestic helpers from seeking employment or remaining in Hong Kong for more than two weeks after the expiration of their employment contract (Wong, Moore and Chin 2008). Mongolia In Mongolia, license holders, entitled by the ‘Law on Sending Labour Force Abroad and Receiving Labour Force and Specialists from Abroad’, are permitted to receive high skilled workers and specialists on the basis of an agreement with a foreign legal entity. They must obtain preliminary permission from state central administrative organization or its agencies. There is a quota of a limited number of workers and specialists who can be received from abroad within each year. The quota is set up by the government based on the number of employees and financial resources each sector of economic activity possesses. License holders pay on a monthly basis an amount for recruiting foreign workers which is equal to two times the minimum wage. This workplace payment was introduced for the purpose of protecting the domestic labour market, and the accumulated fund is being utilized for domestic employment promotion activities and measures (Tsogtsaikhan 2008).

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Japan and China Since 1988, the Japanese Government has adopted different policy stances regarding professionals versus low-skilled workers: active recruitment policies for the former and carefully managed restrictive policies for the latter. Japan does not have any explicit guest worker program like Korea or Chinese Taipei. It has quite different channels of low skilled labour migration: i) former Japanese emigrants and their descendents as well as their spouses, ii) technical trainees off the job or on the job under the rotation principle, iii) privatelyfinanced foreign students engaged in part-time work (max. 28 hours per week) while studying at campus so as to finance their tuition and cost of living in Japan, and iv) foreign students performing undesignated activities and undocumented workers (Iguchi 2008). In China, dependants of employment visa holders are not entitled to obtain a work permit (Liu 2008). China has over 1.3 billion people with 56 different ethnic groups, and traditionally it has been a melting pot of various cultures and people. Though China has been one of the great sources of international migrants, so much so that Chinese people live in virtually every country of the world today, the labour mobility of Chinese is dominantly internal rather than international. On top of the existing 103 million urban migrants, Chinese cities will face an influx of another 243 million migrants by 2025. Controlling migration from the Chinese mainland to Hong Kong: the 1 OWP Scheme and the Scheme for Mainland Talents and Professionals Immigration from the Chinese mainland has been crucial for Hong Kong’s economic development as well as for its demographic growth. Legal instruments had to be put in place to allow new arrivals from the Mainland to settle in Hong Kong. The most important among them was the OWP Scheme. It was introduced in the 1950s. The OWP Scheme empowered the Chinese government to regulate the size of Mainland Chinese outflow to Hong Kong by issuing them One Way Permits. Since the 1980s, it has been the main instrument that facilitated the reunion of Chinese families divided by the Hong Kong border. It continued to closely monitor the number of new immigrants from the Chinese mainland after reunification with China in 1997, even though it does not have any control over their selection (Wong, Moore and Chin 2008). The first quota of 75 new arrivals per day in 1982 was increased to 105 in 1993 and subsequently to 150 in 1995, or some 55,000 a year. While the quota 0

1

The Hong Kong’s ‘One Way Permit Scheme’ and the Scheme for Mainland Talents and Professionals are respectively very unique to be mingled with other policy items treated in this paper. They are migration control instrument which can be introduced in special economy like Hong Kong. Meanwhile they are important policy initiatives for understanding Hong Kong’s migration issue. Meanwhile, it does not seem appropriate to explain the OWP Scheme under the title of ‘receiving country’s policy for controlling low-skilled workers,’ because OWP Scheme has been a legal immigration instrument for Hong Kong from the Chinese mainland. Therefore, I put Hong Kong’s OWP Scheme under an independent title, together with the predecessors of the Scheme for Mainland Talents and Professionals.

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remains unchanged, preference was given to younger mainland children as they may have better chance of integrating into Hong Kong society. Academic studies showed that children who entered Hong Kong by the age of nine do as well academically as local-born children. Currently 40 percent out of the quota of 150 are reserved for mainland children. The importance of the Scheme for Hong Kong’s future development was acknowledged by the Report on the Task Force on Population Policy (2003), which stated that the OWP has been an ‘immigration policy that continues to shape Hong Kong’s demographic growth and composition.’ From 1983 to 2001, there were 724,259 new arrivals from the Mainland admitted to Hong Kong under the OWP Scheme. Between 1997 and 2001, they contributed some 93 percent of overall population growth. The Report also predicted that the OWP Scheme would continue to be a main source of population growth in the future (Wong, Moore and Chin 2008). Though Hong Kong made several cautious moves towards opening doors to Mainland professionals in the quest for talent and skills, the admission schemes for Mainlanders were usually much more restrictive than those for foreign professionals in Hong Kong. The first scheme was introduced by the British colonial government in 1994 and intended to be a limited extension to the entry policy for overseas professionals who possessed skills, knowledge or experience needed in Hong Kong, but lacking in the local population. It provided for an employment quota of 1,000 Chinese nationals in professional and managerial vacancies in companies in Hong Kong, other than Chinese state owned enterprises. The requirements set by the first Scheme was very restrictive such as restrictions on bringing dependants and eligibility being limited to graduates of only 36 key mainland tertiary institutions with relevant working experience. This pilot scheme was abandoned in 1997 when Hong Kong returned to Chinese sovereignty. Over those three years (i.e. 1994-1997), 3,129 applications were received for the 1,000 quota spots per year, but only 560 of them were approved (Wong, Moore and Chin 2008). The second scheme, the Admission of Talent Scheme, introduced in December 1999, could hardly meet the growing demand for Mainland professionals as it has recorded only 256 successful applicants in three years (Wong, Moore and Chin 2008). The third programme was the Admission of Mainland Professionals Scheme, launched in June 2001, and was even more limited than its unsuccessful predecessors. It was confined to the sectors of information technology and financial services, and, again, successful applicants were not allowed to bring their dependants. The number of successful candidates stood at 242 for second half of the 2001 and 211 for 2002 (Wong, Moore and Chin 2008). The Scheme was abolished on 15 July 2003 and replaced by a fourth scheme, namely the Scheme for Mainland Talents and Professionals, to enlarge the pool of talent needed to meet the requirements of a knowledge-based economy and enhance the competitiveness of Hong Kong’s demographic structure (Wong, Moore and Chin 2008).

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Attracting professionals and investors Remittances contribute to sending countries which have balance of payment deficits and lack of foreign currency. Meanwhile, there has been a concern about the costs of loss of skilled workers. Skill or human capital is a scarce resource in developing countries and the net migration flow of skilled workers and professionals from developing countries to high income countries can affect the economic development of the former adversely. Decision makers in receiving countries wishing to increase national income consider that low skilled workers demand more government services and pay lower taxes than professionals and investors. Thus, receiving countries adopt liberal policies toward professionals and investors while maintaining restrictive policies toward low skilled workers, thinking that the more the immigration flow is composed of high skilled workers, the larger the surplus from immigration is. The Hong Kong job market has always been open to foreign professionals, its sound and transparent legal system as well as multi-cultural and multilingual ambiance contributing to attracting professionals. Under the General Employment Policy, foreign residents could apply for a work permit as well as a residence permit. About 16,700 skilled migrants were admitted to Hong Kong each year between 1997 and 2001, rising to 18,000 by 1 July 2003. Work permits were also granted to the dependents of foreign professionals (Wong, Moore and Chin 2008). Before 15 July 2003, the openness of Hong Kong’s job market for foreign professionals left one exception, Mainland Chinese. In the year 2003, however, the Scheme for Mainland Talents and Professionals replaced its restrictive predecessors. It is quota-free and non-sector specific and restrictions on the admission of dependent family members were lifted. The number of talents and professionals to be admitted under the Scheme will be regulated only by demand in the local human resources market. Apart from business talent, Hong Kong also strove to attract Mainland talent from other fields, such as the arts and sports, while the Hong Kong government has pledged to promote social integration of the new arrivals (Wong, Moore and Chin 2008). Hong Kong companies may directly recruit candidates for employment that cannot be readily taken up by the local work force. Eligible candidates are required to possess a good educational background or technical qualifications. Successful applicants will be granted an entry permit for employment with an initial stay of 12 months, which may be extended shortly before it expires. The extension will normally follow the 2-2-3 years pattern, or be in accordance with the duration of the employment contract. Upon completion of 7 years the candidate will be eligible for the right of abode in Hong Kong. In 2006, according to the Hong Kong Immigration Department, 5,656 applicants were accepted to Hong Kong based on the Scheme and between January and September 2007 another 4,952 Mainland professionals entered Hong Kong owing to the Scheme (Wong, Moore and Chin 2008). The Capital Investment Entrant Scheme (CIES) of Hong Kong, implemented in October 2003, aimed to facilitate residence for capital investment entrants, i.e.

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persons who make capital investment in Hong Kong of at least HK$6.5 million but would not be engaged in the running of any business. The entrants would be allowed to make their choice of investment among permissible assets without the need to establish or join in a business (Wong, Moore and Chin 2008). The Korean government provides preferential measures to facilitate the entry and departure of professionals and investors by issuing special multiple visas (GOLD card, IT card, SCIENCE card). Professionals in science and business executives are conferred permanent residency, irrespective of their period of stay, which is equivalent to allowing employment-based permanent immigration. High skilled foreign students are allowed to seek part-time employment (20 hours per week) so that they are provided with an opportunity to be integrated into the domestic labour market while still studying. Chinese Taipei has changed its administration process in permitting the recruitment of professionals by enacting the Employment Services Act in 1992 for regulating the hiring of foreign professionals. Traditionally application services for hiring foreign professional workers were managed by relevant authorities in the central government in Chinese Taipei. Since January 14, 2004, the Council of Labour Affairs compared one-stop shop services, providing all services to those who apply for hiring foreign professionals (Lan 2008). Japan also has a privileged scheme for professionals. In Japan, foreign students who have studied and got degrees at universities in Japan can adjust their status for studying to status for working. This has helped Japanese companies to hire foreign highly skilled workers (Iguchi 2008). Attracting back professionals or encouraging ‘reverse brain drain’ has been another important aspect of migration policies of Northeast Asian economies. For example, Korea and Chinese Taipei, among Asian countries have actively recruited talented expatriate scientists in the United States. Between 1971 an 1985, more than 80 percent of students from Chinese Taipei who completed their study in the United States failed to return. Since then the government of Chinese Taipei has encouraged their brains in the United States to return and contribute to national development. The government set up the National Youth Commission (NYC), a cabinet-level government office, to recruit Chinese Taipei scholars abroad. Chinese Taipei’s overseas hi-tech experts were attracted by competitive salaries and working condition, better housing facilities, and assistance for schooling their children. The National Development Conference was held every year at the government’s expense for overseas scholars to participate. For overseas professionals in science and engineering who wished to establish a business in Taiwan and import new technology, the NYC provided assistance in obtaining loans, production locations, and facilities. Visiting professor and expert programs were introduced to induce overseas scholars to teach or work in Chinese Taipei for a short period (Chang 1992). In the 1970s and 1980s, the Korean government invited talented expatriate scientists and engineers abroad to be a part of the nation’s development vision and provided them with exceptional monetary incentives, housing and other privileges if they returned. The returnees concentrated in the national institutes and universities, diffusing knowledge and ideas to policy makers as well as to

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the society generally. Sometimes high post government jobs were offered to them (Hur and Lee 2008). Two thirds of students from China who leave to study abroad are reported to remain after graduation (Asian Migration News, 1-15 February 2007). It is estimated that there are more than 300,000 talented Chinese emigrants working abroad in high value added industries, according to the Chinese Academy of Social Sciences’ 2007 Blue Book on Global Politics and Security. China is fostering programs and has put in place a number of programs to induce skilled and talented professionals to return and counteract the former brain drain (Zweig 2006, Jiao 2007). It is since early 1990s that the Chinese government has changed its stance from preventing students from overstaying overseas to encouraging students to return regardless of when the return occurred. The focal point in interacting with returned overseas students is the Return Overseas Students (Scholars) Service Centre, a branch of Ministry of Personnel. Different government departments have made substantial efforts to attract returnees, such as high salaries, beneficial tax rates, special business loans, housing subsidies, subsidies for children’s education, and so on. Enterprises in Returned Overseas Students Industry Parks (huiguo liuxuesheng chuangye yuanqu) offer excellent facilities and a series of beneficial policies to returnees. There are now more than 40 such parks in China (Biao 2003). The Chinese government encourages both permanent and temporary return and, as a result, it is possible that the migrants can maintain professional and/or business affiliations in both China and overseas and move back and forth regularly. At the end of 2000, the Ministry of Foreign Affairs decided to issue Long-term Multiple Entry Visas to Overseas Chinese Students and Professionals to facilitate the returnees’ ‘re-migration’. In 2001, the Bureau of Public Security in Shanghai designated Z and D visas to enable overseas Chinese professionals with foreign passports to enter China anytime within a period of three to five years. These policies are deemed to be highly successful. By the end of 2000, returned overseas students had set up more than 4,000 high-technology companies in mainland China, with a total annual revenue of RMB 10 billion or US$1.25 billion (Biao 2003). Controlling undocumented workers Undocumented workers are those who overstay their visas or work permits, perform undesignated activities or enter a country illegally to work. They make up a sizable component of migrant workers in Asia. Iguchi (2008) estimates the number of undocumented foreign workers in Japan to be around 200,000 or 21 percent of the total number of Japanese migrant workers. The number of overstaying undocumented workers in 2006 was 211,988 or 39.3 percent of the total foreign workers in Korea. Before the legalization initiative of 2003, 66.5 percent of migrant workers in Korea were undocumented (Hur and Lee 2008). As of 2005, over 130,000 Mongolian citizens are reported to study or work abroad, the majority of whom are undocumented (Tsogtsaikhan 2008).

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Huge gaps between nations in earnings and employment opportunities and highly restrictive migration policies lie behind the large number of undocumented workers. One extreme example was the scandal of ‘two-bullets tours’ or ‘travel packages to Hong Kong prisons’ by Vietnamese in 2004. Migrants from Vietnam carried a knife and two bullets with them in order to be prosecuted and imprisoned for a violation of Hong Kong laws instead of being repatriated if caught by police. They entered Mainland China legally with their Vietnamese passports and then were given a knife and two bullets and sent on their way to Hong Kong. It was revealed that the lengthy prison sentence was not seen as a deterrence, but rather as a goal for these migrants - it guaranteed them free meals, medical treatment and shelter as well as an opportunity to repay the smuggling fees from their prison wages of HK$400 per month (Wong, Moore and Chin 2008). The phenomenon of undocumented workers is a reflection of the difficulties of legal entry into the destination countries and the absence of channels through which undocumented workers could legalize their stay. When there was the third large migration wave from China to Hong Kong in 1970s, the Hong Kong governments responded to the growing number of Chinese immigrants by toughening regulations on legal migration in 1974. At the same time, a ‘touch base’ policy was implemented, which provided a channel through which illegal entrants could legalize their stay. If they managed to evade immigration control in border areas and reached the urban area of Hong Kong they were granted permission to stay. Prior to 1980, Chinese immigrants who entered Hong Kong illegally were allowed to legalize their stay through this ‘touch base’ policy. In 1980, the touch base policy was abolished. Since then, immigration policies started to develop into a highly institutionalized and restrictive system, which remains in place today. Today, many migrants enter Hong Kong legally, but fall into the category of illegal immigrants by overstaying their visa (Wong, Moore and Chin 2008). The problem of undocumented workers is a significant political and social issue in host countries because of perceived social costs and security risks. Deterrent measures include forced departure or repatriation, fines and imprisonment, as well as punishments for employers of undocumented workers. On the other side, host countries introduce occasionally, as a way of integration to the society, channels through which a selected group of irregular workers could legalize their stay. The National Police Agency of Japan maintains dialogue with the Department of Police of the People’s Republic of China to share information on international crimes. The police agencies of some local governments in Japan also have a direct exchange of information with the police of provincial governments in China on human smuggling (Iguchi 2008), which shows that the Chinese Government also is taking active measures to stem irregular migration. The Hong Kong Government maintains close contact with the Chinese Mainland Government and other overseas governments on issues of population mobility and human trafficking. In its 2006 Annual Report, it listed governmental participation in eight regional meetings in 2006 on topics of

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immigration intelligence, airline networking, refugees in the Asia-Pacific region, human trafficking, passport policies, and cross-border police cooperation against illegal immigration (Wong, Moore and Chin 2008).

Policies of Sending Countries Sending economies conclude MOUs with receiving countries to send their workers. They manage the volume and direction of outflows, select and train labour migrants, and protect their rights and welfare. Managing the volume and direction of labour outflows Some countries encourage proactively emigration to alleviate domestic unemployment or underemployment pressures, promote foreign exchange earnings and to counteract balance of payment deficits. Some governments encourage their native workers to access jobs in high income countries as an alternative way of skills acquisition. Other governments leave labour migration to market forces and individual decisions. As technological progress has resulted in lower transportation and information access costs, it has become far more difficult than before for economies to discourage the emigration of professional workers. In effect, sustained economic growth creates employment and business opportunities as well as wage increase. Thus the most effective incentive for return migration is economic growth in origin countries. Efforts to discourage emigration include prohibition of dual citizenship. Efforts to encourage return migration include offer of dual citizenship, and special treatment for returnees. Korea has long prohibited dual citizenship and managed the system very strictly. According to Korea’s Nationality Act of 1997 a foreign-born Korean has to decide her or his citizenship before she or he becomes 20 years old. When a Korean obtains foreign citizenship, her or his Korean nationality will be lost automatically in two years if she or he is over 22 years old. Once a foreigner has obtained Korean citizenship it will be lost if she or he does not give up the old citizenship. After the foundation of the People’s Republic of China in 1949, Chinese who emigrated spontaneously were seen as betraying the socialist ideology. However the creation of four Special Economic Zone in 1979, and the opening of 14 coastal cities to overseas investment in 1984 has changed this attitude. Since then there have been significant changes in mainland China’s policies and perspectives on emigration. Now emigration is increasingly seen as a matter of individual rights and unrelated to the person’s role in the state system, to the extent that the Chinese Government has announced that exit and entry management should be an area of ‘service’ rather than of ‘control’ (Biao 2003). Meanwhile, China has tightened its border controls to fight against human smuggling. In some counties of Fujian the heads of border control police stations are punished or fired if human smugglers are found in their administrative areas. Task force teams are regularly sent by the central government to the south-eastern provinces to monitor border control. Local

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police authorities are asked to submit reports on the recent situation regarding illegal emigration (Biao 2003). China does not have a blanket emigration policy covering all categories of emigrants, and the management of labour outflow in mainland China is fragmented. Emigration is discussed on a case-by-case basis and the government’s attitude tends to vary depending on different cases and circumstances. It is partly because emigration consists of different streams and is handled by different Government departments. In fact, some migration issues such as regulations on emigration agents are very new for the Chinese government and the authorities are still exploring them (Biao 2003). China is fostering programs to induce and encourage skilled migration and return. But the Mainland Chinese government has paid little attention to sending out lowskilled workers. The volume is low and the scheme is not well regulated. The lion’s share of exported labour originates form Fujian and Zhejiang which are also the major sending places of irregular migrants. If managed carefully, organized labour export can become a substitute for illegal emigration (Biao 2003). Pre-training and protection of workers’ right and welfare Sending countries usually provide workers with some training before sending them abroad. This training varies but includes specific employment training, information about working conditions, training in the receiving country language, culture, etc. For example, when Mongolians and Chinese enter Korea under Employment Permit Scheme, they need to pass a Korean language test, and the sending countries provide language training courses to applicants in cooperation with HRD-Korea. Currently in Mongolia, there are about 20 agencies officially authorized to export labour abroad. In 2004, under the supervision of the Ministry of Social Welfare and Labour of Mongolia, a ‘Labour Intermediary Bureau’ was established. Most of the agencies send labour to Japan, a few send workers to Korea, the Czech Republic, and Hungary. The Mongol News Co., Ltd is one of the officially authorized agencies engaged in sending workers to Korea. The criteria for workers includes reliable identification, age from 20 to 40, secondary education, good health, and no criminal record. Since 2003, the Mongolian National Union for Agricultural Cooperatives has been sending agricultural labour abroad. The main requirements are that the migrants are male, aged from 30 to 40 years, in good health and able to work, and are experienced in agriculture. Migrants are required to have a recommendation from the aimag (province) or soum (sub-district) Union for Agricultural Cooperatives and the police office and are also required to pass a health examination. Zag Co., Ltd, which has been sending workers since 1998, mostly provides services for nonprofessional migrants to work in the construction and sewing industries. Migrants are usually sent from 1 to 3 years. Migrants are required to be in good health and they are required to take and pass training classes facilitated by the company (Tsogtsaikhan 2008).

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Protection of workers’ rights and welfare is one of the main concerns of sending countries. As much as five percent of the total Mongolian population are studying or working abroad, even though labour migration is a new phenomenon to Mongolia. The Government of Mongolia pays an attention to ensuring the rights of Mongolian workers abroad. One typical measure is the ‘Law on Sending Labour Force Abroad and Receiving Labour Force and Specialists From Abroad’ adopted in 2001 to set the conditions of official foreign employment and protect workers’ rights (Tsogtsaikhan 2008).

Regional and Bilateral Cooperation and Scope for Future Cooperation Cross-border migration is by nature an international issue. It is necessary to have bilateral or multilateral arrangements if receiving and sending countries are to manage effectively or intervene in the movement of people between borders. Arising concerns regarding migration can be best resolved via bilateral and regional cooperation between sending and receiving countries. For a decade liberalization of the services trade has prompted the need to guarantee free mobility of professional workers and business persons. APEC measures have also been directed to facilitate the mobility of business persons within the APEC region. Northeast Asian economies have had many labour arrangements on bilateral basis. Free trade agreements signed during the last decades also include commitments on the movement of natural persons.

Bilateral and Regional Agreements on Migration Japan Training on-the-job is very important and practical for new workers not only to learn the practice of production and quality control but also to acquire a work ethic and multiple skills in the workplace. For Japan, skill and technology transfer through foreign trainees has been an important initiative of international cooperation as foreign direct investment of Japanese firms has increased in the Asian region. Under the Technical Intern Traineeship Program since 1993, Japan has concluded bilateral arrangements with China, Indonesia, Vietnam, the Philippines, Thailand, Peru, Laos, Sri Lanka, India, Myanmar, Mongolia, Uzbekistan, Cambodia, Nepal and Bangladesh to strengthen information exchange, to cope with problems that may arise, and to provide protection for trainees. One hundred and fifty organizations have been recognized as sending organizations under this scheme. When a new bill comes into effect in 2009, labour laws and regulations will be totally applied to foreign trainees engaged in on-the-job training and protection of trainees should be much improved (Iguchi 2008). Within the ASEAN+3 group, bilateral or multilateral free trade agreements have become widespread and Japan has signed Economic Partnership Agreements (FTAs with comprehensive economic cooperation) with Singapore, Mexico, Chile, Malaysia, Indonesia, the Philippines, Thailand as well as ASEAN as a whole.

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The agreements with Indonesia and the Philippines contain clauses on the acceptance of Filipino and Indonesian nurses and care givers in Japan although they have not been ratified yet. The conditions involved are restrictive enough to raise doubt whether such arrangements could generate an effective movement of people to deliver services. The nurses or care givers should have completed study at university and have acquired national qualifications in their home country. In addition, they have to pass a Japanese qualification test for nurses or care-givers using the Japanese language. The numerical quota is 1,000 persons for the two years. Among them, 400 are for nurses and 600 are for care-givers. Other types of arrangements to share information are also operating. The Immigration Bureau of the Japanese Ministry of Justice holds a seminar on immigration control every year inviting officials of immigration control from ASEAN countries to share information and discuss common issues of immigration policies. The Ministry of Health, Labour and Welfare Japan established the workshop on ‘international migration and labour market in Asia’ between 1995 and 2006 for monitoring migration movement and migration policies and creating networks in the East Asian region in cooperation with the OECD and the ILO (Iguchi 2008). Korea As of 2007 Korea has signed five FTAs. None of them includes any chapter on movement of natural persons. In the revised offer submitted to the WTO, however, Korea provides for commitments regarding intra-corporate transferees and contractual service suppliers (CSSs) that meet certain requirements, but not regarding independent professionals. Korea is signatory of bilateral MOUs under the Employment Permit Scheme with fifteen countries: the Philippines, Vietnam, Mongolia, Thailand, Sri Lanka, Indonesia, Uzbekistan, Pakistan, Cambodia, China, Bangladesh, Nepal, Myanmar, Kyrgyzstan, East Timor. The MOUs are labour agreements between Korea and sending countries to ensure transparency and efficiency in the process of receiving workers. The agreement typically includes paragraphs on the following aspects: sending agency, sending fee, advertisement of the Employment Permit System, administration of the Korean Language Proficiency Test, recruitment and selection of workers, management of job seekers’ roster, labour contract, orientation, visa issuance, entry of workers, provision of information on the sending process, employment and sojourn management, establishment of a computer system to facilitate management of the system, preferential treatment for voluntary leavers, effort to ensure the departure of irregularly staying workers, and Korean government’s support in the sending process as well as other general clauses (Hur and Lee 2008). When Korean firms received foreign workers with private fee-charging agencies being responsible for recruiting, selecting, and sending workers, the fee tended to be expensive to the extent that a substantial part of most workers’ earning went to the sending agencies. This tempted workers into overstaying to earn enough to take home. One of the main objectives of the agreement the Korean government has signed with sending countries is to ensure transparency

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of recruiting, selecting and sending fees together with the amount of collected fees in order to benefit workers rather than the fee-charging agencies. Such bilateral labour arrangements were protested by private recruitment agencies in some countries as an attempt of government to take over their business. They insisted that the regulatory agency should not compete with the private firms. In other countries, bribes were offered to recruiters. However, labour agreements under the Korean Employment System are, on the whole, deemed to have enhanced transparency and lowered the sending fees (Hur and Lee 2008). Hong Kong Hong Kong is a member of GATT (since 1986), the World Customs Organization (since 1987), APEC (since 1991), and WTO (1995). The government is fully committed to the open market policy and the principle of multilateralism, and cooperation on labour migration is generally conducted under a multilateral framework. With its commitment to multilateralism, the Hong Kong Government is not keen to enter into Free Trade Agreements (FTA) with other economies. The only exception is the Mainland and Hong Kong Closer Economic Partnership Arrangement [CEPA] signed in 2003. The main aim of CEPA is the liberalization of markets in goods and services between Hong Kong and the Chinese mainland. There are no specific clauses relating to labour migration. However, under the rubric of trade in services, there are clauses related to mutual recognition in professional qualifications, particularly in connection with construction and related engineering services, securities and futures services, insurance services, patent agents services, and professional accountant services. Such mutual recognition would serve to facilitate the mobility of skilled and professional labour (Wong, Moore and Chin 2008). Chinese Taipei The government of Chinese Taipei is signatory to bilateral agreements on temporary migration with seven sending countries: Vietnam, the Philippines, Mongolia, Thailand, Indonesia, Nauru, and Kiribati. The agreements with the last two countries are concerned with training rather than hiring foreign workers. The contents of the agreements contains dispute negotiation mechanism and labour exporting mechanisms (either by intermediaries or direct employment) in order to facilitate the hiring process of workers from sending countries (Lan 2008). Mongolia The Government of Mongolia has bilateral labour agreements with Korea (it signed a formal memoranda of understanding with Korean Ministry of Labour in 2004), Japan (a memorandum of understanding with JITCO in 1998), the Czech Republic (signed in 1999), and Chinese Taipei (signed in 2001). These bilateral agreements are labour recruitment agreements which focus on terms and conditions concerning the employment of Mongolian workers and trainees.

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These agreements also offer the certainty of agreed definitions and terms of implementation and monitoring of workers’ rights and entitlements. They also include coverage of selection procedures, entry documents, residence status, contracts, work permits, working conditions, and monitoring of the agreement.

Proposals by Country Authors on Regional Cooperation The authors considered it crucial for there to be strong cooperation between receiving and sending countries. Tsogtsaikhan (2008) proposes that receiving countries have to i) explore and ratify ILO Conventions concerning labour migration, and take a responsibility to limit irregular migration, and ii) establish government level arrangements to gradually reduce the number of undocumented migrants to prevent negative consequences of labour migration such as trafficking and exploitation of both children and women. Sending countries have to cooperate with ILO in building up national capacity to protect citizens’ rights and getting technical assistance to raise community awareness. The voice of sending countries needs to be heard at international meetings and initiatives concerning the rights of labour migrants. In pursuing these measures, the close involvement of not only governments but also social partners, private sector and non-governmental organizations is essential. Based on the experiences of individual economies, the country experts have made a number of suggestions on international cooperation in the region with respect to the migration of low skilled workers and professionals. Regarding professionals • Common training and accreditation for different types of migrant labour, and mutual recognition of professional qualifications to reduce the transaction cost of hiring foreign professionals (Hur 2008; Lan 2008; Wong, Moore and Chin 2008), and encouraging intra-regional study abroad by creating wider recognition of qualifications, introduction of double credit systems and scholarships (Iguchi 2008). • Further harmonizing immigration regulations for corporate transferees in Asia and the Pacific based upon the consensus made by the Uruguay Round on movement of natural persons (Iguchi 2008). • Facilitating movement of business travellers by wider utilisation of the APEC Business Travel Card and enlarging its scope to researchers and post graduate students (Iguchi 2008). • Enlarging universities and institutions especially for science and technology and encouraging multinational companies to establish R&D centres in developing countries, so that they are able to accept more experts as returnees from developed countries (Iguchi 2008). • Monitoring demand and supply of medical and health staff who may be migrating within the region to facilitate human resources development of such staff (Iguchi 2008).

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Regarding low skilled workers • Joint commitment of both sending and receiving countries to increase the incentive for return migration and establishment of a working group to coordinate the implementation of return migration programs (Hur 2008). • Continuing discussion of how to enhance benefits of temporary labour migration, in particular low-skilled and semi-skilled workers as an alternative way or a complementary package of contributing official development aid and giving preferential trade status to developing countries, on both sending and receiving countries (Hur 2008). • Combining strategically human resource development programs with migration policies via for example trainee programs to create more skilled workers in local industries in developing countries, especially those supplying parts and devices (Iguchi 2008). • Assisting the second generation of migrants with bilingual teachers for children of migrants and non-migrants to get equal access to education in receiving countries (Iguchi 2008). • Encouraging diversity in destination countries and providing equal opportunities for migrants and natives (Iguchi 2008, Tsogtsaikhan 2008). • Creating regional guidelines on labour migration to encourage measures for protection and social integration of migrant workers (Iguchi 2008); • Regional arrangements to reduce the number of undocumented migrants and to combat human trafficking and exploitation of children and women (Iguchi 2008, Tsogtsaikhan 2008). Regarding both low-skilled workers and professionals Development of regional job placement networks to facilitate firms’ effort in finding the workers they want, whether they are professionals or nonprofessionals (Hur 2008); Regional or bilateral labour agreements which ensure transparency of recruiting, selection and the amount of fees collected, accompanied by an establishment of a steering committee to review their implementation (Hur 2008; Lan 2008; Tsogtsaikhan 2008). • The formation of regional education networks, in particular international school facilities, to cater for the needs of the children of migrants (Wong, Moore and Chin 2008). • Cooperation for harmonizing social security taxes (Hur 2008) and pursuit of a global tax accord allowing workers to deduct the tax paid in the destination country (Lan 2008). • Portability of medical, retirement and other relevant benefits for migrant workers (Hur 2008; Lan 2008; Wong, Moore and Chin 2008). • Maintaining networks of authorities and think-tanks to monitor migration and migration policies in the region (Iguchi 2008). •

Conclusion The six member economies of Northeast Asia have different demographic structures, income levels, job opportunities, and historical experiences which

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have influenced their patterns of international labour mobility. Each member economy’s institutional features and its reaction to migration reflect thus diversity. However, all the member economies are common in that they are welcoming professional workers and more or less restrictive regarding low skilled workers. They have privileged schemes for inviting professional workers. In contrast, they erect barriers to the entry of non-professional workers of foreign nationality. The flows of non-professional foreign workers are strictly regulated and controlled. An important fact is that there are not only earnings gaps but also labour market imbalances in the region, with some economies experiencing labour shortage on the one hand and others with labour surplus on the other hand. They are benefiting from each other by receiving and sending workers. Hong Kong, Japan, Korea and Chinese Taipei are receiving foreign workers to meet their labour demands and vitalize their economies. Japan where the population also started to decline in 2005 and Korea where the population is expected to decline from 2019 will need increasing numbers of foreign workers as time lapses. Hong Kong, a city created by migrants, will continue to invite migrants and for many migrant workers serve as a transit city in the coming decades. It is reasonable to expect that China will continue to be a source country of migrant workers not only for the region but for the world. The coexistence of labour surplus and labour shortage in the region is indicative that there is an opportunity for mutual gain through cooperation. Although member economies cannot lift barriers instantly, they can minimize transaction costs by addressing overall labour or job shortages as well as skill imbalances by launching a regime which allows freer labour flows among countries in the region. A new regime can start from an initiative of compiling and diffusing more complete information on migrants and migration flows throughout the region and establishing a job placement network across borders with joint ownership of labour market information. Member economies may pursue an international accreditation network similar to the Washington Accord, exchange information on regulations associated with qualifications, and diffuse transparent procedures. However, inherent difficulties stemming from diversity of institutions involved must not be underestimated. Different institutions among member economies in qualification recognition, as well as in regulations on business activity, often make it extremely difficult to harmonize qualifications and regulations. In addition to that, professionals are keen to protect their interests and there are often strong influence groups in each economy, equipped with professional knowledge. Development of a model design to foster circular migration of low skilled workers may offer a feasible and practical approach for regional cooperation. Some APEC economies have negotiated bilateral agreements for the circular migration of low skilled workers. It would be helpful for member economies if APEC economies can build a model agreement based on these agreements. It may include not only routine mechanisms to send and receive workers, and measures to minimize placement fees, but also programs to train departing

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workers and returnees in both sending and receiving countries, an arrangement to guarantee portability of social security benefits for migrant workers, and cooperation for minimizing the number of undocumented workers.

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Chapter 3 Demographic Change and International Labour Mobility in Southeast Asia – Issues, Policies and Implications for Cooperation Chia Siow Yue

Introduction International labour migration (ILM) is an increasingly visible phenomenon in Southeast Asia in recent decades. There are two types of flows. The first is semi-skilled and unskilled workers on short term contracts (overseas contract workers) and the second involves skilled professionals and executives. The two types of flows have different determinants and effects and hence have drawn different policies from labour importing and exporting countries. Developed countries facing declining and ageing populations and labour shortages generally like to have labour inflows, but of their own choosing with regard to numbers, skills mix and geographic sources. Employers facing labour and skill shortages want access to foreign workers to meet their operational needs and to keep a lid on rising wages. However, labour in these countries want the inflows to be controlled, fearing loss of jobs and loss of bargaining leverage in wage negotiations. The general public in these labour receiving countries is concerned with the impact of a sizeable foreign workforce on the demand for public services, social cohesion, and on the incidence of disease and crime. On the other hand, developing countries with abundant labour resources seek a more liberalised global flow of labour, viewing them as a source of comparative advantage. The migrant workers themselves want a freer environment to make decisions to migrate to seek better economic opportunities. Southeast Asia is a net sender of labour to the rest of the world. Major destinations of labour migrants are the Middle East and East Asia, with smaller flows to the US, Canada, Europe and Australia. However, there are withinregion variations in sending and receiving countries. The Southeast Asian country studies covered exclude Brunei, Cambodia, Laos, Myanmar and can be grouped into the following: (a) mainly labour sending – Indonesia (Ananta and Arifin 2008), Philippines (Tullao 2008), Vietnam (Huy 2008); mainly labour receiving – Singapore (Chew and Chew 2008); (c) both labour receiving and sending – Malaysia (Kanapathy 2008) and Thailand (Chalamwong 2008). This regional synthesis seeks to examine the following for Southeast Asia: (a) determinants of international labour migration (ILM), including demographic

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change; (b) magnitudes, trends and patterns of ILM, focusing on temporary migration; (c) benefits and costs of labour migration at the macro, business, household and individual migrant levels, for labour sending and labour receiving countries, including key issues and concerns; (d) labour migration policies and practices of both labour sending and labour receiving countries; and (e) the scope for regional cooperation on labour migration.

Determinants of ILM in Southeast Asia Conceptual Framework Modern day international labour migration (ILM) is largely an economic phenomenon in Southeast Asia, except for episodes of political refugees from Indochina and Myanmar. The size and direction of ILM are determined by a combination and interaction of supply-push and demand-pull factors and government policies. Supply-push factors are those affecting the decision of labour migrants to leave the home country. Demand-pull factors are those influencing the entry of labour migrants into specific host countries. Government policies directly and indirectly condition and regulate these demand and supply factors. The theoretic framework used here to explain ILM is the Fei-Ranis 2 open economy model adapted from the earlier Lewis closed model of rural-urban migration. Cross-border migration takes place because of wage gaps between countries. For the labour receiving country, continuing economic growth and employment eventually results in labour shortage and rising wages, leading to labour inflows. Conversely, for a labour sending country, low level of economic development and rapid demographic growth led to stagnating low wages and a labour-surplus situation, which puts pressure on outward migration. Outward migration would peak and then decline as the country develops and domestic employment opportunities and wages rise. Continuing economic development would eventually turn the labour sending country into a net labour importer. In recent decades a close relationship between economic development and foreign direct investment (FDI) has developed which impacts on labour flows. Countries wishing to attract FDI to promote and sustain economic development have to liberalise the environment for labour inflows to allow intra-corporate transferees by multinational corporations (MNCs) and to allow easy access to a large pool of skilled, semi-skilled and unskilled labour. Otherwise, labour shortages and rising wage levels would induce FDI to locate to countries with more abundant labour supplies. Tsai and Tsay (2004) 3 have identified the following stages of progression. 1

2

2

3

John Fei and Gustav Ranis (1964). Development of the Labour Surplus Economy: Theory and Policy, Homewood: Richard Irwin. Tsai, Pan-Long and Tsay Ching-Lung (2004). ‘Foreign direct investment and international labour migration in economic development: Indonesia, Malaysia, Philippines and Thailand’ in Aris Ananta and Evi Nurvidya Arifin (eds),

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Stage 1: Net labour exporter and net capital importer and both may expect to rise in the early stage of development. Examples are Indonesia and Philippines. • Stage 2: Economic development with endogenous interaction between FDI and ILM work to reduce net labour export and increase net inward FDI. Examples are Malaysia and Thailand. • Stage 3: A country’s net FDI and net ILM positions would reverse. Depending on the speeds of adjustment of FDI and ILM, it is perfectly likely that a country becomes a net importer of both FDI and ILM, and eventually becomes a net labour importer and net outward investor. In reality, trade, FDI and ILM flows are both substitutes and complements and can be constrained by complex economic, institutional and policy variables. Their interactions explain the diverse FDI and ILM trajectories among countries. The more advanced economies tend to have net outward FDI and inward ILM and the less developed economies tend to have net inward FDI and outward ILM. It should be noted that labour market shortage following sustained high economic growth (and slow demographic growth) does not necessarily lead to imports of foreign labour. There are alternative options, not necessarily mutually exclusive. • One is to expand the domestic labour supply by raising female labour participation rates and extending the retirement age. For example, Singapore has been pursuing this option for the past two decades. • Second is to restrain the growth in labour demand by industrial upgrading towards a capital-intensive and technology-intensive mode of production and to relocate labour intensive production to countries with abundant low-wage labour through outward investments. Again, Singapore has been pursuing this option since the late 1980s and countries like Malaysia and Thailand are following suit. However, relocation is difficult for small and medium enterprises (SMEs), and in construction, transport and non-tradable services. • Third, in recent years there is the growing phenomenon of business outward sourcing, where a firm contracts its labour intensive operations to be performed overseas, such as in many IT, accounting and financial services operations. International business outsourcing has been greatly facilitated by developments in ICT to take advantage of cross-border differences in labour supply and wage rates as well as other business costs and regulatory regimes. However, successful international business outsourcing still has to bridge cross-border differences in business and social culture, legal and regulatory frameworks, time zones and dispute resolution processes. The Philippines is a growing recipient in Southeast Asia for business outward sourcing. Notwithstanding the options above, labour-scarce countries still need to import foreign workers to augment the domestic labour supply and to fill sector•

International Migration in Southeast Asia, Singapore: Institute of Southeast Asian Studies.

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specific and occupation-specific shortages. These shortages range from highlevel professionals and executives to semi-skilled and unskilled workers in the agro-sector, construction, labour intensive manufacturing, and services, and particularly in 3D (dirty, dangerous and demanding) jobs increasingly shunned by local workers in rapidly growing economies.

Supply-Push, Demand-Pull Factors and Government Policy Factors ILM in Southeast Asia is a response of individuals and countries to labour surplus or labour shortage situations arising from asymmetries in national economic performance and demographic trends. As Japan and the Asian Newly Industrialised Economies progressed up the development ladder and faced declining total fertility rates (TFR) the ensuing labour shortages have pressured them to source labour externally, largely from labour-abundant neighbouring Southeast Asian countries. However, labour receiving countries are apprehensive of the impact of large inflows of foreigners on their labour markets, and the associated demand pressures on social infrastructure and services. As a result, they wish to control the volume and source of labour migrants. Policies are usually two-tracked and asymmetric: liberal policies towards inflows of professionals and executives, with prospects of permanent residence and citizenship, and highly restrictive policies towards unskilled and semi-skilled workers. Political-social-cultural considerations may also lead some receiving countries to prefer sourcing from particular regions and countries. In turn, labour sending countries are concerned over remittances from overseas employment leading to overvaluation of the real exchange rate, displacement of labour from domestic industries and brain drain. Policies range from ‘laissez faire’ in which out-migration is regarded as a matter of individual choice, to specific policies to promote labour export to ease domestic unemployment and earn foreign exchange in countries such as Vietnam and Indonesia. Advances in modern transportation and ICT have greatly weakened the disadvantage of distance in choice of destination, while social and cultural links continue to bias migration in favour of certain locations. . Supply-push and demand-pull factors include differential economic growth performance and demographic change impacting on the labour market in terms of labour supply, employment and wages; and also specific political situations that give rise to refugee flows.

Demographics in Southeast Asia Table 3.1 presents some of the demographic details of Southeast Asian countries: • The 10 economies show wide diversity in population size (and hence size of labour supply), with Brunei at one extreme with less than 400,000 people, to Indonesia at the other extreme with 228 million.

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•

Average population growth rates averaged 2.2 percent in 1975-80, and are projected at 1.2 percent in 2005-10, and 0.7 percent in 2025-50. In contrast, Northeast Asia (Japan, China, South Korea and Hong Kong) have experienced slower population growth and are projected to experience decline in 2025-50. Southeast Asian countries are at an earlier stage of the demographic transition than the Northeast Asian region. Most of them are in the second or third stages. The total fertility rate (TFR) of Southeast Asia has been falling but remains above the replacement level of 2.1 except for Singapore, which like Northeast Asia has a TFR below replacement level. The age structure in Southeast Asia (except Singapore) is still youthful. Hence the countries have to continue to grapple with a high dependency burden of the young and a rapidly expanding labour force and pressure on financial resources for education, housing and creation of new jobs. On the plus side, these countries enjoy a ‘demographic dividend’ and a rapidly expanding consumer base, which is a plus for business. In contrast, the populations of Northeast Asia and Singapore are ageing rapidly as indicated by the population ageing index and the percentage of the aged population (aged 65 and over). For example, the aged population in Singapore will rise to 22.3 percent by 2025 and to 31.3 percent by 2050. Thus Northeast Asia and Singapore will have to grapple with the economic and social problems of population ageing much earlier than the rest of Southeast Asia. Table 3.1. Population, Population Growth, TFR and Population Ageing Index

Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam

Total Population 2007 (‘000) 390 14,638 228,121 6,193 26,240 51,475 85,884 4,434 65,283 86,445

China Japan Hong Kong South Korea

1,331,356 128,326 7,194 48,142

Country

Population Growth Rate (%)

Total Fertility Rate

195055

197580

200510

202530

204550

197080

200510

202030

204550

Ageing Index 2007

5.6 2.2 1.7 2.0 2.7 1.8 3.0 4.9 3.0 1.9

3.7 -1.4 2.2 1.2 2.3 2.2 2.7 1.3 2.3 2

2.1 2 1.1 2.2 1.7 0.9 1.6 1.2 0.8 1.3

1.3 1.3 0.5 1.5 0.9 0.5 0.9 0.5 0.3 0.7

0.8 0.8 0.1 0.8 0.4 0.1 0.4 -0.2 -0.1 0.2

4.4 4.7 4.7 6.7 4.2 5.3 5.5 1.9 4 5.9

2.3 3.7 2.2 4.3 2.6 2.1 2.8 1.3 1.9 2.1

1.9 2.6 1.9 2.6 1.9 1.9 2 1.6 1.9 1.9

1.9 2.1 1.9 1.9 1.9 1.9 1.9 1.8 1.9 1.9

17.4 16.2 30.9 13.3 23.5 28.1 18.5 74.8 47.5 26.5

1.9 1.4 4.6 2.5

1.5 0.9 2.7 1.6

0.6 0.1 1 0.3

0.1 -0.4 0.6 -0.1

-0.4 -0.5 0.2 -0.7

3.3 1.8 2.3 2.8

1.7 1.4 1 1.2

1.9 1.7 1.9 1.5

1.9 1.9 1.5 1.8

55.9 201.0 116.1 83.4

Source: UN, World Population Ageing 2007

The contrasting demographic and economic changes in Southeast Asia are best exemplified by a comparison of the Philippines and Singapore. The Philippines has the highest fertility rate, is a laggard in economic performance

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and has the largest labour outflows. Singapore has a robust economic performance but a rapidly falling fertility rate and is a major importer of labour. • Philippines: Tullao (2008) shows that the population increased rapidly from about 20 million in 1950 to more than 80 million currently and is expected to exceed 90 million by 2010. Although the annual population growth rate declined from 3 percent in the 1960s to 2.3 percent in the 1990s, it is still high relative to the rest of Southeast and Northeast Asia. The rapid population growth has put pressure on the government to create jobs and to continuously expand the resources for housing, schools and other social services. .The Philippines has a very young population age structure. Almost 70 percent of the population is under age 35. The median age was 19.7 in 1990, 21.0 in 2000, and is projected to rise to 28.4 in 2020. The Philippines dependency ratio has been falling since the 1980s. The Philippine labour force has grown from 8.5 million in 1960 to 33.2 million in 2006. The unemployment rate peaked at 11.1 percent in1985 and was estimated at 7.3 percent in 2006. The growing numbers of unemployed increasingly seek overseas employment. • Singapore: Population growth through natural increase has rapidly decelerated with declining TFR and Singapore’s small population has to be enlarged by substantial in-migration. Singapore’s population is rapidly ageing. Those aged above 65 accounted for 7.3 percent of the total population but will rise to 13.5 percent by 2020 and to18.7 percent by 2030. This has many implications for Singapore’s economic growth and competitiveness. The Singapore government has targeted a population size for Singapore of 5.56.5 million and this can be achievable only with substantial immigration. There has also been a number of strategies to increase the TFR including subsidies to working mothers for placing their children in day-care centres; creation of before- and after-school service centres for primary school students and a liberalised inflow of foreign household maids.

Contemporary Trends and Patterns of ILM in Southeast Asia Southeast Asia has historically been the destination of migration waves from China, India, and the Middle East and these have left strong imprints on the region’s demography, society and politics but these migrations were terminated by World War II. In the immediate post-war years, political developments and independence in Southeast Asia have led to restrictions and controls on international migration flows. The focus of this study is on temporary international labour migration. It is noted that it is difficult to distinguish between temporary and permanent migration at the start of the process, as temporary labour contracts may turn into permanent residence and foreign citizenship, unless the host countries specifically forbid foreign workers staying on indefinitely. This study also excludes the considerable number of political and economic refugees that left their homelands in Vietnam, Cambodia and Myanmar in recent decades.

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In recent decades, two-way ILM flows have played a pivotal role in Southeast Asia’s economic transformation, although comprehensive analysis is hampered by the lack of comparable data and the large numbers of undocumented migrant workers. The World Bank (2006a) estimates that the number of migrants doubled or even tripled in most net labour importing countries from the early 1980s to 1997 with some 2 million foreign workers employed in Northeast Asia and some 3-4 million employed in Southeast Asia.

Sources and Destinations Up to the mid-1980s, the Middle East was the major destination of ILM flows from Southeast Asia, pulled by the post-1973 Middle East oil boom and the subsequent huge demand for foreign contract workers in construction and services. The Philippines, Indonesia and Thailand were the main labour supplying countries. Since then, with the end of the Middle East oil boom and the ongoing East Asian economic miracle, ILM from Southeast Asia have increasingly moved within East Asia (see Table 3.2). For labour receiving countries, the pull factors are sustained high economic growth and fertility declines leading to labour shortages and rising wage levels, as well as the increasing reluctance of the more affluent domestic labour to engage in 3D jobs. The main receiving countries are the more advanced economies of Japan and the Asian NIEs (South Korea, Taiwan, Hong Kong and Singapore). For labour sending countries, the push factors are high unemployment rates and low wages, reflective of the pressure of rapid population and labour force growth and sluggish economic growth. The supplying countries are mainly from the large Southeast Asian countries, particularly the Philippines and Indonesia but increasingly Vietnam. Within Southeast Asia, the labour flows are to Brunei, Singapore, Malaysia and Thailand. As indicated earlier, there are two labour migration streams in Southeast Asia. The smaller stream comprises inflows of professionals and executives, mainly from Japan and the Asian NIEs as well as Europe and the US and linked to the growing MNC investments in the region. The larger stream comprises inflows and outflows of semi-skilled and unskilled temporary overseas contract workers in agriculture, labour-intensive manufacturing, construction and services such as household maids and care-givers. The labour receiving countries view such inflows of workers as temporary and impose restrictions on them staying on indefinitely. However, some countries appear to have difficulties in keeping them ‘temporary’ due to structural problems in the labour market, resulting in circular migration. For example, during the Asian financial crisis, when severe economic downturns led to widespread unemployment, the Malaysian government repatriated large numbers of foreign workers to preserve jobs for locals, but plantation and construction sectors as well as some services suffered severe labour shortage as the local unemployed failed to fill the vacancies.

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Table 3.2. Estimated Stocks of Migrant Workers from and to Southeast Asia Source/Destination Year

Stock Flow (number) (number)

Out-migration from: Indonesia* 2001 2,000,000 Indonesia 2007 2,700,000 593,024 Malaysia* 1995 250,000 Philippines* 2005 4,750,000 Philippines 2006 1,062,567 Singapore 2007 150,000 6000 Thailand* 2002 340,000 Thailand 2007 162,000 Cambodia* 1999 200,000 Laos* 2004 173,000 Myanmar* 2001 1,100,000 Vietnam* 2004 340,000 Vietnam 2007 >400,000 85,000 In-migration to: Brunei* 1999 91,800 Indonesia* 2004 91,736 Malaysia* 2004 1,359,500 Malaysia 2006 2,600,000 Philippines* 2003 9,168 Singapore* 2004 580,000 Singapore 755,000 Thailand* 2004 1,623,776 Thailand# 2006 154,220 Vietnam* 2001 30,000

Main Destinations/Sources Middle East, Malaysia, Taiwan, Singapore, South Korea Middle East, Malaysia, Singapore, Taiwan, Hong Kong Japan, Taiwan Middle East, Malaysia, Thailand, South Korea, Hong Kong, Taiwan Middle East, Hong Kong, Taiwan, Singapore, Italy, UK, South Korea US, Canada, UK, Australia, New Zealand Middle East, Taiwan, Myanmar,Singapore, Brunei, Malaysia Middle East, Japan, Asian NIEs Malaysia, Thailand Thailand Thailand Korea, Japan, Malaysia, Taiwan Taiwan, Malaysia, South Korea, Japan, Middle East

Indonesia, Nepal, India, Myanmar, Bangladesh

Southeast Asia, South Asia, China, US, Europe, Japan Japan, British, American, Chinese, Indian

Sources: * Hugo (2005b). Other numbers are from Indonesia (Ananta and Arifin 2008); Malaysia (Kanapathy 2008); Philippines (Tullao 2008); Singapore (Chew and Chew 2008); Thailand (Chalamwong 2008); Vietnam (Huy 2008). # The figures for in-migration flows to Thailand exclude in-migrants from Myanmar, Cambodia and Laos which numbered more than half a million in 2007.

•

•

Although the stock of foreign workers is a relatively small proportion of total labour supply in most labour importing countries, they account for a rising proportion of labour growth in the 1990s. Inward ILM accounts for over 30 percent of the total labour force in Singapore, 20 percent in Malaysia, and 6 percent in Thailand. Populous Philippines and Indonesia have been experiencing rapid labour force growth as well as a sluggish economy. The result has been persistent double-digit unemployment and underemployment and increased pressure to seek overseas employment. Philippines (Tullao 2008): The Philippines has the largest stock and flow of workers abroad among Southeast Asian countries. Workers migrated as temporary construction and logging workers in Indonesia and Malaysia in the 1960s while Filipino musicians and entertainers migrated to the major cities in Asia. The oil boom in the Middle East in the 1970s attracted large numbers of Filipino professionals and unskilled and semi-skilled workers. In the 1980s and 1990s the economic miracle in Japan, Asian NIEs and Malaysia also attracted Filipino workers that included entertainers, factory workers, construction workers and household maids. In 2006, a total of 788,000 land based Filipino workers (OFWs) migrated to over 150

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•

•

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destinations worldwide, with over half to the Middle East, 28 percent to other Asian destinations 7 percent to Europe and 3 percent to the US. Indonesia (Ananta and Arifin 2008): Indonesia has the second largest outflow of foreign workers in Southeast Asia with significant outflows only since the early 1980s. Overseas workers rose from 339,000 in 2001 to 647,000 in 2006 but fell to 593,000 in 2007. The cumulative total reached 2.7 million officially documented migrants, representing 2.8 percent of the total Indonesian workforce. There are also considerable numbers of Indonesian irregular overseas workers. The rising out-migration is due to the decline in poverty, falling TFR and rising education levels in Indonesia, while the substantial number of irregular workers abroad is due to the long and expensive bureaucratic process for regular migration. The major destinations are the Middle East, Malaysia, South Korea and Taiwan. Vietnam (Huy 2008): After the end of the Vietnam War, the government adopted policies to export thousands of workers to Eastern Europe every year. However, the collapse of the Soviet bloc and ensuing economic recession and restructuring led to the repatriation of many Vietnamese workers. In the 1990s Vietnam sought access to new labour markets and 5190 Vietnamese workers went abroad in 1995-2000, rising to 78,800 in 2006 and 85,000 in 2007. The stock of Vietnamese workers abroad stood at over 400,000 in 2007. By 2000 Vietnam was exporting labour to 23 destinations, including Japan and the Asian NIEs and the Southeast Asian countries of Malaysia, Thailand, Singapore, Cambodia, Myanmar. The government seeks labour exports to provide employment opportunities for its annual 1.2 million new entrants to the work force, to help generate additional income for workers and their households, and to contribute to Vietnam’s GDP. It aims to send some additional 85,000 workers abroad in 2008 and 100,000 by 2010. To achieve the labour export target, expansion will be directed towards new markets. Currently Vietnamese workers are found in nearly 40 countries/territories worldwide. Thailand (Chalamwong 2008): Documented out-migration became significant in Thailand only since the early 1980s. Large numbers of workers went to the Middle East during the oil boom years and also increasingly to Japan and the Asian NIEs, with the numbers reaching 162,000 in 2007. Inmigration into Thailand is mainly from neighbouring countries, particularly Myanmar, to meet labour shortages in the agricultural and fishery sectors. Malaysia (Kanapathy 2008): Out-migration from Malaysia to Singapore of both professionals and the semi-skilled and unskilled workers are in response to the push-pull factors of Malaysia’s ‘bumiputra’ or indigenous policy and Singapore’s better job prospects and wages. At the same time, rapid economic growth in Malaysia led to labour shortages in specific sectors and foreign workers filled the gap in labour intensive industries, agriculture and plantation sectors, construction and household maid services. Also, there is a growing dependence on foreign professionals, although numerically they still constitute less than 2 percent of Malaysia’s labour force. The number of foreign workers in Malaysia has doubled from around

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one million in the mid-1980s to more than two million in 2007. As of December 2006, there were 1.89 million foreign workers with valid work documents and an additional estimated 700,000 with irregular status, resulting in a total of 2.6 million foreign workers accounting for about 22 percent of the Malaysian labour force. The majority of the foreign workers were from Indonesia (62.8 percent), followed by South Asia and Myanmar. Malaysia’s porous borders with Indonesia and the Philippines have led to large inflows of undocumented and irregular labour. Because of its historical, political, cultural and geographical attributes, the Malaysian state of Sabah has attracted large numbers of irregular Indonesian workers. Singapore (Chew and Chew 2008): Singapore’s labour intensive phase of industrialisation depended heavily on foreign workers from neighbouring Malaysia and subsequently from other Southeast and South Asian countries. Policymakers in Singapore did not want the rapid hollowing out of the manufacturing sector experienced by Hong Kong and hence continued to allow foreign workers in its labour intensive industries, while at the same time attempting to restructure the economy and phase out labour intensive processes. Currently there are about 755,000 foreign professionals and workers in Singapore, with 110,000 professionals on employment passes and 645,000 semi-skilled and unskilled foreign workers on work permits out of a total Singapore workforce of 1.8 million. Inflows of professionals are from OECD and developing economies, while inflows of semi-skilled and unskilled workers are mainly from Southeast and South Asia and China. At the same time, Singaporean professionals have been emigrating to more advanced countries, particularly North America, UK, Australia and New Zealand. Singaporeans living abroad are estimated to range from 100,000 to 150,000, with annual emigration of some 5000-7000. Lee Kuan Yew (Straits Times 14 Feb 2008) revealed that Singapore lost about 1000 ‘capable’ people every year, which is about 4-5 percent of the top 30 percent of the population. The Singapore government has set up an Overseas Singaporean Unit (OSU) with the objective of engaging overseas Singaporeans and hopefully triggering their desire to return home.

Sectoral and Occupational Distributions •

Philippines ‘exports’ professionals including doctors, engineers, nurses, teachers, and IT specialists as well as semi-skilled and unskilled workers such as technicians, production workers, caregivers, entertainers and household maids. The top 3 occupational groups are production workers, service workers and professional workers. There are also over 230,000 seafarers. Nursing and teaching professionals are in demand in various advanced countries, particularly Japan, US and Europe. A number of studies are showing that the out-migration of Filipino professionals is undermining the country’s healthcare services. Philippines overseas workers generally have high educational levels.

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Vietnam’s labour exports are mostly found in semi-skilled and low-skilled occupations. The largest numbers are in assembly and manufacturing industries (Taiwan), construction (Malaysia, United Arab Emirates) and fishing (Taiwan, South Korea). In Japan and South Korea, some Vietnamese workers are under industrial internship programmes. Thailand: About 75 percent of Thai workers abroad have lower-secondary education or less. The top five occupations in 2007 are skilled workers in various businesses (34 percent), low-skilled workers (25 percent), factory workers and machine operators (23 percent), sales and service workers (8 percent), and technical and related workers (3 percent). Malaysia: Legally documented inflows of foreign workers are found mainly in manufacturing (34.6 percent), agriculture (25.5 percent) and domestic services (16.6 percent). The manufacturing sector’s dependence on foreign workers has risen significantly, from under 10 percent in 1990 to 24.7 percent by 2001. In Singapore, among the work permit holders are 170,000 household maids and 145,000 construction workers. Some 21 percent of the foreign workers were employed in the manufacturing and community and personal services sector, 17 percent in the financial and business services sector and 15 percent in the trade sector. Dependency on foreign labour was a high 63 percent of the workforce in the construction sector, 42 percent in the manufacturing sector, 28 percent in community services and 23 percent in financial and business services.

Skilled Migration and Brain Drain Globally, there has been a net flow of highly skilled professionals and executives or ‘brains’ from the less developed countries to the more developed countries in the OECD. The ILM of professional and skilled manpower have gained importance over the past two decades, although their numbers are still small relative to semi-skilled and unskilled overseas workers. Developing countries generally have a scarcity of such skills and brain drain can adversely affect national economic development. Many of these skilled emigrants started the migration process when they left for the OECD countries to pursue university education and then stayed on to gain work experience and were attracted by the job opportunities and the better remuneration and working conditions. At the same time, liberalization of the ‘movement of natural persons’ in GATS and growing FDI presence have resulted in significant labour mobility of professionals and skilled workers from developed to developing countries as well as between developing countries. Many countries now have deliberate policies of attracting brains. The Philippines represents an interesting case of a developing country that exports large numbers of its professional nurses to meet rising demand in OECD countries for healthcare professionals (nurses and doctors). However, the continuing and rising exodus of experienced nurses is threatening the viability and productivity of the Philippines healthcare sector. The strong external

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demand has also attracted Filipino doctors and other health professionals to take up nursing qualifications to improve their ‘exportability’. Singapore represents an interesting case of a national strategy to attract inflows of professionals and executives to augment its limited domestic ‘talent pool’ to facilitate economic upgrading and ensure sustainable economic growth. Chew and Chew (2008) show that during the 1977-1988 period, some 88,000 foreigners took up Singapore citizenship and 67,000 became permanent residents (PRs). By 1994 an additional 50,000 foreigners had taken up Singapore citizenship and 124,000 became permanent residents. The proportion of permanent residents in Singapore’s total population increased from 3.7 percent in 1990 to 10.1 percent in 2005, growing at an average annual rate of over 9 percent, far exceeding the population growth rate from natural increase. In 2004-2006, an additional 11,000 foreigners were granted Singapore citizenship and 49,000 were granted permanent residence. About 80 percent of the new Singapore citizens and 60 percent of the new Singapore PRs are professionals, managers, executives and administrators. More than 40 percent of them are from Southeast Asian countries and almost 50 percent are from other Asian countries.

Temporary Overseas Contract Workers (OCW) The majority of ILM into and out of Southeast Asia are unskilled and semiskilled ‘overseas contract workers’ (OCW) on 2-3 year contracts. OCWs are viewed as ‘temporary’ labour inflows by host countries and strictly controlled. For example, the ability of OCWs to change jobs and employers is regulated by their employment contracts. While the bulk of OCWs return to their home countries, there are signs that many of them are either becoming ‘circular’ workers through successive renewal of contracts (sometimes by changing their identities and passports) or becoming undocumented and illegal workers. The OCWs in Southeast Asia are mainly from Indonesia, Myanmar, Philippines, Thailand, Vietnam as well as from China and South Asia.

Undocumented ILM Undocumented foreign workers are migrant workers who overstay their visas and work permits or enter a country illegally. They make up a sizeable component of migrant workers in Southeast Asia, and are estimated at around 2 million. Their large numbers reflect the push factor of poverty, unemployment and lack of economic opportunities in their home countries, the pull factor of employment and attractive salaries in the destination countries, as well as difficulties of legal entry into destination countries. They pose a major problem for receiving countries with porous borders. Undocumented migration is becoming a political and social issue in many host countries because of perceived social costs and security risks. Deterrent measures imposed by the receiving countries include forced departure or repatriation; fine and imprisonment; as well as punishments for middlemen and employers of undocumented migrant workers.

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•

Thailand is the destination of cross-border illegal migration from Myanmar as well as from Cambodia, Laos, China and South Asia. Large numbers of workers from Myanmar, Cambodia and Laos have been entering Thailand since 1989 when Thailand changed its policy towards its neighbours from ‘battle field to trade’. Thailand has introduced several registration initiatives to legalise the illegal migrant workers. In Malaysia, it is estimated that about one third of foreign migrant workers are ‘undocumented’. Malaysia has two distinct cross-border flows, one to Peninsular Malaysia from neighbouring Indonesia, Myanmar, Thailand and South Asia and the other stream to the East Malaysia states of Sabah and Sarawak from neighbouring eastern Indonesia and southern Philippines. More than 70 percent of the ‘undocumented’ are from Indonesia and sizeable numbers of the undocumented in Sabah are Filipinos. There are also many visa overstayers from China and South Asia. The bulk of illegal migrants are in 3D jobs in the construction, plantation and services sectors. Despite the Malaysian government’s increasing intervention to stem irregular migration, its incidence continues to remain high, in what Kanapathy (2008) attributes to poor governance and unintended policy outcomes.

Feminisation of Foreign Labour By the late 1990s, female workers accounted for nearly 80 percent of outflows from Indonesia, 60 percent from the Philippines and 20 percent from Thailand. The majority of them are unskilled, taking up low wage, and low status 3D jobs. The largest concentrations are in the services sector, as household maids and healthcare givers and in the entertainment/sex industry. The ready availability of household maids and healthcare workers have helped the receiving countries improve the quality of life of households and care for the aged and young children as well as enable housewives to enter the labour market. However, the vulnerability, exploitation and abuse of these female workers have increasingly caught the attention of social activists and NGOs.

Effects and Impacts There are benefits as well as costs of labour migration at both the macro and micro levels and the aim is to work towards a win-win situation for all. For the labour sending country, the bulk of the economic gains from ILM accrue at the micro level to the migrants and their families and these gains are often large, as the migrant workers were either unemployed in their home countries or received wage levels that are substantially lower than that found in the receiving countries. At the macro level, the country benefits from the reduced pressures of unemployment, from remittances received and from skills and experiences gained by migrant returnees. However, outward ILM also imposes substantial costs. At the micro level, these include psychological costs on the migrants, dysfunctional families, and exploitation and abuse. At the macro-level are the negative aspects of the brain drain and remittances. For the labour receiving

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country, there are also various perspectives on the effects of the large presence of foreign workers in an economy. From the national and employer perspectives, they relieve the general and specific shortages of labour which act as constraints on economic and business growth. For labour unions and domestic workers, they compete for jobs and depress their wages. However, when migrant workers take up jobs shunned by local workers, they complement rather than compete for jobs. In addition, consumers generally benefit from the cheaper goods produced and more particularly from the availability and affordability of services provided by foreign labour.

Output, Employment and Wage Effects For the labour sending country, out-migration acts as a safety valve for unemployment pressure. Also, out-migration of the economically inactive and unemployed would have no significant negative impact on the country’s total output. However, in some locales and occupations, the loss of a significant proportion of the labour force can be expected to lead to labour shortages and a rise in wages, as is the case with the Philippines health sector. Out-migration is also likely to have significant effects on the labour force participation of remaining household members in the migrant’s household; the departure of a domestic earner would lead to a within-household substitution of work among the remaining household members and possibilities for changes in the female labour participation rate: • Philippines: What started as temporary relief from the unemployment burden in the 1970s turned out to be the biggest contributor to the GNP. Overseas employment has been growing and for many years, the number of Filipino workers employed overseas has exceeded the increase in local employment. Remittances may also worsen income distribution in a particular community between households with and without remittance incomes. In the case of young Filipinos from rural areas who aspire for overseas employment as household maids, it has encouraged them to seek employment in the urban sector to first gain some experience for overseas employment • Vietnam: The sending of over 400,000 workers abroad, 85 percent of whom are from rural areas, has provided one fourth of the 1.6 million new jobs needed each year. This has reduced urban unemployment and rural underemployment. The labour export industry also created numerous jobs domestically for related services like vocational training and foreign language training. For the labour receiving country, the most significant impact of foreign workers is relieving labour and skill shortages that can constrain economic growth as well as filling gaps in 3D tasks shunned by local workers. Foreign labour also serves as a labour reserve, helping to alleviate labour shortages during the up-cycle and retrenching and repatriating them during the down-cycle. Thus foreign labour helps to stabilise the labour market for local labour and moderate wage growth. In the intense global competition for FDI, availability

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of skilled and unskilled labour has become a condition for attracting and retaining FDI in a country. For countries such as Singapore and Malaysia that have become heavily dependent on foreign labour, trying to reduce the dependence has become extremely difficult as it leads to economic and social dislocation. • Malaysia: Kanapathy (2008) estimates that the contribution of foreign workers to the Malaysian GDP ranges from 5 percent based on partial equilibrium studies to about 9 percent based on general equilibrium analysis. During the Asian financial crisis, the Malaysian government in an effort to preserve jobs for Malaysians repatriated large numbers of foreign workers (mainly Indonesians and Filipinos). This led to severe dislocation in the plantation, construction and service sectors and the government was forced to retract its policy. Oil palm, construction and even manufacturing are increasingly dependent on foreign labour to remain competitive. The latest Malaysian Development Plan’s targets for agricultural expansion will not be realized without continuing large inflows of foreign labour. Likewise, Malaysian’s heavy reliance on FDI means it could not risk an abrupt uprooting of footloose foreign firms until it could build up its domestic capabilities. • Singapore: The Economic Survey of Singapore (First Quarter 2004) demonstrated the positive role of foreign labour in Singapore. During the period 1992-97 when the economy was growing at an annual average rate of 9.7 percent, foreign labour contributed 29 percent of that growth. In addition: - Work permit holders: High and low value added activities are colocated, leading to low-end jobs supporting high-end jobs. Being able to employ work permit holders has helped companies in Singapore average down the cost of business, thus ensuring that industries remain viable and local jobs continue to exist. Foreign workers also enable Singapore companies to start up new capacities without being constrained by the availability of local labour. Foreign workers are more amenable to undertaking physically unpleasant jobs at lower wages as compared to local workers. In industries such as construction, marine and waste management, the cost of hiring foreign labour is substantially lower than that of local workers. - Foreign professionals: Foreign expertise also helps to grow industries indirectly by increasing the rate of technology adoption and generating strong externalities on local human capital development. Employment pass holders help to breed innovation and entrepreneurship in Singapore. Foreign expatriates also contribute to Singapore’s social diversity as a global city and act as a magnet for foreign talent. The presence of a diverse and vibrant pool of employment pass holders facilitates the internationalisation of Singapore firms. - Wage effect: Lim Chong Yah and Associates (1988) argue that the large presence of foreign unskilled and semi-skilled workers from lower wage countries depress the wages of similar Singaporean workers, while the

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large presence of foreign expatriate professionals and managers in MNCs from the higher-wage countries raise the average salaries paid to similar Singaporean professionals. In a similar vein, Chew and Chew (2008) argue that high income Singaporeans are internationally mobile and Singapore employers would have to increase monthly pay to be internationally competitive; on the other hand, the wages of low income Singaporeans with limited education and skills would not rise much, as they compete with numerous foreign workers in Singapore and their employers compete with firms in Malaysia, China and India. However the presence of foreign labour will enhance Singapore’s competitiveness and increase the number of jobs available for Singaporeans.

Delayed Structural Adjustment Effect Reliance on foreign workers slows the pace of structural adjustment in countries using foreign unskilled and semi-skilled labour. Countries with policies of not depending on foreign labour, such as Japan have accelerated economic restructuring; however, these countries have also large numbers of illegal foreign workers in various ‘underground’ activities. For a number of Southeast Asian countries, the availability of cheaper foreign labour made it possible for these countries to maintain competitiveness in labour intensive export products despite rapid depletion of the domestic labour supply. Kanapathy (2008) argues that Malaysia’s two-pronged strategy to gradually phase out foreign labour alongside policies to upgrade the economy through human capital development and fiscal and industrial policies to attract skill and capital industries, has only contributed to incremental changes in total factor productivity. TFP contribution to GDP growth has increased marginally from 1.1 between 1996-2000 to1.3 between 2001-2005. Between 1990 and 2005, foreign labour contributed more than one-third of the increase in total labour supply, and over 98 percent of them were low-skilled contract workers. The heavy reliance on foreign labour to drive growth has clearly overshadowed the national policy to reduce foreign labour dependence. There are also important longer-term implications on the employment of educated and trained labour entering the labour market with higher reservation wages. She argues that Malaysia needs to re-examine its strategy to increase investment in low value added agricultural activities and should provide incentives for Malaysian investors to relocate its low value added activities overseas.

Remittance Effects The World Bank (2006a) reports that international remittances received by developing countries is estimated to have reached $167 billion in 2005, excluding unrecorded flows through informal channels. Remittances can have macro positive and negative effects on the labour sending country. Remittances augment domestic savings and provide a steady stream of foreign exchange earnings that help overcome the balance of payments constraint and improve a

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country’s credit ratings for external borrowing. However, over-reliance on remittance inflows could have negative economic consequences. • Philippines: Tiglao (1997) argued that Philippines remittances have insulated a backward agricultural sector and diverted attention away from attracting FDI into manufacturing. There is also concern that sizeable remittance inflows could lead to overvalued currencies, similar in effect to oil and the ‘Dutch disease’. Governments could try to maximise the effect of remittances on national economic development, by reducing the transaction costs involved in remittance transfers, and by schemes that could put remittances to productive use. At the micro-level, remittances play a crucial role in reducing the incidence and severity of household poverty. Households increase their consumption, pay off household debts, increase ‘investment’ in land, housing, education and health, and become entrepreneurial. Tullao (2008) argues that the large remittances sent regularly has stabilized the Philippines currency and contributed to household welfare and growth of the national economy. Remittances sent by OFWs are a major source of foreign exchange for the country, growing from USD 4.9 billion and 7.2 percent of GNP in 1998 to almost USD13 billion in 2006 and 10 percent of GNP currently. During the Asian financial crisis in 1997-98, the Philippines economy escaped negative growth in 1998 as remittance inflows propped up domestic demand. However, remittances have caused an appreciation of the real exchange rate and contribute to the Philippines’ loss of comparative advantage. At the household level, the income level of many Filipino households has improved with remittances. A 1997 survey showed that 8.6 percent of Filipino households derived their main source of income from remittances. These households used their remittance income primarily for basic household necessities; payment of debts; education and medical expenses; and investment in land and home and in micro-enterprises. • Indonesia: Ananta and Arifin (2008) show that remittances increased from under US$1 billion in the 1980s and early 1990s to an annual US$1.2 billion in 1998-99 and accelerated to near US$3.0 billion in 2005 and US$4.3 billion by third quarter 2007. These figures are underestimates as many workers sent their money through informal channels and through returning migrants. However, the contribution of remittances to GDP is still low, at less than 0.5 percent of GDP during 1983-2000 (except 1998). In 2003 it increased to 1.57 percent of GDP. When compared to the country’s export earnings, remittances are equivalent to 4.5 percent of total export and 5.8 percent of non-oil exports in 2003. In 2006, the Indonesian government announced the targets of sending 3.9 million workers overseas and remittance receipts of US$20.75 billion by 2009. • Thailand: Chamlanwong (2008) reports that in 2001, remittances via banking facilities amounted to USD1.2 billion and increased to USD1.24 billion in 2006. The most significant effect is on current account and the balance of payments. Remittances may lead to expansion of output and

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family income and expenditures on non-tradable goods such as land, houses, and education as well as on luxury durable goods. Vietnam: Huy (2008) reports that in 2004, Vietnamese overseas workers remitted home some US$ 1.6 billion, accounting for 3.3 percent of GDP. In addition, labour export firms contribute tens of billions VND to the State Budget yearly.

Brain Drain and Brain Gain Effects In the early literature on migration, the out-migration of the highly skilled and professionals was viewed as a ‘brain drain’, impacting negatively on the development potential of the sending country by depleting the supply of scarce human resources. These human resources have been trained at great public expense and emigration leads to a loss of a country’s ‘best and brightest’. Low levels of education resulting from high levels of skilled emigration can slow the growth rate of the economy and adversely affect those who remain. The negative effects of skills depletion are best exemplified by the Philippines, where success in sending nurses abroad has created a crisis in the delivery of healthcare in the country. However, it is increasingly recognised that the brain drain could also have positive effects on the sending countries that are unable to efficiently absorb their own human resources because of a high unemployment rate, as emigrants can make a greater contribution to development through their remittances. Prospects of emigration for work can also lead to a higher level of human capital formation in the sending country. Also, there are significant gains when the ‘brains’ eventually return. Athukorala (2004) cautioned, however, that the realisation of these gains of skill formation depends on three preconditions: that jobs open to the migrants in their host countries result in additional skill acquisition; that these new skills are appropriate to the labour market conditions of the home country; and that upon return the workers will employ these new skills. • The Asian diaspora is increasingly viewed by their countries of origin as a valuable resource to be tapped for national economic development - for their remittances and investments, entrepreneurial and professional skills, and business and social networks. For example, the ‘overseas Chinese’ communities in Hong Kong and Taiwan and to a lesser extent in Southeast Asia have been major foreign investors in China, particularly in the first decade of China’s open-door policy. There is also a sizeable Vietnamese diaspora, known as ‘Viet Kieu’ who fled Vietnam in the 1970s and have settled mainly in the OECD countries. • Philippines: Tullao (2008) argues that when the more productive human talent are employed abroad, the less qualified and inexperienced are left domestically. Inefficiencies of these young and inexperienced service providers contribute to increases in labour costs. Also, the Philippines has to spend more to produce the same calibre of professionals that will in time also leave the country.

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Thailand: Chalamwong (2008) argues that skill acquisition from working abroad is ambiguous. If the returned workers, having received technology from abroad, do not work in their previous occupation, they tend not to use the acquired skills. However, there has been clear evidence that the returnees do gain confidence and worldly experience which have an impact on their lives and future careers.

Social Effects Social consequences of the presence of foreign workers are a recurrent theme of public debate in labour receiving countries. A common allegation is that migrant workers contribute to crime and various diseases. There is also an element of racism and cultural protectionism in the objections to a large foreign worker presence in the economy and society. In the labour sending countries, concerns are over the treatment of their overseas workers by host countries such as physical and mental abuse and breach of contract between employer and employee including non-payment of wages, as well as fraud and exploitation by recruiting agencies at home. • Philippines: Tullao (2008) notes that overseas employment has its costs on social structures and value systems. Many of the Filipino entertainers in Japan, household maids, trainees and other workers in other parts of the world have been subjected to abuse and exploitation. The migrant worker’s absence from the family for long periods also affects family and marital life. Cases of abuse have destroyed lives of workers and their families. • Indonesia: Ananta and Arifin (2008) argue that migrant workers suffer from asymmetric information and are not well protected legally. The overseas unskilled and semi-skilled workers suffer from vulnerability and exploitation and abuse, often aggravated by their social and cultural backgrounds. Because of their lack of information and bargaining power, they may work as ‘undocumented’ workers and because they could not pay the administrative costs of migrating, they may become illegal workers, which increase their vulnerability. On the other hand, there have also been many success stories of overseas workers, able to raise the welfare of their families back home and/ or they themselves enjoy a better life in the host countries.

Labour Migration Policies and Practices Labour policies and practices vary between sending and receiving economies, and for each economy they vary between policies and practices toward flows of professionals and executives and flows of semi-skilled and unskilled workers. Much of the discussions on the negative impacts of foreign labour refer primarily to semi-skilled and unskilled migrant workers. Table 3.3 summarises the policy stance of individual countries toward ILM.

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Table 3.3. Summary of Government Policies Toward ILM Outflows Country Indonesia Malaysia Philippines Singapore Thailand Vietnam

Passive Policy

Inflows of Professionals

Active Intervention x

Passive Policy X

x

X

X

X X

x

Active Promotion x

x x

x

Inflows of Unskilled/ Semi-Skilled Passive Active Policy Management x x x x x x

Labour Sending Countries (Philippines, Indonesia, Vietnam) Government policies aim at (a) managing the volume and direction of labour flows, (b) pre-training of workers going abroad, and (c) protecting their rights and welfare. Managing the volume and direction of labour flows Governments encourage export of labour for reasons such as to alleviate unemployment and balance of payments pressures; to reduce the incidence of poverty; and as an alternative way of skills acquisition. Some governments have targeted policies to promote labour exports as a source of employment and foreign exchange earnings, while other governments leave labour migration to market forces and individual decisions. Governments trying to discourage the emigration of their skilled and professional workers in democratic societies have limited options. Efforts to discourage emigration include offer of dual citizenship, and special treatment for returnees. Several countries make special efforts to attract its diaspora. The most successful way of retaining its skilled and professional workers and encouraging those who had migrated earlier to return is through sustained high economic growth that raise wage levels and employment and business opportunities. • Philippines: Tullao (2008) states that the Philippines’ temporary labour migration management is considered a model in terms of best practices by other labour-sending countries. Overseas employment remains a legitimate option for the country’s work force. The Philippine migration management programme covers documentation, protection, social services, and human resources development involving 14 government agencies. • Vietnam: Huy (2008) explains that providing job opportunities abroad is a policy of the Vietnam Government. Policies have been revised in recent year and the July 2007 Law On Overseas Vietnamese Labour and Implementation decrees aims at a fuller and more comprehensive legal environment for labour exports and cover areas such as procedural simplification, fees and funding, pre-departure training, settlement of administrative violation of labour export businesses. Most provincial governments have set up labour export steering committees, issued policies and adopt different solutions to

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boost provincial labour export activities. There are more than 100 labour export enterprises licensed to export labour. In 2007 closer cooperation between local governments and labour export enterprises was reached, resulting in improved labour supply sources and reduced recruitment costs for workers. Pre-training of workers going abroad • Vietnam: Huy (2008) reports that the Vietnamese government has adopted a policy to push job training and orientation for migrant workers before getting a job abroad. The pre-departure training programme includes basic knowledge on Vietnam’s regulations and policies on overseas labour, law and customs of recipient countries and topics on work disciplines. In 2007, an allocation of US$1 billion from the government budget was targeted at improving workforce quality to make Vietnamese labour exports competitive with those from other countries. Over 50 percent of overseas workers have attended the vocational training courses. Huy (2008) argues that implementation of this policy has contributed to the improved quality of Vietnamese overseas workers. Protecting worker rights and welfare Labour sending countries have institutional mechanisms to protect migrant workers through licensing and surveillance of private recruitment agencies as well as country-to-country cooperation and policies to maximise the usage of remittances through various savings and investment schemes. • Philippines: Tullao (2008) reports that the government only deploys Filipino workers to countries where the rights of Filipino workers are respected. It (a) provides a mechanism to protect the rights of OFWs to fair and equitable recruitment and employment practices and to ensure their welfare under deregulated conditions; (b) develops programmes to ensure quality employment for OFWs; and (c) provides a provident fund for OFWs. The Philippine Overseas Employment Administration (POEA) grants licenses to recruitment agencies, regulates and monitors their performance, and prosecutes illegal recruiters. For the protection of temporary workers, mandatory life and personal accident protection are provided to all departing OWWA-registered and documented OFWs on a per contract basis. OWWA members are entitled to life insurance, disability and dismemberment benefits, total disability benefit and burial benefits. Repatriation programmes provided by OWWA cover scholarship programmes, skills for employment, education for development, and a seafarers’ upgrading programme. Bilateral labour agreements on better terms and conditions for land-based workers are being negotiated that include the promotion of the protection and welfare of OFWs, observance of terms and conditions of employment contracts, as well as provisions for further enhancement of these agreements.

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Labour Receiving Countries (Singapore, Malaysia, Thailand) Labour receiving countries have labour inflow policies that differentiate between unskilled and semi-skilled workers on the one hand and professionals and executives on the other. Their pro-active and cohesive policies are directed to (a) manage and control the inflow of unskilled/semi-skilled workers (b) manage and attract ‘brain’ inflows; and (c) control illegal inflows. Manage and control inflows of unskilled and semi-skilled workers • Singapore: Government policies and measures are targeted at minimising over-dependence on foreign labour include trying to reverse fertility decline; raising domestic labour force participation rates of women and older workers; industrial upgrading and relocation of labour intensive operations abroad; expanding tertiary education and training schemes to increase the domestic supply of professionals and skilled workers; training and retraining of older workers and redesign of 3D jobs to make them less unattractive and better paying. - Management of inflows of unskilled and semi-skilled foreign labour is through work permits. These are required for foreign workers earning a certain maximum salary (currently set at S$1,800 a month) and are valid for 2 years and normally renewable for up to 6 years. Work permit holders are admitted into Singapore strictly on a temporary basis for work. . - Each company will have its own quota of work permits depending on the foreign worker dependency ratio allocated by the government. The dependency ratios are varied from time to time. For the manufacturing sector it was set at a ceiling of 60 percent of a company’s workforce in 2007 and raised to 65 percent for 2008; for the service sector the ceiling was raised from 45 percent in 2007 to 50 percent for 2008; for the marine sector the ratio was raised from 3 foreign workers for 1 local worker in 2007 to 5:1 for 2008. Work permits are firm-specific. Companies employing work permit holders must pay a monthly per capita levy which currently ranges between S$150-S$450 per month, depending on the skills of the foreign workers and the dependency ratio of the companies concerned. - Since the late 1990s, the work permit has been fine-tuned to create another category of S-Passes, meant for mid-level skilled workers who are generally tertiary educated. The per capita levy for S-passes is $50 per month. The number of S-Pass holders a company can employ is capped at 25 percent of the work permit quota of the company’s total workforce. - Parallel to the foreign worker levy and dependency ratios to manage the inflows of work permit holders, the government has also introduced measures to help local workers through skill upgrading and re-design of jobs.

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Malaysia is both a labour-sending and labour-receiving country. Kanapathy (2008) notes that out-migration is predominantly of professionals and executives and is long term or permanent, while in-migration is almost entirely of low-skilled labour and temporary contract workers. Inflows of unskilled and semi-skilled workers were largely market determined until the mid-1980s. Their growing numbers led to policies to control and regulate their inflow. Initial intervention comprised the signing of bilateral MOUs with a number of countries. An explicit national policy was announced in 1995 to resolve the labour shortage in the manufacturing sector. Over the years, a number of policy instruments were introduced to: (i) control the intake of foreign workers; (ii) encourage legal recruitment; (iii) stem irregular migration; and (iv) protect foreign workers. These include the 1991 Comprehensive Policy on the Recruitment of Foreign Workers which covers the recruitment process, terms and conditions of employment and repatriation, introduction of an annual levy to offset social costs and discourage the use of foreign labour; the Regularization Programmes to legalize the entry and employment of undocumented workers without penalty, amnesty and the occasional imposition of a total ban on new recruitment. These measures were complemented by security operations to curb illegal entry and internal surveillance to arrest, detain and deport ‘undocumented’ migrants not responding to the registration exercise. Thailand: Growing labour shortages, particularly in agriculture, fishery, construction and domestic help since the early 1990s led to growing numbers of illegal migrant workers entering Thailand. Finally the government had to relax its policies concerning hiring low-skilled migrant workers by allowing illegal migrant workers to work temporarily under Section 17 of the Immigration Act. In order to provide better control and to manage the very large number of undocumented migrants, a new Alien Employment Act was enacted in 2008. This law changed the occupations that are allowed for foreign workers; provides for a levy on occupations; allows foreigners from neighbouring countries who enter by ‘Border Pass’ to seek temporary employment in Thailand; provides for work permits of 2 years (previously 1 year) and extendable by a further 2 years. This new law is more flexible in terms of management such as changing employer, location and duration and type of work than its predecessors. On protection of migrant workers, in principle all migrant workers shall receive the same treatment as Thai workers under the Labour Protection Law 2008, Social Security Law, and Workmen Compensation law.

Manage and attract ‘brain’ inflows With intensifying globalisation and emphasis on competitiveness, an increasing number of countries the world over are adopting specific policies and practices targeted at attracting foreign professionals and executives. In Southeast Asia the most comprehensive policy is in Singapore.

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Singapore: Unlike the restrictions placed on inflows of unskilled and semiskilled workers, inflows of professionals and executives are welcomed unreservedly to augment the domestic talent pool and expand Singapore’s population. Measures include liberal issuance of various employment passes, offer of permanent residence and citizenship, and making the working and living environments attractive to foreign expatriates. Professional and skilled foreigners seeking employment in Singapore require an Employment Pass (EP) for those who possess professional or tertiary qualifications and earning salaries of over S$2,000 per month. These are valid for up to 5 years and renewable. Unlike the case for unskilled and semi-skilled foreign workers, there is no foreign worker levy and no dependency ratio ceiling imposed on employing firms. But like the work permit, the employment passes are tied to specific firms. The EP has been fine tuned with the introduction of new types of passes: (a) The Personalised Employment Pass (PEP) applies to EP holders with a monthly salary of at least S$7000. It is not tied to any employer but requires the holders to inform the Manpower Ministry when they have changed employers. The PEP holder is able to remain in Singapore between jobs for up to six months to undertake job search; (b) The Professional Visit Pass (PVP) covers professionals who possess specialised skills such as commissioning new equipments or are involved in business arbitration or mediation services; (c) The Miscellaneous Work Permit (MWP) applies to three groups - key organisers of gatherings relating to religion, race or community, or any cause or political end, foreign religious workers giving talks about any religion, and foreign journals or accompanying crew not supported by any local government agency, who are here to cover an event or write a story; (d) The Work Permit (Performing Artiste) applies to foreign performers who want to work at a Singapore nightspot. Many foreign professionals have been granted permanent resident status and some have been given citizenship status. Permanent residents are usually from East Asia and South Asia. Singapore has established a reputation for ‘clean and safe living’ and this is a factor in many foreign expatriates choosing to locate and work in Singapore. Also, in recent years social restrictions have been relaxed to improve the ‘vibrancy’ of city life to cater to the lifestyles of Singapore’s local professionals, to attract foreign expatriates as well as to boost tourism. A growing number of Singapore professionals are also working abroad, reflecting the internationalisation of the Singapore economy and Singapore enterprises and the growing number of Singaporeans working for foreign MNCs. Some have chosen to settle permanently abroad, particularly in the advanced countries. However, the inflows of ‘brains’ far exceed the outflow of ‘brains’. Nonetheless, the government is concerned over the ‘loss’ of the domestic talent pool and have supported networks to connect them with Singapore in the hope that they may one day return. Malaysia: Out-migration of professionals and executives began shortly after political independence in 1957, with Malaysians leaving for work and

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settlement. Kanapathy (2008) notes that in recent years there is also a trend of temporary or circular migration of professionals and executives in search of better economic opportunities. A policy focus on emigrants began only in the mid-1990s when the Malaysian economy experienced skill scarcity that was perceived to be hampering structural transformation towards higher value-added growth. The Brain Gain Scheme was introduced in 1995 to encourage return migration of Malaysian professionals. But the Scheme was not very successful and lapsed during the Asian financial crisis, as wages and working conditions at home remained unattractive to Malaysians working abroad. The scheme was re-introduced in 2001. Alongside this Scheme, a ‘distance service’ programme has been introduced to solicit the services of Malaysian professionals overseas, without the need for return migration. In-migration of professionals and executives is small in number (less than 2 percent of the total foreign worker inflow in 2007). There are policies to encourage and facilitate their entry and employment, reinforced in recent years by the strategy of upgrading skill and knowledge-intensive industries. These expatriates are allowed to work in almost all sectors, except those that impinge on national security and some restrictions are imposed on their numbers in banking and finance. However, manufacturing, firms located in the various Economic Growth Regions can hire as many expatriates as required. Thailand: Chalamwong (2008) reports that Thailand has established procedures for the entry of expatriates to work in BOI-promoted firms, that is for foreign nationals to undertake investment feasibility studies, and foreign technicians and experts to work in promoted firms. The majority of joint ventures with FDI under BOI coverage are Japanese, British, and American and hence work permits are issued for nationals of these firms. The largest share of occupations of foreign workers who received work permits are managers and executives, followed by elementary occupations and professionals.

Control inflows of irregular workers To control the growing problem of undocumented and illegal workers, several labour receiving countries have introduced policies and measures that penalise these workers as well as their employers and purveyors and which have tightened entry and surveillance of borders. In addition to long-standing economic and social problems posed by these irregular migrants, there are growing national security concerns. • Singapore: Chew and Chew (2008) note that Singapore has adopted a strong stand against illegal guest workers. It is illegal to overstay work permits by more than 90 days in Singapore. Locals who harbour and/or employ illegal immigrants and over-stayers are also punished. These stringent measures have at times ruffled diplomatic relations with origin countries. • Malaysia: Kanapathy (2008) argues that managing cross-border labour mobility is exceedingly difficult for Malaysia that has a fast growing

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economy situated in the midst of labour surplus economies, has a very long coastline and a porous border; has a multi-ethnic population and cultural similarities with many of its source countries making it difficult to identify and apprehend illegal immigrants; and the migrant workers find ready employment in Malaysia’s informal sector or in remote plantations and forested areas. Thailand faces influxes of foreign workers from cross-border flows from Myanmar, Laos and Cambodia to the agriculture and fishery, construction, and services sectors. Chalamwong (2008) identifies a series of measures which the Thai government has taken: - Foreign worker registrations have been carried out periodically, granting lenient treatment and work permits to illegals in various provinces, sectors and occupations. - The new Employment Act in 2008 recognizes the hiring of unskilled and semi-skilled workers in occupations and areas specified by the Labour Ministry as well as introduce the imposition of a levy on employers, and registration fee on foreign workers. In preparation for implementing the new Law, the government decided to extend the existing work permits as well as allow the illegal workers who hold registration documents to reregister and to renew their work permits.

Regional and Bilateral Cooperation on Labour Migration The rising trend of ILM and the issues and concerns that arise from it cannot be resolved by unilateral efforts alone and require regional and bilateral cooperation between sending and receiving economies. Cooperation is needed to deal with broader common issues and concerns such as collection and sharing of data on cross-border flows, portability of pension benefits, mutual recognition of national professional and technical qualifications, protection of worker rights and welfare, and dealing with problems of illegal migration.

Provisions on ILM in Regional Agreements (Chia 2006) 4 3

Labour sending countries are keen to lower the barriers to ILM, while labour receiving countries have asymmetrical policies, restricting the inflows of unskilled and semi-skilled workers on the one hand and welcoming inflows of professionals and executives on the other, APEC: APEC has agreed on measures that facilitate the mobility of professionals and business persons. Specific objectives are to simplify shortterm entry arrangements for business visitors; streamline processing for skilled persons seeking temporary residence; develop transparent regulatory arrangements to allow for seamless cross border movement; and develop MRAs for specific professions and occupations. 4

This section draws heavily on Chia Siow Yue. ‘Labour Mobility and East Asian Integration’ in Asian Economic Policy Review, volume 1, number 2, December 2006.

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The APEC Business Travel Card Scheme simplifies the entry of cardholders into the participating countries (with special lanes at airport immigration control), and reduces the time and cost for applying for entry visas and permits. • APEC has also agreed on a service standard for processing applications for, and extensions of, temporary residence permits for executives, managers and specialists transferred within their companies to other APEC economies. • The APEC Advanced Passenger Information (API) systems enable all passengers to be processed in advance of arrival in destination countries by instituting a check at the point of checking in to board aircrafts and sea vessels at the point of origin. • APEC has also initiated Mutual Recognition Arrangements (MRA) for certain occupations and skills to facilitate international and regional labour mobility. RTAs and ASEAN: Existing regional trade arrangements (RTAs) and agreements do not all have provisions to facilitate movement of natural persons, reflecting the difficulties in addressing ILM. RTAs which do not provide for full labour or service supplier mobility tend to use GATS type carve-outs and generally exclude permanent migration and access to the labour market; also they do not impinge on countries’ rights to regulate entry and staying of individuals. The RTAs tend to replicate two key biases found in GATS V, namely, favouring highly skilled and professional workers; and closely linking investment with specialised skills such investments require. The ASEAN region contains both major labour sending and receiving economies, so there would appear much to be gained from regional cooperation. However, sensitivity to the migration issue has prevented much cooperation to date. • The 1995 ASEAN Framework Agreement on Services (AFAS) provides inter alia, for regulatory convergence and regulatory harmonisation, including Mutual Recognition Agreements. ASEAN countries may recognise the education or experienced obtained, requirements met and licensing or certification granted by other ASEAN countries. However, progress in Mode 4 on movement of natural persons and progress on mutual recognition arrangements (MRAs) has been slow. The Bali Concord II in 2003 called for completion of MRAs for qualifications in major professional services by 2008 to facilitate free movement of professionals and skilled labour within ASEAN. • Cooperation is still limited on core migration issues such as orderly recruitment of migrant workers; protection of the rights of migrant workers; facilitating circular migration; facilitating remittance flows and harmonisation of migration information collection. The terrorist attacks of 11 September 2001 have raised concerns over the security threat of labour migration, and regional cooperation is needed to ensure regional and national security. • The ASEAN Economic Community to be realised by 2015 includes only free movement of skilled labour. •

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It allows for managed mobility or facilitated entry for movement of natural persons engaged in trade in goods, services and investment through facilitating the issuance of visas and employment passes for ASEAN professionals and skilled labour engaged in cross-border trade and investment related activities. - It facilitates a free flow of services through harmonisation and standardisation to facilitate their movement within ASEAN. This entails completing MRAs in various service occupations; enhanced cooperation among ASEAN University Network members to increase mobility of students and staff; develop core competencies and qualifications for job/occupational and trainers’ skills required in the services sectors; strengthen the research capabilities of ASEAN countries in terms of promoting skills, job placements and developing labour market information networks among ASEAN countries. Examples of FTAs with ASEAN countries with labour mobility provisions are: - The US-Singapore FTA (USSFTA) provides for mutual consultation on acceptable standards and criteria for licensing and certification of professional service providers. For professional services, Singapore will ease conditions on US firms creating joint law ventures to practice Singapore law; recognise degrees earned from 4 US law schools for admission to the Singapore bar; reduce board of director requirements for architectural and engineering firms; phase out capital ownership requirements for land surveying firms; both sides will engage in consultations to develop mutually acceptable standards and criteria for licensing and certification of professional service providers, especially with regard to architects and engineers. For movement of business persons, the following conditions apply to Singapore citizens: for business visitors, 90 days; intra corporate transferees with L1A and L1B visa are allowed up to an initial period of 1-3years; an extension up to a maximum of seven years may be allowed; traders with E1 or E2 visa are allowed a two-year maximum stay period with indefinite extension also allowed; professionals with H1B visa are allowed to stay for a maximum period of up to18 months; indefinite extension is also allowed but an annual quota of 5,400 visa for Singaporeans applies. - The EPAs between Japan and some individual ASEAN countries have specific provisions on labour mobility into Japan. The Japan-Singapore EPA has chapters on the movement of natural persons, specifically for business purposes, that is business visitors, intra-company transferees, and certain categories of investors and professionals. The EPAs with the Philippines, Thailand and Indonesia include provisions on the movement of natural persons or Mode 4, in particular for entry and employment in Japan of limited numbers of Filipino nurses and care givers; Thai cooks, care workers, spa therapists and instructors of Thai dance, music, cuisine, language and boxing; and Indonesian healthcare givers.

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Policy discussion to reduce illegal migration was included in the GMS Economic Cooperation Framework and later under the larger Aerawadee Chaopraya Mekong Economic Cooperation Strategies (ACMECS).

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Philippines (Tullao 2008): The government has signed bilateral labour agreements with 13 countries since 1974. These agreements are of two categories: labour recruitment and special hiring agreements, and labour, employment and manpower development agreements. They cover terms and conditions of employment and mobilization of Filipino workers; exchange of trainees; promotion of cooperation on labour, employment and manpower development; protection of the rights of migrant workers including legal assistance; training and certification of migrant workers; exchange of information, materials and experiences; and development of collaborative training. In 2003 a bilateral labour agreement was signed with Indonesia, another labour sending country. It is the first successful attempt by the Philippines to try to consolidate the efforts of other labour sending countries in the region towards promoting the welfare of migrant workers and protecting their rights. More recently, the Canadian province of British Colombia has signed a MOU with the Philippines to help fill its need for 350,000 skilled workers over the next 12 years, providing more effective access for temporary work in the tourism and hospitality, retail, and construction industries. The recruiters will ensure that potential workers pass the medical examination required for temporary or permanent residents, have no criminal record or outstanding custody or divorce dispute that might make them ineligible to become residents, have satisfactory English language skills, and possess the skills and knowledge sought by potential employers. Additionally, France is keen on easing its labour migration rules for Filipinos especially those who are in the electronic, information technology, and health care industries. Thailand (Chalamwong 2008): The agreement with Taiwan focused on the problem of excessive high brokerage fees paid by Filipino workers, and limited the amount chargeable by Taiwanese and Thai brokers. Also, the Thai government has founded the Friends of Thai Workers Association Office to act as intermediary between Thai government agencies and Thai workers in Singapore and to provide the workers with psycho-medical, recreational and educational services. Malaysia (Kanapathy, 2008) Malaysia has established bilateral cooperation with its major labour sending countries. Apart from regular dialogue sessions on labour issues, MOUs with these countries cover terms and conditions of employment in Malaysia, practices of recruiting labour agents and the establishment of Joint Working Groups to discuss matters arising from the implementation of the MOU. Malaysia has also initiated the establishment of several growth triangles and worker mobility in these

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growth triangles has been facilitated through the use of the ‘smart card’ systems and movement via special lanes to avoid long queues.

Proposals on Regional and Bilateral Cooperation on Flows of Unskilled and Semi-Skilled Labour The authors of individual economy papers made a number of policy recommendations and these are summarized below. • Philippines (Tullao 2008): Some of the areas for regional cooperation should include liberalization of immigration policies, convergence of domestic policies pertaining to the employment of foreign workers, decreasing the cost of migration, human resource development, brain drain tax, increasing the incentive for return migration and protection of migrant workers. - Access issues: These include immigration policies and the domestic regulatory frameworks of labour-importing countries that restrict the entry and employment of foreign workers. There are also cultural and language barriers. Funding is also an access issue since migration is a costly investment in human capital. For regulatory measures, liberalization of immigration policies to allow ease in the movement of workers can be explored at the regional level. Technical barriers such as language and cultural barrier can be addressed through technical assistance from host countries to sending countries on the funding and provision of language training programmes and inter-cultural seminars. Convergence of regulatory measures in the region through MRAs will allow recognition of educational qualifications, training, work experience and licensing exams so that professionals can easily work within the region. There should also be a discussion on limiting the levies imposed on foreign workers, as countries that charge higher levies on less skilled workers make it costlier and difficult for the poorer segment of society to participate in reaping the benefits of overseas employment. - Protection issues refer to the working conditions in host countries so that foreign workers are not exposed unduly to exploitation, abuse and maltreatment. Although these protection issues are addressed bilaterally, the region through the initiative of the ASEAN+3 and the ILO can discuss the establishment of a framework agreement towards the protection of foreign workers. - Impact issues refer to the negative consequences that temporary ILM may bring to the family, community, and the sending and receiving countries. This may result in brain drain, over-expansion of education, and the appreciation of the real exchange rate due to the remittances received by the sending country, and the impact of foreign workers on the social services and inter-cultural conflicts borne by the importing country. Sending countries may adopt measures to mitigate the impact of remittances on the real exchange rate – through re-channelling

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expenditures towards investment and increasing the production of nontradable goods including education and health. On the brain drain issue, sending countries should be compensated for the loss in human resources. Compensation is needed for sending countries that are losing health professionals due to migration. Moreover, with the loss of these health professionals, the health sector of the sending country is imperilled and therefore should be given assistance. The issue of a brain drain tax to compensate the sending countries can be tackled at either a regional or global level. Since movement of workers is based on the quality of human capital, if there is cost differential in the training, importing countries should assist in the educational system of exporting countries. On the issue of returning migrants, although this is the problem of the sending country, the receiving country can assist migrant workers with skill acquisition that can be utilized when the migrants return to their home countries. This will facilitate return migration and may also solve the problem of overstaying and seeking permanent residence in the host countries. There should be discussions on how to make return migration an attractive option for temporary foreign workers. For example, they can given attractive retirement/social security benefits that they can use if they return to their home countries. In view of the difficulty of successfully negotiating formal multilateral and bilateral agreements on migrant workers, alternative mechanisms could be employed by sending countries to protect their workers: A joint liability between local employment agency and foreign employer could be implemented. RA 8042 of the Philippines stipulates joint liability between the local employment agency and the foreign employer for violations of the foreign employer. There should be selective deployment ban to countries violating workers’ rights. There should be a formulated standard model of employment contracts. There should be a ratification of migrant worker instruments. The Philippines is the model in Asia, having ratified all three international migrant worker convention namely 2 ILO Conventions and 1 UN Convention. Governments should push migrants’ rights and migrant protection standards in international forums such as APEC. A steering committee of senior officials of both sending and receiving countries could be established, to meet at least once a year to review the MOU and to coordinate the implementation of programmes. Joint working groups could also be established in receiving countries to promote and protect the welfare and rights of their migrant workers. These joint working groups could meet regularly and pursue programmes in close coordination with the steering committee.

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Indonesia (Ananta and Arifin, 2008): Migration of semiskilled and unskilled should be managed so as to cover all stages of migration, that is, recruitment, employment, and post-employment. It should cover the following issues: - Good governance: Recruitment, employment, and post-employment must follow the principles of good governance, that is, be accountable, transparent, and subject to public monitoring. Good governance includes enactment and implementation of laws that protect and promote the rights of workers. It also means corruption free administration. Then workers can be ensured, for example, to have to the right to hold their own passports and transportation tickets and should have the rights to have off-days. Their status as low-skilled workers should not make it difficult for them to re-enter countries in the future. While the Indonesian government has taken steps to protect and promote the rights of the Indonesian overseas workers, it should not restrict returnees to Terminal 3 at the Jakarta international airport. Close collaboration among government, mass media, members of parliaments, scholars, and NGOs of both sending and receiving countries must be promoted. - Market mechanism: Sending countries must ensure that there are jobs available for migrant workers so as to reduce the possibility that the migrant workers are stranded without employment at their destinations. Better management of recruiting in the sending countries will also reduce the likelihood of abuse and manipulation by labour recruitment agencies. The workers must know where to voice their complaints. To reduce the ‘excess’ demand for foreign workers in the receiving countries, laboursaving methods should be adopted or else raise the price of foreign workers. Better information will help improve labour market efficiency, and workers and employers should have easy and cheap access to relevant information, including access to legal aid. IT can be used to change the culture, politics, and business of overseas workers. - Migration as a business: Various businesses and agencies in both sending and receiving countries are involved in the lucrative business of recruitment, employment, and post-employment of migrant workers. In countries such as Indonesia, workers are regarded as a ‘strategic non-oil export commodity’. It is recommended that no country consider workers as an export commodity. Businesses should realise that the protection and promotion of the rights of the workers will enhance their profits, that social responsibility can be compatible with profit maximisation. Indonesia must revise its 2004 law that explicitly stipulates that the recruitment, employment, and post- employment of overseas workers are business entities, to one that regards these activities as a social mission instead. Thailand (Chalamwong 2008): Questions and issues of concern are – adherence to international labour standards; ratifying international conventions on migrant workers; how to monitor migration flows in the region who should be responsible for regional creation of monitoring system; how to interact among researchers and policy makers in gathering

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data and sharing information; how to build cooperation among receiving and sending countries and interested international agencies; how to come up with financial support for the continuation of research on migration issues, and cooperation; how to improve the existing and new initiatives of regional and bilateral cooperation and agreements; how to make use of existing organizations such as ASEAN, APEC, and ASEM to come up with periodic consultations and information gathering to address these issues; how to strengthen the existing initiatives such as the Bangkok Declaration; how to promote networking among parties involved with migration in both sending and receiving countries; how to remedy problems of illegal migrants, trafficking of women and children; should bilateral and multilateral agreement be made among sending and receiving countries to remedy the problems of illegal migrants together; and can we strengthen the implementation of technical cooperation for dealing with all of trafficking issues.? - On better management and protection of migrant workers: The sending and receiving countries should have joint data and information systems concerning job placement to facilitate the recruitment in the source country. A database on job vacancies and returnees should also be jointly established. Standardized occupational competency or skill standards should be established among interested countries and such competency standards should be linked with pay (competency-based payment) in order to facilitate the flow of migrant workers. Sending and receiving countries need to provide full protection to migrants while they are travelling to the country of employment and during the subsequent return to the origin country as well as while they are in employment. There should be a joint task force of sending and receiving countries including relevant officials, volunteer workers and NGOs to protect migrant workers at destination countries. There should be bilateral or multilateral establishment of training programmes for prospective migrant workers before departure and while working so that migrant workers can be readily integrated into the host society. Bilateral agreement between sending and receiving countries on strict enforcement of laws pertaining to private placement agencies in order to guarantee transparency. Explore possibility of having portable social security and tax systems. - On management of illegal migrants in GMS (Greater Mekong Subregion) countries: For better management of migration among GMS countries, the countries need to share data on the economic contribution of migrants; data related to implementing of the policies such as level of costs of registration fees, levy rates, brokerage fees, and cost of remittances; and data on return migrants, such as the best use of remittance, skill transfer, access to local jobs and to help returnees integrate into their own communities. To provide better protection and

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quality of lives for migrants, the network countries need to agree on how to secure access to public health services or social security services, social and community services. There is a need to develop and to implement public awareness and education campaigns for those interacting with migrant workers. There is a need for assistance to lower income exporting countries to build up their capacity to provide better management of migrant workers. Malaysia (Kanapathy 2008): Bilateral arrangements with large labour sending countries are useful tools for tackling outstanding migrant labour issues peculiar to the bilateral cross-border labour flows, such as between Malaysia and Indonesia. There is substantial scope for regional cooperation for dealing with broader common issues and concerns such as collection and sharing of data on cross-border flows, tackling human trafficking, portability of pension and health insurance schemes, recognition of national technical and professional qualifications, etc. These issues can be included into the agenda of existing regional co-operations such as ASEAN, APEC, and the EPAs. Private business organisations such as ABAC can also champion the need to address key cross-border labour issues. Singapore (Chew and Chew, 2008): Foreign low skilled workers in Singapore have to pay high fees to labour agencies in both sending and receiving countries as well as a range of administrative costs. Perhaps a Joint Committee between receiving and sending countries, for example between Singapore and Indonesia, could be established to see how such payments could be moderated and how issues such as housing conditions, wage payments, and health insurance could be resolved. Also, foreign workers may not be aware of the many stringent policies in Singapore with regard to overstaying and illegal work and the Joint Committee could look into better provision of information to intending migrants.

Conclusion ILM is a feature of economic life in Southeast Asia. Labour deficit countries need to have access to foreign workers while labour surplus countries need to find overseas employment for their workers. It would appear that there is a ‘coincidence of needs’ and there is a potential win-win situation for both sending and receiving countries. Yet there are concerns over several issues pertaining to ILM. The following are recommendations for cooperation between sending and receiving countries.

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It is important to ensure that all stakeholders (governments, businesses, employers, labour unions and migrant workers) gain from ILM. Receiving countries should ensure that foreign workers in their midst are accorded the ‘national treatment’ that local workers receive, that is protection under the laws of the country. Receiving countries such as Singapore, Malaysia and Thailand, also impose levies and quota restrictions

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to control the negative effects of large inflows of foreign workers, such as competing with local labour for jobs and competing with local consumers for public services and to safeguard national security. Receiving countries should inform sending countries of the existence of these policies and measures and of the changes made from time to time. Sending countries are obviously unable to provide the jobs and wages that trigger the flows of workers overseas. Nonetheless, the governments are responsible for the welfare of their citizens abroad and have to prevent their exploitation by labour recruitment and placement agencies at home and abroad, ensure fair employment contracts, prevent abuses and exploitation, offer consular assistance to migrant workers facing problems, and help migrant workers re-integrate when they eventually return home. Sending governments are also expected to counter the effects of remittances on their exchange rates with appropriate monetary and fiscal policies. A free flow of labour across countries is not a feasible option at present as evidenced by the difficulties in gaining its acceptance in multilateral and regional negotiations. It should be noted that even today, after decades of multilateral negotiations, there is no free flow of labour in the WTO, only limited flows allowed under GATS Mode 4 on ‘movement of natural persons’, primarily business persons, professionals and intra-corporate transferees. What is feasible in Southeast Asia is a ‘freer’ flow of labour by removing unnecessary institutional and policy impediments to the number and types of workers that receiving countries are prepared to accept. There are many issues and concerns that can be addressed unilaterally by sending and receiving countries without the need for bilateral and regional cooperation. These include policies to promote domestic economic and employment growth to minimise the need for workers seeking overseas employment in labour surplus countries; policies to reduce dependence on foreign labour by labour deficit countries; signing and ratification of international labour and migration conventions of the ILO; controlling the exploitative fees paid to local governments and labour recruitment and placement agencies; facilitating the inflows of worker remittances; and encouraging the return of migrants and diaspora.

Recommendations for Bilateral and Regional Cooperative Action •

Cooperation to improve information flows: - Sending and receiving countries, employers and migrant workers can all benefit from better transparency and information exchange on the laws, regulations and procedures that govern cross-border flows of workers. Information programmes are needed to familiarise would-be migrant workers with laws and regulations, value systems and customs of their host countries to help them stay within the law and assimilate. These would include basic instruction in the languages of the host countries and helping the migrant workers develop their own social networks.

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Migrant workers should be made fully aware of the employment contracts they enter into. Wherever possible, a model standard contract should be drawn up with the common agreement of the respective governments, stipulating the terms and conditions of employment and ensuring their implementation. Cooperation to recognise and further develop the skills of migrant workers: - Establishment of mutual recognition arrangements of national qualifications and standards; development of common standards and licensing requirements. - Help migrant workers develop their skills through pre-employment training and on-the-job and off-the-job training. For some occupations and workers, pre-training would be necessary. Cooperation would cover the establishment and funding of these training facilities. In other cases, there is need for mutual recognition of national qualifications and standards for various occupations or the setting up of common standards testing facilities. - A key issue with sending countries is the loss of their professional and skilled labour when they work abroad, leading to demands for ‘compensation’ of the investment in human capital foregone by the receiving countries,. Some argue that ‘compensation’ in the form of remittances sent home and subsequently in the form of acquisition of skills, investment resources, and business networks by the returnees are regarded as inadequate ‘compensation’. Cooperation can help facilitate the portability of social security benefits and pension funds payable to the migrant workers. Receiving countries could also help with human resource development in the sending countries by offering scholarships and helping to fund training facilities. Cooperation to improve the protection and adjustment of migrant workers in the recruitment, employment and post-employment phases: - Reduce the transaction costs and exploitation faced by migrant workers when seeking employment abroad such as – high costs of passports and visas and other fees charged by local governments and agencies; exploitation by recruitment agencies in both sending and receiving countries that charge high administrative fees and collect double from both the employer and migrant worker; false promises of employment made by labour recruitment agencies in sending countries that leave migrants stranded and without employment on arrival. - Reduce abuses and exploitation at places of employment - these include non-compliance with the labour laws of the host country; mis-treatment of the workers, non-payment of wages. Cases of physical abuse should receive consular help and be punished according to the laws of the receiving country. - Reduce exploitation by unauthorised agents in sending and receiving countries in the sending of remittances.

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-

•

Organise social networks for migrant workers and help them with language and cultural assimilation problems. - Improve migrants’ extension of their temporary employment contracts. These would help migrants recoup their earlier transaction costs and give them some job security. Employers would also prefer to retain workers that are trained and experienced. - Improve the employability and adjustment of migrant workers when they return home - acquisition of skills to prepare for eventual return to home countries; placement services and entrepreneurial services in home countries to ‘resettle’ the returnees. - Ensure the compliance of migrant workers and employers alike with the laws of the host countries and signed international conventions, and terms of the employment contracts. A joint-committee should be established to monitor compliance, adjudicate on disputes and if necessary help the migrant workers seek legal redress. Cooperation to resolve problem of illegal migrants: - Improve transparency and lessen the bureaucratic and documentary requirements for legal entry and employment; improve information flow on the penalties for irregular entry and employment and also their employers; exchange of information between governments on illegal migrants and joint action in the deportation of these workers and their return to their home country without prospects of circular migration.

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Chapter 4 Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation Graeme Hugo 5 Paul Callister 6 Juthika Badkar 7 4

5

6

Introduction Australia and New Zealand differ have an extended history of an immigration program managed by government and which has focused until recently on the encouragement of permanent settlement of families. While there has long been provision for workers in specialised areas to enter on a temporary basis, this situation has changed in recent years with greater provision being made for nonpermanent migration of workers in the immigration programs. They are among the few countries in the region, however, that have had, and are likely to continue to have, sustained official programs of attracting migrants to settle, albeit on a planned and selective basis. Australia and New Zealand drew the bulk of their immigrants from Europe in the three decades following World War II. Overwhelmingly the main type of international population movement was of more or less permanent migration. In the contemporary situation the drivers of international migration have changed and as a result the international population movement influencing Australia and New Zealand also have changed. Non-permanent migrants are more significant, and Asia and the Pacific have become important origins for both permanent and temporary migrants. As with other OECD countries, low fertility and ageing have begun to place pressures on the labour market and, together with buoyant economic conditions in recent years, have created shortages of skilled and unskilled labour. These shortages are likely to continue and intensify in the future and the challenge of meeting them has become an important issue. Policies of increasing labour force participation rates, extending the retirement age and bringing groups with low engagement into the labour force are being 5

6 7

Department of Geographical and Environmental Studies, University of Adelaide, Adelaide. Institute of Policy Studies, Victoria University, New Zealand. Department of Labour, New Zealand

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Graeme Hugo, Paul Callister and Juthika Badkar

initiated but immigration will continue to play a major role in meeting these shortages. Few countries in the world have been as influenced by migration as Australia and New Zealand. Figure 4.1 shows that both countries figure prominently in the contemporary world with the largest numbers of immigrants and with high rates of permanent migration. In both countries half the population was either born in a foreign country or has a parent who was born overseas. Moreover both countries figure among the world’s major countries of emigration (United Nations 2006a). New Zealand is unique in the OECD having the highest per capita rate of both immigration and emigration. Figure 4.1. Permanent-Type Inflows, Standardised Statistics, 2005 (Number per thousand persons in the population) 16

NUMBER PERSONS (Thousand)

14 12 10 8 6 4 2

New Zealand

Australia

Switzerland

Austria

Canada

Sweden

United kingdom

Norway

United States

Belgium

Netherlands

Italy

Denmark

France

Finland

Portugal

Germany

Japan

0

Source: OECD 2007, p. 37

Australia and New Zealand have excellent international migration information with respect to both stock and flow information. The main source of stock data are the quinquennial population censuses, which contain a series of questions which relate to the overseas-born population of the nations and their descendants. The main source of flow data is derived from arrival and departure cards completed by all people entering and leaving Australia and New Zealand. The key point here is that both countries collect information on all people leaving the country as well as those arriving so they are among the very few countries that can accurately establish the scale and composition of emigration as well as immigration. Moreover the island geography of both countries means that they are able to control migration more easily than if there was a land 132

Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation

border so levels of clandestine migration are extremely small. 8 Both countries also have national longitudinal surveys of settler arrivals which investigate among other things the labour market adjustment of recent settlers. This paper begins with a discussion of the demographic and economic context of New Zealand and Australia which is so influential in shaping migration of labour. There is then a brief consideration of the historical evolution of international migration policy in the two countries. One of the features of both countries is the long history of immigration policy and the high level of micro management of immigration. In both countries however there have been two major shifts in immigration policy over the postwar period – the opening up of immigration to non-Europeans in the 1960s and 1970s and the development of substantial non-permanent immigration avenues in the 1990s. The next sections trace trends in first permanent immigration and then nonpermanent movements. We then consider some of the major contemporary issues in labour migration facing the two countries. Finally some of the future migration challenges facing Australia and New Zealand are canvassed. This includes a discussion of low skill migration and, not unconnected with low skill migration, possible future links with Melanesia. Although individual nation states with quite separate and distinct immigration policies, Australia and New Zealand have had shared values with respect to international migration and their policies have followed, for the most part, similar paths. In addition they share a similar location on the south eastern edge of Asia and the south western edge of the Pacific. Moreover they enjoy a special bilateral international migration relationship which allows more or less free movement between the two nations so that New Zealand is a predominant destination and origin for emigrants from and immigrants to Australia and the reverse is true for Australia (Hugo 2004a). It has been argued in fact that for many purposes Australia and New Zealand constitute a single labour market. This is reflected in the fact that New Zealand immigrants in Australia more closely resemble Australian internal migrants than they do the immigrant population from other countries (Hugo 2004b). Hence while they have separate policies there are also some good reasons for examining them together when considering international migration in the APEC region. 7

The Demographic and Economic Context Australia’s population in mid 2007 was 21,017,200 representing 0.32 percent of the global population and is currently (2006-07) growing at a rate of 1.5 percent per annum – around the rate of global population growth and one of the fastest in OECD nations. Of the annual population growth of 315,734 persons, some 56 percent was attributable to net migration gain (ABS 2007). New Zealand is significantly smaller with a population of 4,228,300 in 2007 and is growing at 1.04 percent per annum of which net migration makes up 24 percent. 8

Although in both countries there are problems with overstayers who remain beyond their visa’s eligibility date and others who enter as tourists but defy the conditions of their visas and work.

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In June 2006 (ABS 2006) Australia’s unemployment level fell below 5 percent for the first time since the current data collections on unemployment began. This partly reflects the fact that Australia has experienced an extended period of economic growth since the recession of 1990-91. In recent years the mining boom fuelled by the industrial expansion of China has been an important element. However the tightening of the labour market is also partly a function of ageing of the Australian population. In New Zealand the December 2007 quarter unemployment rate at 3.4 percent was at its lowest level since the Household Labour Force survey began in March 1986. The survey also recorded the highest number of people in employment and in the labour force, as well as the highest labour force participation rate (Statistics New Zealand 2007). Ageing of the workforce will not be as great in Australia and New Zealand as in many OECD nations and it will come somewhat later. This is due to the profound effect of the baby boom on Australia’s demography. In Australia baby boomers make up 27.5 percent of the adult population – a higher proportion than in most other nations. As a result, as they move into retirement, the low fertility of their children means that the net increase in the workforce will begin to reduce. Hence, Table 4.1 shows that Australia’s population aged 15-64 will increase by only 2 million over the 2003-31 period while those aged 65+ will increase by 3.2 million. There has been increasing pressure bought to bear on the Australian and New Zealand governments to increase immigration in response to a perceived tightness in the labour market and reported shortages of workers in key areas. Table 4.1. Projections of Australia’s Aged and Working Age Population Number by Age Year 2003 2011 2021 2031 2003-11 2011-21 2021-31

0-14 3,981,538 3,840,000 3,752,700 3,826,400 -0.45 -0.23 +0.19

15-64

65+

13,344,685 2,546,423 14,532,900 3,155,600 15,172,300 4,443,400 15,348,100 5,741,000 Annual Growth Rate (%) 1.07 2.72 0.43 3.48 0.12 2.60

Total 19,872,646 21,524,200 23,368,400 24,915,500

65+ as % 15-64* 19.1 21.7 29.3 37.4

+1.00 +0.83 +0.64

* The ratio of 65+ as % 15-64 for New Zealand in 2031 is projected to be 35% Source: ABS 2003 and 2004

Developments in Immigration Policy While both Australia and New Zealand have a long and sustained history of immigration it has been in the post-World War II period that immigration has been especially significant. This is especially evident in Australia as is evident in Figure 4.2. The post-war period clearly shows out as an exceptional era in

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Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation

Australia’s immigration history in terms of its scale. However, it also saw for the first time in national history a large-scale in-movement of immigrants from outside the United Kingdom and Ireland. This is evident in Figure 4.3 which shows the breakdown of origin regions of post-war immigrants to Australia. The UK remained the main single source of immigrants but its share dwindled from being the overwhelming majority in the pre-war period until in some years of the 1990s it lost its place as the largest single source of immigrants. In fact for much of the post-war period the UK-Ireland remained the major underlying source of immigrants while there were a series of successive waves of immigrants from particular non-English speaking regions. The immediate postwar period saw the arrival of substantial numbers of displaced persons (DPs) from Eastern Europe. This was followed by waves from the Netherlands and Germany, Italy, Greece, the Middle East and finally in the late 1970s substantial flows from Asia commenced and still continue. Figure 4.2. Australia: Total Population Growth Showing the Natural Increase and Net Migration Components, 1901-2007 350,000

300,000

250,000

200,000

150,000

100,000 Natural Increase

50,000

0

-50,000

Year

Source: ABS 1986 and ABS Australian Demographic Statistics, various issues

135

2006

2001

1996

1991

1986

1981

1976

1971

1966

1961

1956

1951

1946

1941

1936

1931

1926

1921

1916

1911

1906

-100,000 1901

Persons

Net Migration

Graeme Hugo, Paul Callister and Juthika Badkar

Figure 4.3. Australia: Settler Arrivals by Region of Last Residence, 1947 to 2006 300000

250000

Number

200000

150000

100000

50000

2003-04

2000-01

1997-98

1994-95

1991-92

1988-89

1985-86

1982-83

1979-80

1976-77

1973-74

1970-71

1967-68

1964-65

1961-62

1958-59

1955-56

1952-53

1949-50

*1945-47

0

Year

UK and Ireland

Other Europe

Africa

Americas

NZ and Pacific

Middle East

Asia

*July 1945 to June 1947

Source: DIMIA, Australian Immigration: Consolidated Statistics, various issues; ABS, Migration Australia, various issues; DIAC, unpublished data

These patterns reflect some significant shifts in immigration policy over the last half-century. In the aftermath of World War II there were major labour shortages in the newly expanding manufacturing sector as well as in traditional areas like agriculture. This allied with some continuing notions of ‘populate or perish’ associated with perceived threats of invasion from the north which were strengthened by the Pacific War saw government press to increase immigration. When this demand could not be met from traditional British sources, the government assisted over 300,000 Displaced Persons (DPs) from Eastern Europe to settle in Australia, breaking down a previous almost exclusive orientation on the UK and Ireland. The success of the DPs led to an extension of the immigration program to other parts of Europe. The 1970s saw several major shifts in the immigration policy. Firstly, for the first time since World War II, Australia began to experience substantial levels of unemployment with structural change in the economy, the movement of manufacturing offshore and the entry of the baby boom cohorts into the labour force. This saw immigration policy move from an emphasis on the recruitment of semi-skilled and skilled workers for manufacturing to a more complex program containing the following components: • Economic migration – attraction of people with skills in demand in Australia. • Family migration – relatives of Australian residents – the specific regulations of this part of the program have changed over the subsequent years.

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Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation

Refugee and humanitarian migration. Special categories – the largest is New Zealanders who can move more or less freely across the Tasman Sea. The government introduced a points system to assess applicants for economic migration. In the 1980s a system was introduced whereby each year the government sets the numbers of immigrants to be allowed into Australia. Over the years the numbers and balance of the four categories has shifted with changes in government policy, the economy and the global situation. The second major policy change in the 1970s was the removal of the final vestiges of the ‘White Australia policy’ which was one of the first initiatives of Australia’s first national government in 1901. This effectively prevented nonEuropeans from immigrating to Australia. With its removal Asians began to compete equally for places in the immigration program and Figure 4.3 shows that they made up an increasingly large share of the population. The influx of refugees from Indo-China was the first wave of a continuing in-movement from the region. Another period of major policy change in Australian immigration occurred in the 1990s. The first was the introduction of a new set of visas which allowed temporary residents to work in Australia and these are considered below. A second shift however came in the mid 1990s and involved the introduction of the State Specific and Regional Migration (SSRM) Scheme as part of the permanent settlement program. In effect immigrants entering Australia under this category receive small discounts on the Points Assessment Test in exchange for settling in designated regional or economically lagging areas of the country. In most cases they are obliged to stay in those areas for the fist three years of settlement. This category now accounts for a fifth of settler intake and has significantly influenced the pattern of settlement of immigrants in Australia (Hugo 2008). Most of the categories of SSRM migrants are skilled. New Zealand has engaged Pacific countries much more in the development of its migration policy than Australia. As the need for more unskilled labour increased in the 1960s and 1970s, immigration from some areas of the Pacific was sought after to fill labour shortages. A large number of migrants from the Pacific Islands, mainly Samoa, Tonga, the Cook Islands, Niue and Tokelau arrived in New Zealand during the late 1950s to 1970s to provide a valuable source of labour in the urban and manufacturing sector (Gibson 1983). In 1945 the Pacific population was just over 2,000 people, Samoans being the largest group. However since the 1960s the Pacific population had been rapidly increasing. In recent times, the population was 202,233 in 1996, rising to 231,801 in 2001 and increasing further to 265,974 in March 2006 (Callister and Didham 2007). The largest Pacific group recorded in the 2006 census were Samoans. A Treaty of Friendship was signed with the Samoan government in 1962, and the Western Samoan Quota scheme was established to facilitate migration from Samoa. The Quota provided residence to 1,100 Western Samoan citizens annually conditional to having definite employment in New Zealand

• •

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(irrespective of skill or labour market needs), age (18-45 years) and standard health and character requirements. In 1973 a major review of immigration policy was undertaken. The outcomes of the review were such that in 1974 unrestricted access of British immigrants was terminated and everyone had to apply for residence through either the family, humanitarian, refugee or general categories as in Australia. In addition to this, people from the Cook Islands, Tokelau and Niue were allowed free entry into New Zealand, and the Trans-Tasman Agreements between New Zealand and Australia allowed citizens of either country to live and work in the other without visas and permits (Bellamy 2008). New Zealand’s immigration policy was reviewed again in 1986. The main factors motivating this included a need to acknowledge New Zealand’s location in the Asia-Pacific region in anticipation that immigration from within this region would encourage trade, attract investment, and increase cultural diversity (Burke 1986). The review also provided for immigration to be managed on the basis of four categories of potential migrant: occupational, business, family and humanitarian. This resulted in the 1987 Immigration Act which removed the traditional source country preference list and maintained a system of an occupational priority list (OPL) (Winkelmann 2001). With these newly introduced policy changes, migrants who applied for residence under the General Category, were required to have skills contained in the OPL in order to be approved for residence. The purpose of the Business Immigration Programme (1986) was to allow the entry of migrants with proven business ability and investment capital. Both these policies were developed with the intention of being more responsive to labour market needs by selecting migrants that would help strengthen New Zealand’s economy. Given the above changes to New Zealand’s immigration policy, flows of migrants from non-traditional source countries quickly developed such that in the mid 1980s most migrants were from Europe and North America. However a decade later there was a significant move in the source of migrants, as 60 percent of migrants from parts of Asia were approved for residence (Bedford and Lidgard 1997). The consequence of immigration from Asia to New Zealand led to a huge amount of negative attention and became a major media and political issue (Trlin et al. 1997), which resulted to some significant changes to policy for potential migrants from the Asia-Pacific, the main one being more stringent English language requirements (Farmer 1997; Trlin 1997). In 1995, skilled immigration policies were reviewed further to ensure that the policy was being responsive to the changing labour market needs. Therefore the General Category was replaced by the General Skills Category, which was also points-based system for recruiting skilled migrants (Bellamy 2008). Further changes were made three years later with the introduction of the Immigration Amendment Act 1998. One of the changes included recognising qualifications held by international students. Also, international students with a qualification recognised under the GSC were exempt from the two-year work experience requirements.

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The New Zealand Immigration Programme (NZIP) was established in October 2001, which included three residence streams: • Skilled/Business Stream; • Family Sponsored Stream and • International/Humanitarian Stream. A proportion of places are allocated to each stream in the NZIP. 9 So far we have considered immigration policy in the two countries with respect to permanent settlement. Both countries eschewed temporary labour migration in the first four decades following World War II and emphasised settlement. However, in the mid 1990s attitudes changed in New Zealand and it was recognised that in the context of globalised labour markets it is necessary to have mechanisms to allow non-permanent entry of workers in some groups. Accordingly both countries have introduced a range of visa categories for temporary migrant workers. A major watershed in Australian post-war immigration policy occurred in 1995 when the Labour government received a report which recommended that the government: fundamentally deregulated the rules governing temporary work visas for skilled business persons and specialist workers (mainly professional and managerial level workers, though trade level workers are eligible too) (Birrell 1998, p. 1). As a result, in 1996 the new Coalition government put in effect most of the recommendations of the report: • Removal of previous restrictions governing the sponsoring of business persons and specialists. • Abolition of previous requirements that sponsors establish that there are no resident Australian workers available to do the work. • Abolition of the requirement that there would be some training benefit to Australian workers. • Liberalisation of rules governing to sponsorship process. • Establishment of a pre-sponsoring arrangement whereby employers can register themselves as sponsors if they meet minimal requirements. They then are allowed to sponsor any number of the new 457 Temporary Entry category. • A two stage process was introduced for the entry of 457 workers: - the sponsor nominates the position; - if there is no objection from DIMA, the applicant can apply for a 457 visa. The Temporary Business Visa category was introduced in 1996 and as DIMA (2000, p. 48) points out: The employer sponsored temporary business visas allow employers to fill skill shortages from overseas and assess new ideas, skills and technology. The visa holders tend to be highly skilled and have relatively high income levels and therefore able to contribute to 8

9

60% Skilled/Business stream, 30% International/Humanitarian stream.

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Family

Sponsored

stream

and

10%

Graeme Hugo, Paul Callister and Juthika Badkar

economic growth through improved productivity and increased demand for goods and services. The entry of managers and skilled specialists under these categories can also enhance Australia’s ability to compete in international markets. There are several other categories of temporary residence visa that permit the holder to work in Australia. The largest are foreign students who are allowed to work 20 hours during term time and full time during semester breaks. The next largest are Working Holiday Makers (WHM) who are foreign nationals aged 18-30 from selected countries which Australia has a reciprocal arrangement, who can work under certain conditions for up to 12 months. The only APEC countries included in this plan are Canada, South Korea and Japan. Other smaller temporary entry categories include educational visas (which are being replaced by 457s), International Relations, Medical and Socio-Cultural Visas. A similar pattern has applied in New Zealand. The Work Permit policy allows employers to recruit temporary workers from overseas in order to meet specific labour market shortages that cannot be found in New Zealand. The Work to Residence policy was introduced in April 2002 which allowed potential migrants to obtain a work visa or permit with a view to eventual settlement. Three categories have included Talent (Accredited Employers), Talent (Arts, Culture and Sport) and Priority Occupation List. In July 2003 the Interim General Skills Category (IGSC), which required an individual to have a job offer in New Zealand as a prerequisite to making an application was introduced. The Skilled Migrant Category (SMC) was introduced in December 2003, which replaced the IGCS. The SMC was instigated to ensure a better match of skills to New Zealand. It shifted skilled migration policy from the accepting residence applications to the recruitment of people with talents and skills to meet New Zealand’s needs. Under the SMC, points are allocated for skilled employment, qualifications and work experience, especially in a future growth area. Bonus points are awarded for having a skilled job offer outside New Zealand’s largest city, Auckland. Virtually all of the categories of temporary migrants introduced in Australia and New Zealand have focused on skilled migrants. There have been considerable pressures from time to time in both countries to extend the temporary migration visas to unskilled and semi skilled workers. In Australia there have been a number of government enquiries and submissions from a range of industry groups. Previous Australian governments have strongly resisted opening Australia to unskilled temporary migration from less developed countries despite pressures from particular employers, especially the harvesting sector (Senate Standing Committee on Employment, Workforce Relations and Employment 2006). Their opposition is based on the following arguments (Hugo 2005a): • A significant unemployed population in Australia would suggest that employers are not paying adequate wages or providing appropriate conditions for Australian workers.

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Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation

The integrity of Australia’s immigration program would be undermined because it involves unskilled workers. Moreover, if it is restricted to particular countries (e.g. Pacific nations) it would be discriminatory. • It has been questioned whether the unskilled workers would gain from temporary migration because of the high costs of travel in relation to the amount of work available and the wages paid. • The impact of the loss of human resources on the economies of home nations. • Compliance concerns that the temporary workers would ‘run away’ from employers and settle permanently developing a large ‘illegal’ migrant population. • The chequered history of guest worker programs which have seen exploitation of temporary labour migrants. Moreover, in recent years the existing 457 program has come under attack because some unscrupulous employers have underpaid migrant workers and used them to replace Australian workers (Birrell, Hawthorne and Richardson 2006; Kinnaird 2006). Even if it is accepted that Australia does not have a contemporary shortage of unskilled and semi-skilled workers it would seem there will be shortages in the future. Moreover, in the context of the discourse on migration and development (World Bank 2006a; United Nations 2006a) there are some arguments which could be mounted to suggest that well managed, targeted and limited temporary and permanent migration programs involving unskilled and semi-skilled workers can produce significant positive developmental impacts in origin countries. There has been a particular focus on Pacific countries as a source of such workers (Maclellan and Mares 2006; World Bank 2006b). In New Zealand already there is policy development and experimentation taking place in relation to temporary migration of horticultural workers. In October 2006 the Government announced a new seasonal work programme, the Recognised Seasonal Employer scheme (RSE), to assist employers in particular industries to attract seasonal workers from other countries. The scheme allows for priority to be given to workers from the Pacific for seasonal work opportunities in the horticulture and viticulture industries in planting, maintaining, harvesting and packing crops where there are no New Zealand workers available. The initiative attempts to provide a mutually beneficial situation where New Zealand employers have a secure labour supply that they can utilise in successive years and for the Pacific to have access to the New Zealand labour market, thereby boosting the skills and economies of Pacific nations. The RSE scheme was officially launched on 30 April 2007. The RSE policy represents a substantial departure in immigration policy by Australia and New Zealand. The RSE policy is geared toward Pacific states and employers are able to recruit from eligible Pacific Islands Forum Member Nations – Federated States of Micronesia, Papua New Guinea, Kiribati, Nauru, Palau, The Republic of the Marshall Islands, Solomon Islands, Tonga, Tuvalu, Samoa and Vanuatu. However, employers may recruit from other countries if the RSE administration is satisfied they have made a reasonable attempt to •

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recruit from the Pacific or they have a pre-established relationship with a particular country. RSE employees from the Pacific can stay in New Zealand up to 7 months at a time (9 months if they are from Kiribati and Tuvalu in recognition of higher travel costs) and they can return in consecutive seasons. Employers are encouraged to build long term relationships with the Pacific Islands residents and to build their skills over time. There are plans to develop appropriate training for migrant workers at home and in New Zealand. Employers are obliged to: • Pay half travel costs. • Pay for an average 30 hours per week for the duration of employment. • Provide pastoral care, ongoing accommodation, basic health care and local transport. • Make a financial contribution to locating a worker who fails to return home at the end of their employment. The introduction and progress of the Scheme is being watched closely in both New Zealand and Australia because it could be an important first stage for substantial programs of this type in the future.

Trends in Permanent Settlement Migration Australia has an organised program for permanent settlement of immigrants. However people who enter Australia under its Migration Program are only one component of the contribution made by international migration to Australia’s population growth. The other elements are: • New Zealand migration, which refers to the arrival of New Zealanders under the Trans-Tasman Travel Agreement. • Long-term visitors to the country. • Emigration of residents. • Category jumping from temporary and permanent residence. The Migration Program operates within set levels and is made up of humanitarian and non-humanitarian programs. The composition of Australia’s humanitarian program in recent years is shown in Table 4.2. This indicates that the total intake in 2006-07 was 14,158 slightly more than in the previous year (14,144) and the highest for 10 years. Table 4.2. Outcomes of Australia’s Humanitarian Program by Component and Category from 1997-98 to 2006-07 Component Offshore Onshore Temporary Humanitarian Total

Category Refugee SHP SAC

97-98 4,010 4,636 1,821 1,588

12,055

98-99 3,988 4,348 1,190 1,834

11,360

99-00 3,802 3,051 649 2,458

9,960

*

00-01 3,997 3,116 879 5,741

01-02 4,160 4,258 40 3,891

02-03 4,376 7,280 866

03-04 4,134 7,668 2,047**

164

6

3

2

13,773

12,349

12,525

13,851

04-05 5,511 6,585 1,082 13,178

05-06 6,022 6,736

06-07 6,231 6,016

1,386

1,911

14,144

14,158

* In this year there were 5,000 temporary safe haven visas to Kosovars offshore (4,000) and Timorese (1,900). ** Includes 1,228 Onshore SHP visas granted to East Timorese under ministerial intervention powers.

Source: Rizvi 2002, 29; 2003, 47; 2004, 42 and 2005, 37; Mills 2006, 41; DIAC 2008

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Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation

The origins of the Australian refugee-humanitarian intake has varied considerably over time as is evident in Figure 4.4. A major change occurred in the late 1990s when Australia began to take substantial numbers of refugeehumanitarian migrants from the Horn of Africa, especially from Sudan but also Ethiopia and Eritrea. This was a significant change since hitherto Australia’s immigration from Africa had been mainly from South Africa and Zimbabwe and was predominantly of European ethnic origin. This has added a new layer of heterogeneity to the Australian population and the new groups have faced many challenges in adjusting to life in a quite different cultural context (Perrin and Dunn 2007). However in 2007 it was announced (DIAC 2007a) that Australia had adjusted the ‘regional priorities’ of its refugee-humanitarian program for 2007-08. The intake was to be maintained at 13,000 places but the African intake was reduced from 55.7 percent (70.2 percent in 2004-05) to 30 percent while those from Asia (mainly Burmese from Thailand and Bhutanese in Nepal) were increased from 10 to 35 percent. It is not apparent whether the new Rudd Labour government elected in November 2007 will change this balance. Figure 4.4. Australia: Region of Birth of Humanitarian Settler Arrivals, 1996-97 to 2006-07 9,000 8,000 7,000

5,000 4,000 3,000 2,000 1,000

Year Oceania

Europe

North Africa and the Middle East

Asia

America

Sub-Saharan Africa

Source: DIAC, Immigration Update, various issues

143

2006-07

2005-06

2004-05

2003-04

2002-03

2001-02

2000-01

1999-2000

1998-99

1997-98

0 1996-97

Persons

6,000

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While refugee-humanitarian migrants are not part of the economic migration program of Australia, they do have an impact on the labour market. Studies show that of all new migrants they experience the greatest difficulty in penetrating the Australian labour market due largely to language skill and education barriers (Richardson et al. 2001). However they are one of main groups of unskilled migrants and they are filling important niches in the labour market, for example in some regional areas they have helped meet important labour shortages in abattoirs, food processing and intensive agriculture. The non-humanitarian part of the program in 2006-07 resulted in 147,830 10 non-humanitarian immigrants settling in Australia. This was the largest intake for over a decade and 7.3 percent larger than in 2005-06 (137,745). There are three main components of the non-humanitarian part of the program – skill family and special eligibility. The Skill stream is capped at a level decided each year by the federal government in consultation with the main stakeholders (unions, employers, state and local government etc.). There is a Points Assessment Test which most applicants for Skill visas sit with an adjustable ‘pass’ level. The test involves receiving points for skills, age, work experience, English language ability etc. Family migration, on the other hand, is designed to facilitate reunion of close family members like spouses, children, parents and certain other extended family members. There has been a growing emphasis in the program of the skill component as is evident in Figure 4.5. Indeed in 200607 the number of skilled immigrants coming to Australia reached a record 98,918 people – an 8.1 percent increase over the previous year. There has been considerable discourse in Australia about skill shortages with the unemployment level being at the lowest levels for many decades. The switch over shown in Figure 4.5 from a predominance of family migrants in the non-humanitarian program to one dominated by skilled settlers is one of the major elements of change since the mid 1990s. The percentage of settlers in the skill categories increased from 29.1 percent in 1993-94 to 55.1 percent in 2006-07. This has been driven by a number of reports (e.g. Birrell, Hawthorne and Richardson 2006; Parliament of the Commonwealth of Australia 2004) and a strong imperative within government for immigration to contribute toward the increasing skill profile of the national population and improving productivity. A recent Productivity Commission Report (2006), however, concludes that the impact of immigration on productivity was positive but relatively small and would only increase income per capita over 21 years by less than A$400. Nevertheless the policy has seen a considerable change in the skill profile of settlers arriving in Australia. This is evident when we compare the occupational profile of settler arrivals in 2006-07 with those arriving in 1992-93 in Table 4.3. The number of settlers working almost doubled but the percentage in the top three skilled occupation categories increased from 47.4 to 66 percent. 9

10

This excludes New Zealanders (28,307 compared with 23,781 in 2005-06) who have special access and Refugee-Humanitarian Arrivals (14,158).

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Figure 4.5. Australia: Migration Program Outcomes by Stream, 1989-90 to 2006-07 120,000 100,000

Number

80,000 60,000 40,000 20,000

2006-07

2004-05

2002-03

2000-01

1998-99

1996-97

1994-95

1992-93

1990-91

1988-89

1986-87

1984-85

1982-83

0

Year Family

Skill

Special Eligibility

Humantiarian

Source: DIAC, Population Flows: Immigration Aspects, various issues and DIAC, 2007b

Table 4.3. Australia: Occupation of Settler Arrivals 2006-07 and 1992-93 Occupation Managers and Administrators Professionals Associate Professionals Tradespersons Advanced Clerical, Sales & Service Intermediate Clerical, Sales & Service Intermediate Production & Transport Elementary Clerical Sales & Service Labourers and Related Total

2006-07 (%) 11.7 40.9 13.4 14.1 2.4 11.2 2.6 1.7 1.9 61,796

1992-03 (%) 10.4 30.2 7.0 16.0 2.1 5.3 37,479

Source: DIAC, Immigration Update, various issues

The numbers coming under the Family Migration category also have increased but much more slowly in recent years – increasing from 45,943 in 2005-06 to 48,769 in 2006-07. This category however has become increasingly

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dominated by the spouses-fiancées component as is evident from Figure 4.6. This is partly a pattern of more and more Australians, especially young Australians, travelling overseas both on extended holidays and for working. Inevitably this is resulting in increasing international marriage. However there has also been a tightening of the regulations regarding other family members, especially aged parents. Figure 4.6. Australia: Family Stream Outcomes by Visa, 1982-83 to 2006-07 90,000 80,000 70,000

Persons

60,000 50,000 40,000 30,000 20,000 10,000

2006-07

2004-05

2002-03

2000-01

1998-99

1996-97

1994-95

1992-93

1990-91

1988-89

1986-87

1984-85

1982-83

0

Year

Spouse-Fiance

Parents

Concessional

Dependent Children

Other

Unallocated*

* Estimated GORS/PEPAE approvals. These figures are not attributed to sub-components until 1989/90. Note: Data prior to 1986-87 for off-shore only. Source: DIMIA, Australian Immigration Consolidated Statistics; DIAC, Population Flows: Immigration Aspects, various issues; DIAC, 2007b

A distinctive element in Australian immigration is the influx from New Zealand. Although there have been changes over the years there has been more or less unrestricted movement of Australians and New Zealanders across the Tasman (Carmichael [ed.] 1993; Bedford, et al. 2003). New Zealanders are granted a Special Category Visa upon arrival and this remains valid as long as they wish to stay in Australia. The stock of New Zealanders in Australia was 504,430 in mid 2007, a record number and an increase of 33,826 (7.2 percent) over the previous year (DIAC 2008, p. 44). Figure 4.7 shows the permanent intake from New Zealand has fluctuated over the years with 28,307 arrivals in 2006-07 an increase of 4,526 over the previous year. It will be noted in the

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Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation

diagram, however, that the numbers of New Zealand citizens moving permanently to Australia is substantially larger than the number of New Zealand-born immigrants (18,990 in 2005-06). This has resulted in some suspicion in the Australian government of New Zealand as being intendedly used as a less difficult way to enter Australia since for many years their Points Assessment Test Entry Score was not as high as that of Australia. This resulted Australia amending its regulations so that New Zealanders were not automatically eligible for social security payments in Australia (Bedford et al. 2003). The high level of New Zealand migration to Australia has meant that in mid 2006 there were 470,602 New Zealand residents in Australia – equivalent to 11.7 percent of the population of New Zealand. Of these 346,404 (73.6 percent) were New Zealand-born. Figure 4.7. Australia: Arrivals of New Zealand Citizens and New Zealand-Born Persons, 1981-82 to 2005-06 45,000 40,000 35,000

Persons

30,000 25,000 20,000 15,000 10,000 5,000

2005-06

2003-04

2001-02

1999-2000

1997-98

1995-96

1993-94

1991-92

1989-90

1987-88

1985-86

1983-84

1981-82

0

Year New Zealand Citizens

Source:

New Zealand-born

DIMIA, Australian Immigration: Consolidated Statistics and DIAC Immigration Update, various issues

The permanent migration figures however are only the tip of the iceberg of Trans Tasman movement. In 2005-06 a total of 1,305,640 New Zealand citizens

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came to Australia. The number of permanent arrivals increased from 18,718 in 2003-04 to 22,379 in 2004-05 and 23,781 in 2005-06 and long term arrivals from 10,286 to 11,524 and 11,544. However one of the distinctive characteristics of New Zealander migration to Australia is a substantial return migration. In 2005-06 there were 13,947 permanent and long term departures of New Zealanders from Australia. Another distinctive feature of New Zealander migration to Australia is that once it is controlled for age there is little difference between the New Zealand citizen population in Australia and the Australia-born (Hugo 2004b). This differentiates them from all other immigrant groups in the country. The New Zealand-born in Australia have a higher level of workforce participation (76.3 percent) compared with the Australia-born (68.2 percent) and a similar unemployment rate (4.7 percent) (DIMIA 2006, 51). Indeed international migration between Australia and New Zealand has more similarities with internal migration patterns within Australia (Bell and Hugo 2000) than it does with other international migration flows. This reflects the fact that despite Australia and New Zealand being separate nation states they largely form a single labour market. It was demonstrated in Figure 4.3 that the birthplace composition of settlement migration to Australia has changed substantially over the post-war period. The interwar period in Australia was an era of predominantly British migration to Australia but there were two major breaks from this during the post-war era. The first was in the late 1940s when Australia agreed, during a time of significant labour shortage, for the first time to take a significant number (300,000) of non-British settlers – Displaced Persons from Eastern Europe. The success of these immigrants emboldened the government to subsequently attract waves of migrants from other non-English Speaking parts of Europe – Italy, Greece, Yugoslavia, Netherlands, Germany, etc., although the United Kingdom remained the predominant source of migrants. A second major shift came in the early 1970s when the last vestige of the White Australia Policy was removed and the first migrant settlers from Asia were welcomed. The flow began with refugees from Indochina but soon included substantial waves of Malaysians, Singaporeans, Filipinos and then East Asians. There has been a permanent settler migration of 496,992 Asians to Australia over the 1994-2007 period comprising 37.6 percent of the total 1.32 million settler arrivals over those thirteen years. Figure 4.8 shows that the numbers fluctuated between 25,339 in 1997-98 and 57,309 in 2006-07 but a general upward trajectory is evident in the last couple of years. The relative significance of the four Asian sub-regions has fluctuated with South Asians recording the most rapid increase in recent years. Asian countries account for seven of the ten top birthplace countries of migrant settlers over the 1994-2007 period with the largest numbers being from China (104,599), India (79,804), Philippines (47,361), Vietnam (33,917), Indonesia (31,146) and Hong Kong SAR (26,795).

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Figure 4.8. Australia: Asia-born Settler Arrivals by Region, 1994-95 to 2006-07 70,000

60,000

Number

50,000

40,000

30,000

20,000

10,000

2006-07

2005-06

2004-05

2003-04

2002-03

2001-02

2000-01

1999-2000

1998-99

1997-98

1996-97

1995-96

1994-95

0

Year Southeast Asia

Source:

Northeast Asia

Southern Asia

Central Asia

DIAC unpublished data

The shift in the origin of immigrant settlers to Australia is evident in Table 4.4 which shows the top 10 origin countries over the last three decades. The following main points are evident in these patterns: • Although Asian immigration had begun in 1976/77 the increasing dominance of Asian countries over the three decades is apparent. • The continued dominance of the United Kingdom is seen as being the largest country of origin but its dominance has been lessened. • The increasing significance of New Zealand. • The shifts in the Asian countries that were main origins – initially the English Speaking origins of Malaysia and the Philippines, then the refugeehumanitarian flows from Vietnam, then Hong Kong and Taiwan and more recently the demographic giants of China and India have become significant. • In recent years the horn of Africa country of Sudan becoming more significant. • One of the features of Australian immigration has been that over the last two decades women have outnumbered men in permanent migration to Australia.

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Table 4.4. Australia: Settler Arrivals – Top 10 Source Countries of Birth

Source: DIAC 2008, 27

This is apparent in Figure 4.9 which shows the sex ratio of settler arrivals switched over from being male to female predominant in the early 1980s. Women have been especially evident in family migration but in recent years they have become more important in the skilled migration stream. In New Zealand too while immigration has traditionally been male, women, especially women from Asia, are an important part of skilled migration (Badkar, et al. 2007).

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Figure 4.9. Australia: Sex Ratios of Settler Arrivals, 1959-2007

MALES PER 100 FEMALES

160 150 140 130 120 110 100 90 80 70 60 50 1959

65

70

75

80

85

90

95

2000

05

FINANCIAL YEAR

Source: DIAC, unpublished data

Figure 4.10. Migrant Flows into New Zealand Through the Three Residence Streams, 1997/98 to 2006/07 – Approvals 40,000 Skilled / Business

NUMBER

30,000

20,000

Family Sponsored

10,000 International / Humanitarian 0 1997

98

99

2000

01

02

03

04

05

06

07

FINANCIAL YEAR

Source:

Department of Labour http://www.immigration.govt.nz/migrant/ general/generalinformation/statistics/ 8U

As in Australia, in New Zealand patterns of migration are characterised by strongly increasing Skilled/Business migration, with smaller growth in Family Sponsored and International/Humanitarian migration (Department of Labour 2006). As shown in Figure 4.10, the number of migrants entering New Zealand through the Skilled/Business stream increased from 12,837 in 1997/98 to almost

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35,876 in 2001/02. Migrant flow dropped in 2003/04 and started to rise again such that 31,870 migrants were approved for residence in 2005/06. The number of approvals dropped slightly in 2006/07 to 28,140. Residence approvals through the Family Sponsored Stream have remained consistent for the last 10 years, with 13,526 approved in 1997/98 and 14,705 in 2006/07. Similarly, the number of approvals through the International/Humanitarian stream remained between 1997/98 to 2002/03. Approvals increased to 5,040 in 2004/05 and dropped slightly to 4,119 in 2006/07. Table 4.5, Table 4.6 and Table 4.7 look at the top 10 source countries of nationalities approved for residence through the three residence streams from 1997/98 to 2006/07. Table 4.5. People Approved for Residence, Skilled/Business Stream 1997/98 to 2007/07 (Tope 10 Source Countries as at 06/07) Nationality Great Britain China South Africa Philippines India Fiji United States of America South Korea Germany Malaysia Other Total Source:

1997/98 2,766 832 2,928 421 1,329 575 363 261 217 176 2,969 12,837

2000/01 3,674 3,040 3,398 808 4,101 1,448 475 1,252 233 1,280 5,935 25,644

2003/04 5,652 3,027 2,113 516 1,738 809 468 1,564 223 482 4,004 20,596

2006/07 9,741 3,326 3,201 2,431 1,619 1,263 933 720 501 499 3,906 28,140

Department of Labour http://www.immigration.govt.nz/migrant/ general/generalinformation/statistics/ 8U

Table 4.6. People Approved for Residence, Family Sponsored Stream 1997/98 to 2006/07 (Top 10 Source Countries as at 07/06) Nationality Great Britain China India Fiji Samoa South Africa United States of America Tonga South Korea Philippines Other Grand Total Source:

1997/98 1,793 2,805 952 920 595 405 323 664 288 276 4,505 13,526

2000/01 1,838 2,258 1,324 1,474 854 600 390 576 327 337 4,570 14,548

2003/04 2,430 1,641 1,223 1,146 856 477 462 826 280 305 3,816 13,462

2006/07 2,470 2,456 2,392 837 705 511 501 390 380 338 3,725 14,705

Department of Labour http://www.immigration.govt.nz/migrant/ general/generalinformation/statistics/ 8U

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Table 4.7. People Approved for Residence, International/Humanitarian Stream 1997/98 to 2006/07 in the Top 10 Countries in the 06/07 Financial Year Nationality Samoa Tonga Fiji Myanmar Zimbabwe Afghanistan Kiribati Tuvalu China Great Britain Other Grand Total Source:

1997/98 961 52 16 1 2 11 16 29 1,099 2,187

2000/01 1,349 102 75 208 12 137 17 45 57 1,315 3,317

2003/04 1,327 895 352 13 97 503 48 165 141 83 1,335 4,959

2006/07 1,103 571 471 379 319 232 124 102 64 62 692 4,119

Department of Labour http://www.immigration.govt.nz/migrant/ general/generalinformation/statistics/ 8U

Table 4.5 shows that while there are fluctuations in migrant source countries, migrants from Great Britain, China, South Africa, India and South Korea are the main nationalities that enter New Zealand through the Skilled/Business stream. However in 2006/07, the number of migrants from the Philippines granted residence has increased significantly from the previous year, almost tripling from 872 in 2005/06 to 2,431 in 2006/07. Migration from the Philippines is female dominated, with most women working in the nursing and midwifery professions (Badkar et al. 2007). Also of interest is the decline of migrants from South Korea. From 2001/02 to 2005/06, South Korean migrants were in the top five source countries, however in 2006/07 the number of South Korean approvals halved to 720. These changes in source are indicative of changing industry and labour needs in New Zealand and warrant further monitoring. The demand for residence through the Family Sponsored Stream (FSS) remains high, especially through the partnership and parent categories. This policy allows family members of New Zealand residents and citizens to be granted residence. According to Hugo (2005c), marriage across borders is an increasingly important part of migration in many parts of the world, resulting in increased travel allowing the mixing of people from different countries. Table 4.6 shows that migrants from China, Great Britain, India, Fiji and Samoa are main sources of migrants through the FSS. Recent research by Hugo examines the number of permanent arrivals from China who entered Australia through the skill category and family category. His research shows that there are almost two skilled migrants to every family migrant in the total intake. His research highlighted some significant variation in the nature of family flows by source country such that among Chinese migrants, there is only a small difference in numbers of the two types of migrants. For example, although more than half (53 percent) of permanent

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arrivals from China enter Australia through the skill category, a large proportion of Chinese migrants enter Australia through the family category (46 percent). This is significantly higher than that of the total intake of family category migrants (27 percent). According to Hugo, simply focusing on individuals as if they have no family connections may not attract the people a country wants, and those who do migrate may not stay on if they are unable to re-create their family networks (Hugo 2007). New Zealand is a signatory to the 1951 United Nations Convention and 1967 Protocol Relating to the Status of Refugees. The International/Humanitarian stream provides for New Zealand to fulfil its international commitments regarding refugees through the Refugee Quota and its special relationship with some Pacific nations, through the Pacific Access Category and Samoan Quota. 11 It is not surprising that the main source countries are Samoa, Tonga and Fiji, as these migrants enter New Zealand through the PAC and Samoan Quota. In 2006/07 the main nationalities coming to New Zealand through the Refugee Quota are from Myanmar, Zimbabwe and Afghanistan. This is quite different to the previous year, where the main source countries were Myanmar, Iran and the Congo (Department of Labour 2006). 1

Temporary Migration Perhaps the most striking change in Australian immigration over the last decade has been the increased non-permanent immigration of workers. Hitherto, Australia’s immigration policy had eschewed temporary worker migration in favour of an overwhelming focus on permanent settlement. However, in the globalising world in which transnationalism has replaced permanent settlement as the dominant international migration paradigm (Glick-Schiller, et al. 1995), Australia has quickly and effectively transformed its policy and now has a suite of visa categories in which migrant workers can gain temporary residence with the right to work (Hugo 1999). The trends in the numbers of the main visa categories of temporary migrants with the right to work are shown in Figure 4.11. The Working Holiday Maker (WHM) program reached record levels of 130,993 arrivals in 2006-07. The WHM program allows young people (aged 18-30 years) from 19 nations to have working holidays in Australia for periods of up to a year. The fact that WHMs fill some important niches in the labour market such as in harvesting, tourist activity, restaurants etc. has been recognised by recent legislation allowing WHMs to extend their stay in Australia if they work in particular areas of labour shortage. One of the most important changes in Australian immigration policy was the introduction of skilled temporary residence visas. This has resulted in substantial flow of long term and short term skilled entrants to work in Australia. Long term (457) visas (up to 4 years) reached a record 71,150 in 2005-06 (a 42

11

Countries included in the PAC are Tonga, Tuvalu, Kiribati and Fiji.

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Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation

percent increase over the previous year) and reached 104,038 in 2006-07. Short stay (less than 1 year) business visitors numbered 377,541 in 2005-06.

2006-07

2005-06

2004-05

2003-04

2002-03

2001-02

2000-01

1998-99

Year

1999-2000

1997-98

1996-97

1995-96

1994-95

1992-93

1991-92

1990-91

1989-90

1988-89

1987-88

1993-94

Overseas Students

180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 1986-87

Number

Figure 4.11. Temporary Migration to Australia by Category, 1986 to 2007

Working Holiday Makers 140,000 120,000 Number

100,000 80,000 60,000 40,000 20,000

Year

2006-07

2005-06

2004-05

2003-04

2002-03

2001-02

2000-01

1999-2000

1998-99

1997-98

1996-97

1995-96

1994-95

1993-94

1992-93

1991-92

1990-91

1989-90

1988-89

1987-88

1986-87

0

Temporary Business Entrants 500000 450000 400000

Number

350000 300000 250000 200000 150000 100000 50000 1996-97

1997-98

1998-99

1999-2000

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

1995-96

1994-95

1993-94

1992-93

1991-92

1990-91

1989-90

1988-89

1987-88

1986-87

0

Year

Total

800,000 700,000

Number

600,000 500,000 400,000 300,000 200,000 100,000 1995-96

1994-95

1993-94

1992-93

1991-92

1990-91

1989-90

1988-89

1987-88

1986-87

0

Year

Source:

DIAC Population Flows: Immigration Aspects, various issues

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The Temporary Business Entry Visa (457) is similar to the H1B visa in the United States, is initiated by employers and is not capped. It is even more focussed on skill than the permanent migration program and recent research has shown it has been generally quite successful (Khoo, McDonald and Hugo 2007). However, the 457 program has come under intense scrutiny with some employers being accused of misusing the scheme to displace Australian workers, especially in some regional areas. Union movement (Australian Manufacturing Workers Union 2006) have raised issues of migrant workers being ready to settle for lower wages as well as occupational health and safety issues covered by lack of ability to speak English. A Parliamentary Inquiry (Joint Standing Committee on Migration 2007, p. 2) has made a number of recommendations to improve procedures associated with the program. One of the largest categories of temporary residents with the right to work are foreign students and Figure 4.12 shows that there has been a rapid increase in the number of foreigners moving to Australia to study and Asians have made up around three quarters of them. On 30 June 2006 there were 208,038 people on student visas in Australia and in the year 2005-06, 190,674 visas were issued to overseas students – both record levels (DIMA 2007, 66). Of the largest six countries of origin, five are Asian – China (12 percent), Korea and India (12 percent each) Japan (4 percent) and Malaysia (5 percent). Figure 4.12. Overseas Students in Australian Universities, 1983 to 2006 Overseas Students from Southern and Central Asia

300,000

Overseas Students from Northeast Asia

250,000

Overseas Students from Southeast Asia

Number

200,000

Other Overseas Students Total Overseas Students (1983-90)

150,000

100,000

50,000

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

0

Year

Source:

DEST Selected Higher Education Student Statistics, various issues

In mid 2006 there were a stock of 630,513 persons present in Australia on a temporary visa (DIMA 2007, p. 76) over half (52.4 percent) of whom were from Asia. Hugo (2006b) has shown that temporarily resident workers now make up around 4 percent of the national workforce and are strongly concentrated in particular niches of the labour market. At present the temporary worker visa

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Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation

categories are restricted to the four most skilled occupational categories but there is pressure from some groups to allow semi-skilled and unskilled workers to be included in the program but this has been resisted by the government. In New Zealand, 1.5 million people were granted a temporary visitor, student or work permit on arrival in 2006/07. Temporary migrants (mainly workers and students) generate significant benefits for New Zealand’s labour market as they possess skills and experience needed by New Zealand employers (Department of Labour 2008). Over 100,000 individuals were issued with work permits in 2006/07. The largest source country was the UK followed by China (Table 4.8). Migrants from China who have been granted work permits have increased considerably from 3,156 in 2001/02 to 14,889 in 2006/07. This can be attributed to the introduction of work permit policies for international students who have completed their studies in New Zealand (Department of Labour 2006). 12 1

Table 4.8. Principal Applicants Granted Work Permits in the Top Twelve Countries Since 1999/00* Nationality Great Britain China USA Germany Japan India South Korea South Africa Fiji Canada Ireland Philippines Others Total

1999/00 8,785 1,120 2,621 725 5,545 1,281 694 1,278 798 1,367 761 473 8,627 34,075

2001/02 15,114 3,156 3,201 1,923 6,716 3,639 2,587 2,509 1,779 1,812 1,543 805 14,364 59,148

2003/04 19,185 4,023 4,504 3,530 6,957 3,659 3,311 3,062 1,680 2,427 2,609 913 17,727 73,587

2005/06 18,659 11,954 6,327 6,241 6,142 4,889 4,063 3,420 3,278 3,042 2,921 2,176 26,562 99,674

2006/07 18,696 14,889 7,185 7,302 5,803 5,659 4,785 3,985 4,427 3,016 2,596 3,666 33,448 115,457

2006/07 % 16 13 6 6 5 5 4 3 4 3 2 3 29 100

* This table analyses individuals rather than the number of permits issued. If a person had been issued with more than one work permit in any year, they are counted only once. Source: Department of Labour (2006) Migration Trends 05/06

Table 4.9 looks at the number people that were granted a labour market tested work permits that were granted from 1999/00 to 2005/06. The aim of labour market tested work permits is to fill skill shortages in New Zealand where no New Zealand citizens or residents are available to do the work. In 2005/06, labour market tested work permits were issued to 29,503 people, of which one-fifth were granted to migrants from the UK. The most common occupational group of the labour market tested work permit holders was

12

Chinese students make up the bulk of international full fee paying students in New Zealand.

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Graeme Hugo, Paul Callister and Juthika Badkar

Professional (19 percent), and Service and sales workers (17 percent) (Department of Labour 2006). Table 4.9. Principal Applicants Granted Labour Market Tested Work Permits Since 1999/00* Nationality UK China South Africa India USA South Korea Fiji Brazil Japan Malaysia Philippines Germany Others Total

1999/00 3,218 257 1,032 599 1,101 213 483 24 1,992 333 263 309 3,762 13,586

2001/02 4,015 795 1,399 1,174 1,198 383 774 64 2,430 364 349 525 5,161 18,631

2003/04 6,081 1,933 1,787 1,655 2,129 1,426 667 280 2,409 548 413 600 7,498 27,426

2005/06 5545 3087 1916 1866 1682 1654 1457 1381 1002 831 757 721 7,604 29,503

2005/06 % 19 10 6 6 6 6 5 5 3 3 3 2 26 100

* This table analyses individuals rather than the number of permits issued. If a person had been issued with more than one work permit in any year, they are counted only once. Source:

Department of Labour (2006) Migration Trends 05/06

International students contribute to New Zealand through foreign exchange earnings and by promoting international links. At the end of their studies, international students are able to participate in the labour force because they can offer employers New Zealand qualifications (Merwood 2007). Table 4.10 looks at the number of principal applicants granted a student permit from 1999/00 to 2005/06. The number of international students granted student permits increased sharply from 28,545 in 1999/00 to 87,075 in 2003/04, with main source countries being China and South Korea. In recent years there has been a decline in the number of international students, with only 67,147 students granted permits in 2006/07, a decease of 24 percent from 2002/03 (Department of Labour 2006). The recent decline in the number of international students is mainly due to the drop in students from China. Through this period, students from China make up the largest proportion. However in recent years, there has been a significant decline in overall international student intake. In 2002/03, 41,598 student permits were issued to Chinese students, compared to 20,227 in 2006/07. There could be several reasons for this drop, the main ones being uncertainty over immigration policy, increased competition from Canada, Australia and the UK, high exchange rates making it more expensive to study in New Zealand, negative media reports, and issues around safety and student protection (Ho et al. 2007). Although the numbers of Chinese students have declined, they still remain the largest source of international students in New Zealand.

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Demographic Change and International Labour Mobility in Australasia – Issues, Policies and Implications for Cooperation

Table 4.10. Principal Applicants Granted Student Permits Since 1999/06* Nationality China South Korea Japan USA Germany India UK Malaysia Thailand Fiji Taiwan South Africa Others Total

1999/00 5,566 3,892 3,586 1,151 666 256 543 1,363 1,569 766 1,476 506 7,205 28,545

2001/02 32,424 12,510 4,529 1,657 1,180 1,834 961 1,194 2,475 1,254 1,832 843 10,830 73,523

2003/04 40,748 13,729 4,608 2,740 1,953 2,174 2,330 1,350 2,256 1,142 1,493 1,114 11,438 87,075

2005/06 26,661 10,091 3,955 2,662 2,421 2,370 2,103 1,745 1,708 1,702 1,308 1,137 11,360 69,223

2006/07 20,227 11,148 3,670 2,736 2,611 3,085 2,131 2,049 1,820 2,094 1,349 1,513 12,714 67,147

2006/07 % 30 17 5 4 4 5 3 3 3 3 2 2 19 100

* This table analyses individuals rather than the number of permits issued. Source:

Department of Labour (2006) Migration Trends 05/06

Migrant Transitions Thus far we have considered permanent migrations into Australia and New Zealand separately but there is an increasing amount of blurring of permanent and temporary migrants globally (King 2002). Both in terms of temporary migrants transferring to permanent residency and immigrants deciding to leave Australia and New Zealand there is significant category jumping. We are especially however concerned with the transitioning from temporary to permanent residence given the substantial increase in temporary worker migration which was documented in the previous section. The pattern of settlers being increasingly drawn from the pool of temporary migrant workers and students already resident in a country has been designated ‘designer migrants’ by Simmons (1999) in Canada. This refers to a situation whereby potential migrants prove that they can be successful in local labour and housing markets before they are approved as migrants. In Australia Figure 4.13 shows that this part of the migration programme has increased each year and in 2005-06 there were 48,214 ‘onshore additions’ to the population – 26.8 percent of the intake while in 2006-07 there were 51,759 onshore additions (27.0 percent of the total). Asians made up a higher proportion of onshore migrants (52.2 percent) than of offshore arrivals (39.6 percent). Hence, as Australia moves more toward a system whereby a large proportion of settlers initially enter the country as temporary migrants of one kind or another (as is already the case in New Zealand and the United States) this new pattern is stronger among Asians than among immigrants from other regions. Over the 6 years up to mid 2006, 24.5 percent of all permanent additions to the Australian population were onshore settlers (31.8 percent of those from Asia between 2002-03 and 2004-05). It is

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also important to point out that skilled migrants are more prominent among Asian onshore settlers than they are among the ‘offshore’ settler arrivals. Table 4.11 shows that over the 2000-01 to 2005-06 period skilled migrants made up 60.6 percent of onshore migrants compared with 42.1 percent of the offshore permanent arrivals. Hence, the growing onshore component of Australian migration is even more skill focussed than the longstanding offshore settlement part. Figure 4.13. Australia: Onshore Residence Visa Grants, 1989-90 to 2005-06 45,000 40,000 35,000

Number

30,000 25,000 20,000 15,000 10,000 5,000

2005-06

2004-05

2003-04

2002-03

2001-02

2000-01

1999-2000

1998-99

1997-98

1996-97

1995-96

1994-95

1993-94

1992-93

1991-92

1990-91

1989-90

0

Year

Source:

DIAC, Population Flows: Immigration Aspects, various issues

Table 4.11. Australia: Visa Category of Permanent Additions, 2000-01 to 2006-07 Visa Category Skill Family Refugee-Humanitarian Other Total Source:

Onshore Offshore No. % No. % 163,800 60.6 335,178 42.1 85,424 31.6 206,194 25.9 15,269 5.6 71,871 9.0 5,794 2.1 183,692 23.0 270,287 100.0 796,935 100.0

Total No. % 498,978 46.8 291,618 27.3 87,140 8.2 189,486 17.8 1,067,222 100.0

DIAC, Immigration Update, various issues

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The increasing significance of ‘onshore’ migration is of course a corollary of the increasing scale of non-permanent worker migration to Australia discussed earlier. However, it also reflects a change in Australian migration policy making which sees considerable benefit in increasing the balance of offshore migrants since they are more likely to adjust to Australian conditions, especially the labour market, than their offshore counterparts. This is a function of the fact that they are more likely to have Australian qualifications and have a greater knowledge of, and experience in, the Australia labour market and conditions in Australia generally. Hence, since 1999 a number of changes in regulations have favoured temporary migrants changing their status to permanent residence. This has included regulations which have made it possible for some foreigners on student visas to gain permanent residence without returning to their origin country. Hence, in 2005-06 some 17,896 students in Australia changed their status to permanent residence, 89.6 percent were from Asia. The nexus between student migration and eventual permanent settlement is becoming an increasingly important process in skilled migration, not only in Australia but throughout the OECD region. The link between studying in Australia and eventually permanent settlement is not confined to students seeking permanent residence immediately after completing their studies. The Australian Points Assessment Scheme for selection of skilled settlers now gives extra points for having an Australian qualification so large numbers of former students who studied in Australia and then returned to their origin country have subsequently come back to Australia as settlers. Accordingly, Rizvi (2004, p. 17) showed that in 2003-04 some 55 percent of skilled immigrant settlers had an Australian qualification in 2003-04. In 2004-05 some 15,719 new arrivals had an Australian qualification and Figure 4.14 shows that among this group Asians are again dominant accounting for 88.9 percent of arrivals. In New Zealand in 2005/06, 87 percent of migrants who were approved for permanent residence had previously held a visitor, study or work permit (Department of Labour 2006). In fact linking temporary immigration policy with residency policy can be beneficial to both migrants and New Zealand. A New Zealand Department of Labour study has shown that migrants who have worked in New Zealand prior to gaining permanent residence have positive employment outcomes after gaining residence (Dunstan et al. 2004). Recent New Zealand research looking at the pathways international students take through the New Zealand education system to work or permanent residence shows that between 1999/00 to 2000/01, 27 percent transitioned to work or permanent residence. This study showed that for Chinese students the most common route to permanent residence was through the Skilled/Business stream following a study pathway that included English language and tertiary studies, while students from South Korea, Japan and the USA were more likely to gain permanent residence directly from school (Merwood 2007).

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Figure 4.14. Australia: Number of Skilled Stream Outcome Principles with Points for Australian Qualification by Citizenship, 2004-05

Source:

Unpublished data supplied by DIAC

Emigration, Diaspora and Diaspora Policy There is a tendency for Australia and New Zealand to be categorised as purely immigration countries but, in fact, they also have experienced significant emigration and over recent years departures on a permanent or long term basis have been very substantial. Figure 4.15 shows that in Australia in 2001-02 permanent departures numbered 48,241 compared with an average of 30,539 over the previous 14 years. In 2002-03 there was a further 4.6 percent increase in outflow, which reached 50,463 persons. In 2003-04 there was an even greater increase of 17 percent to 59,078 and in 2004-05 by a further 6 percent to 62,606. In 2005-06 it increased by 8 percent to 67,853 and in 2006-07 by 6 percent to 72,103. Moreover, the proportion of the departures made up of Australia-born persons has increased more rapidly than the total outflow. The numbers of Australia-born leaving permanently doubled in the five years and in 2005-06 they made up 50.5 percent of permanent departures. A similar pattern is evident in long term emigration especially that of Australian residents out of Australia. Australian data rely on persons leaving the country indicating their intentions as to whether they would return and when. There are problems associated with the reference to ‘intentions’ as the key element in the definition of emigration, because there are no guarantees that intentions will become reality. Indeed, research into migration intentions indicates that this is often the case. For example, a study by DIMIA of residents leaving Australia ‘permanently’ in 1998-99 found by mid-2003 that 24 percent had returned (Osborne 2004). Of

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course this is counterbalanced to some extent by those who indicate they are leaving Australia on a long term basis but in fact never return. Figure 4.15. Permanent and Long Term Departures of Residents from Australia, 1959-60 to 2006-07 Permanent Departures of Residents from Australia 80,000 70,000 60,000

Number

50,000 40,000 30,000 20,000 10,000

2005-06

2003-04

2001-02

1997-98

1999-2000

1995-96

1993-94

1991-92

1989-90

1987-88

1985-86

1983-84

1981-82

1979-80

1977-78

1975-76

1973-74

1971-72

1969-70

1967-68

1965-66

1963-64

1961-62

1959-60

0

Year Australia-born

Overseas-born

Australian Resident Long Term Departures from Australia 120,000

100,000

Number

80,000

60,000

40,000

20,000

2004-05

2001-02

1998-99

1995-96

1992-93

1989-90

1986-87

1983-84

1980-81

1977-78

1974-75

1971-72

1968-69

1965-66

1962-63

1959-60

0

Year

Source:

DIMIA, Australian Immigration Consolidated Statistics and DIAC Immigration Update, various issues

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The destinations of recent permanent departures are depicted in Figure 4.16 and it is apparent that the dominant destinations are other developed nations including the following: • The largest flow is to neighbouring New Zealand with which Australia has a special arrangement which allows more or less free mobility between the nations (Bedford, et al. 2003). • The second largest flow is to the United Kingdom which partly reflects longstanding linkages having their origins in colonial times as well as the new role of London as a global city attracting highly skilled Australians (Hugo 2005d). • The third largest flow is to the United States and this is the fastest growing emigrant flow associated with the central role of the destination in the global economy especially the cities of New York and Los Angeles. • There is a substantial movement to Continental European nations. This is partly return migration of former settlers but is increasingly involving the Australia-born – especially the second generation children of former settlers, many of whom have become dual citizens. Again the movement is overwhelmingly to large cities in Europe. • There is a substantial flow to Asia but it is overwhelmingly directed toward the high income rapid growth city-states of Hong Kong and Singapore but increasingly too to rapidly growing China. The Asian movement is almost totally to the megacities of the region. Figure 4.16. Australia: Total Permanent Departures, 1993 to 2006

Source:

DIAC, Immigration Update, various issues

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It is apparent that global cities are a key component in the Australian diaspora indeed virtually all emigrants move to major cities. To take the example of the United Kingdom, the 2001 census detected 107,866 Australiaborn residents and of these 41,486 (38.5 percent) lived in the London region. As the scale of emigration from Australia has increased, there has been increased attention devoted to the whole concept of diaspora and diaspora policy. The increased scale of the exodus was significant enough to warrant an Australian Senate ‘Inquiry Into Australian Expatriates’ in 2003 with the following terms of reference: • The extent of the Australian diaspora. • The variety of factors driving more Australians to live overseas. • The costs, benefits and opportunities presented by the phenomenon. • The needs and concerns of overseas Australians. • The measures taken by comparable countries to respond to the needs of expatriates. • Ways in which Australia can better use its expatriates to promote economic, social and cultural interests. New Zealand has a similar scale outflow as does Australia but this makes it larger in relation to the resident population and concerns, sometimes under media headlines such as ‘brain drain’, are frequently expressed about these flows. Diaspora is an important issue for New Zealand and Australia individually, but Australia is central in relation to New Zealand’s diaspora. In New Zealand, Gamlen (2007) notes the problems of counting the number of New Zealanders living overseas and points to a range of estimates from 459,322 (Bryant and Law 2004), 528,597 (Migration DRC 2007), 600,000 (Bedford 2001) and 850,000 (Hugo, Rudd and Harris 2003). Gamlen comments that estimates of 1 million or more also regularly appear in the media. In part, the differences in estimates relate to whether individuals are counted or whether whole family units, a significant number of whom are not New Zealand born and/or are not New Zealand citizens, are counted (KEA 2006). A further complicating factor in counting, but also in relation to diaspora policy, is that a significant number of New Zealand citizens living overseas also have citizenship of another country. 13 However, what is clear is that New Zealand’s diaspora is at the high end of industrialised countries with, depending on which estimate is used, between about a tenth or a fifth of the total New Zealand population, and perhaps up to quarter of its tertiary qualified workforce, living overseas at any one point in time (Gamlen 2007). While New Zealanders have been identified as living in over 150 countries around the world (KEA 2006), the key location is Australia with, according to Bedford (2006), over 400,000 New Zealand citizens living in Australia. But there are also important 1

13

The KEA (2006) survey, Every One Counts, showed that one-third of expatriate New Zealand citizens surveyed also had citizenship of a second country, over half of their spouses or partners were not New Zealand citizen and, if they had children, over twothirds of their children either did not have New Zealand citizenship or had another citizenship as well.

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populations in the UK, Canada and the US (Bryant and Law 2004). 14 Of particular note are the large numbers of Maori living in Australia 15. Hamer (2007) estimates that in 2006, one in seven Maori lived in Australia. New Zealand’s diaspora prompts concerns with these worries regularly highlighted in the media (e.g. Davis and Thomas 2005, and specifically in relation to Australia, Toevai and Kiong 2007). This is despite research suggesting that 1) with high levels of both inward and outward migration, these flows can be better portrayed as ‘brain exchange’ (Glass and Choy 2001), 16 2) a significant number of New Zealanders living overseas return to New Zealand, often bringing back with them higher levels of skills as well as investment capital. There are both push and pull factors in New Zealand’s diaspora. Some of these can be illustrated in relation to movements to Australia. Long-term data suggests that there have been significant flows of people between New Zealand and Australia since the late 1880s (Poot and Sanderson 2007). The overall direction of the flows can be linked to relative economic performance of Australia and New Zealand’s economies and, ultimately, the performance of their labour markets. Poot and Sanderson demonstrate that from the late 1880s through to the early 1960s there were periods where there were more Australian citizens living in New Zealand than New Zealand citizens living in Australia, but since this time the balance has tipped strongly towards Australia. Yet, when they calculate these populations as percentages relative to the total population of each country, with Australia having a population about five times that of New Zealand, the proportion of Australians living in New Zealand and New Zealander living in Australia are similar. However, macro-economic growth and income data suggest an overall income gap has developed in favour of Australia. Yet, Grimes (2004) suggests that it is more appropriate to consider New Zealand as a ‘region’ of Australia, and examines income differences and labour flows on a regional based. He demonstrates that real GDP per capita growth per annum between 1990-2003 in New Zealand was 1.6 percent, but that it was higher in New South Wales (2.0 percent), Queensland (2.2 percent), Victoria (1.9 percent) and Western Australia (2.2 percent). In comparison growth was lower in South Australia (1.5 percent) and Tasmania (1.2 percent). Grimes notes that aggregate employment growth in New Zealand was negatively affected by job shedding during the mid 1980s to early 1900s but even since the mid-1990s growth has 1

1

1

14

15 16

Bryant and Law (2004) make the point that while that New Zealand’s diaspora is spread over many countries, overall the diaspora is more concentrated in particular countries when compared with the countries that New Zealand’s overseas born population come from. In terms of forging trade and investment links into overseas markets, Bryant and Law suggest that focussing on the overseas born population living in New Zealand may be more successful than trying to use New Zealand’s diaspora as ‘overseas ambassadors’. Maori are the indigenous population of New Zealand. There remains a question of whether migration policy should aim for a ‘brain gain’ rather than simply an ‘exchange’ and, if so, whether this goal in a small middle income country such as New Zealand would be achievable.

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not been faster than in Australia. Grimes also shows that when industries are considered NZ structure has bigger share of agriculture, forestry and fishing as well as related processing, and less employment in often high-income areas such as investment sectors and business and financial services. Some of the industries within these sectors, such as investment banking and advertising, are tending to concentrate in large regional cities, so are more likely to locate in Sydney or Melbourne in Australia, rather than Wellington or Auckland in New Zealand. The flows of New Zealanders to Australia also provide and illustration of the mobility of labour and how concepts of permanent versus temporary migration are increasingly outdated. Poot and Sanderson (2007) show that amongst ‘permanent’ Kiwi settlers to Australia, one third re-migrates within three years. However, they note that New Zealand citizens living in Australia, but born outside NZ, are less likely to remigrate to New Zealand. Gamlen (2007) argues that New Zealand’s diaspora deserves higher policy attention than it currently receives, and this policy focus needs to be more coherent, holistic and long-term. He argues such an approach may help the state to reduce the downside of emigration and the diaspora, including the recurrent political exposure to the charge of causing or allowing a ‘brain drain. He argues a first requirement of such an approach is to acknowledge that New Zealand’s population is transnational and to re-conceptualise the role of the state within it.

Low Skilled Migration Most recent policy concern in Australia and New Zealand has centred in shortages of high skill labour. However, strong economic growth since the mid 1990s has translated into strong employment growth, including in recent years among the unskilled/low skilled. Some of the industries that have grown the fastest are highly labour intensive and use a large number of low-skilled workers. Sectors that have contributed to growth include construction and services such as tourism, health, education, wholesale trade and retail trade, and some parts of the horticultural industry. This has already resulted in shortages of low-skill workers in some of these industries and this constrains growth. Looking ahead, there are indications that, alongside the on-going demand for high skill workers, there will continue to be demand for low skilled workers in these types of industries, including caregivers in institutional settings to support an ageing population. But there is also potential for growth in demand for domestic workers. In many areas of Europe, the United States, and in high income regions within Asia and the Middle-East relatively low-skilled immigrants, from countries such as the Philippines, Turkey or Mexico are overrepresented amongst those who are employed by high-earning families to provide services in jobs such as nannies, gardeners, and house cleaners and, for older people, home care workers. In New Zealand, this has not taken place to any major degree. There are a number of reasons for this. One is that the government, though both funding and regulation, has ensured that the out-ofhome childcare sector offers high quality childcare, provided by tertiary trained teachers, at relatively low cost to parents. However, other important reasons are:

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1) given its geographic isolation, illegal migration is difficult; 2) government has severely restricted low skill migration. Immigration is able to play a key role in alleviating current and future shortage of unskilled labour in Australia and New Zealand as there is a virtually unlimited supply of unskilled labour available worldwide, including from some non-traditional sources of labour such as Melanesia. Low-income workers can be brought to high-income countries, often on a temporary basis, and sometimes illegally, to undertake low skilled work. While employers are likely to push for more low skilled migration in key industries, government could also be under increasing pressure to change its policy stance with regards to unskilled workers. A number of important policy questions need to be considered in relation to the possible expansion of low skill migration. These include: • Does the use of immigration to fill vacancies take away the incentive to innovate and find alternative, perhaps technologically based, solutions and should industries that depend on low skill labour be supported or should they be squeezed out of the economy? • Alternatively, are certain labour intensive sectors, such as care giving, providing essential services and will become increasingly important as the population ages and by their nature are unable to substitute technology for labour? Do we support these sectors through immigration or constrain them until they improve wages and working conditions? • Does the nature of many types of unskilled work (e.g. seasonal work) make immigrants vulnerable to spells of unemployment and the need for benefits? Does this vulnerability create the opportunity for employers to exploit unskilled immigrants? Is there the possibility of developing a large group of workers who have fewer rights than Australian and New Zealand citizens? • If unskilled immigrants are from countries with low living standards is there a risk of non-compliance with permits, especially with regard to returning home after the expiry of the permit. • Is there a potential for strongly gendered migration, for example, it would be mainly women filling caregiver jobs. How do should we be thinking about individual versus family migration in relation to low skill workers? • How do we select low skill migrants? Do we give preference people from particular countries? • How will low skill migration impact on managing diversity in Australia and New Zealand, especially considering many low skill migrants will come from areas with different religious beliefs and cultural practices to that of mainstream New Zealand and Australia? • Is there a need for Australia and New Zealand to consider low skill migration in tandem with each other, given that there are not only common issues but also that there is free movement across the Tasman? Historically Australia has been concerned about ‘back door’ migration from New Zealand to Australia.

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A Special Relationship with the Pacific? Population growth is strong in Melanesia, the population is young, poor and mainly rurally based. Currently, unlike many other Pacific nations, the main countries of Melanesia have no outlets, including New Zealand, for low skilled migration. The World Bank (2006b) has argued that greater labour mobility would expand the employment options available to those living in the Pacific, particularly in Melanesia. But currently such mobility is limited and favours skilled workers. Bedford (2007) has suggested that ‘the most contentious demographic issue confronting Australia and New Zealand in the Pacific in the Pacific during the next half century will be how to cope with pressure for an emigration outlet from Melanesia.’ He suggests that long term development in Melanesia will depend heavily on opportunities for young people to travel overseas for training and employment. It has been shown above that New Zealand has entered into special migration relationships with the Pacific, albeit in a limited way, than Australia. There is a ‘Pacific Access Category’ which provides limited access to migrants from Tonga, Kiribati, Tuvalu and Fiji, the Samoan quota category and the new Recognised Seasonal Employer Scheme. There is an increasing debate in Australia, however, on the possibility of having a special migration relationship with the Pacific. Understandably this has been strongly influenced by the growing international discourse on migration and development (GCIM 2005; World Bank 2006a; United Nations 2006a). The focus in the migration and development literature is largely on what Less Developed origin countries can do to enhance the contribution of their expatriates to economic and social development at home. However, since OECD nations like Australia espouse a wish to encourage and facilitate the progress of less developed nations, it is important to ask whether in destination countries there are some policies and programs relating to migration and the diaspora which can facilitate and enhance their positive developmental impacts in origin areas. There are two particular barriers to destination nations like Australia becoming more ‘development friendly’ in their immigration policy: • A strong tradition of immigration policy being conceived in relatively narrow national interest terms. • The siloization of government policy making and practice which separates immigration and development assistance activities. Nevertheless in line with the increasing global significance of migration and development discussions, the issue has been raised in Australia. The following issues have been especially prominent (Hugo 2005a): • Whether Australia should consider modification of its immigration policy and allow temporary migration of particular groups of unskilled migrants. Such programs to be focused on neighbouring countries where it has been shown that remittances can and do have significant positive effects (especially the Pacific and East Timor). • Whether the impacts of climate change effects on low lying countries needs to be factored into immigration policy. In particular with Pacific nations like

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Tuvalu being increasingly influenced by rises in sea level, should Australia have a program to relocate Pacific Islanders displaced by the effects of climate change? It has been suggested that it may be that injecting a ‘development friendly’ component into immigration decision making discussions could have ‘win-win’ results for both origin and destination country. This debate in Australia has been limited thus far but has increased following the UN High Level Dialogue on Migration and Development in August 2006.

Free Trade Agreements and Migration in Australia and New Zealand Australia and New Zealand, like other countries in the region, have been active in the signing of Free Trade Agreements. Most have limited consideration of international migration focusing only on corporate or other company transfers or professional and high skilled migrants. One recent example is that in April 2008 the government of New Zealand and Peoples Republic of China signed a bilateral free trade agreement (FTA). While primarily covering trade in goods and services the China New Zealand FTA also allows for the movement of people. The FTA allows for visa applications by New Zealanders visiting China for business purposes to be processed quickly. This means that New Zealand service suppliers will be providing entry of up to three months for installers and servicers, and business visitors will be granted a maximum period of stay of six months (previously this was 90 days). Other provisions under the China New Zealand FTA allow the entry into New Zealand of Chinese business visitors and installers/servicers for up to three months in any calendar year. Executives and managers are permitted to enter New Zealand for up to three years. Specialist personnel may also enter in these sectors for an initial period of up to three years, and can this can be extendable for up to a further three years if the need for the specialist still exists. Alongside the FTA, New Zealand has also established a working holiday scheme with China with allows for a maximum of 1000 Chinese nationals aged between 18 and 30 to enter New Zealand annually. The scheme will allow young skilled Chinese to engage in tourism and incidental employment in New Zealand.

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Chapter 5 Demographic Change and International Labour Mobility in the Pacific Americas – Issues, Policies and Implications for Cooperation Sherry Stephenson

Introduction The PECC countries of the Pacific Americas have had varied experiences with international labour mobility and it has become an increasingly prominent feature of their economic and social landscape. While the two developed PECC members in the hemisphere – Canada and the United States – have been net labour recipient countries throughout their history and more so recently, the four developing Latin American PECC members – Mexico, Colombia, Peru and Chile – have been net exporters of labour. The net labour recipient countries are experiencing shortages in certain worker categories, particularly those of skilled labour, but are hesitant for social and political reasons to aggressively expand their intake of immigrants. While they encourage immigration by skilled professionals, academics and executives, they have in place a much less clear policy towards the acceptance of unskilled labour. For three of the net labour sending countries in Latin America (Chile being the exception), outward migration flows, both temporary and permanent, have expanded tremendously over the past 15 years. For these countries, flows consist of both semi-skilled and unskilled workers on short term contracts (overseas contract workers) or at times, under an irregular work status. Demographic changes in the Americas are contributing to the need for greater labour flows, as the population is ageing more quickly in Canada and the United States than in Latin American countries. More than half of the population in Colombia, Mexico and Peru is under 15 years of age. These changes in population structure will mean greater labour shortages in the future in the developed economies and greater pressure for both temporary and permanent labour flows to sustain the momentum of economic growth and to care for the elderly. Because of their different perspectives, labour mobility through migration has had differing types of costs and benefits, being generally very beneficial for the recipient countries, and of a mixed nature for the sending countries. It is difficult to obtain an accurate estimate of the magnitude of temporary migration, as most outward and inward migration data generally do not separate out

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temporary from permanent migrants. However, the magnitude of overall migration has clearly been increasing for all PECC members in the Americas over the recent period. Migrants contribute significantly to the US and Canadian economies, and the Hispanic voice, particularly in the US, has become an important political and social influence over the past decade. While some free trade agreements among PECC members in the Americas such as NAFTA and the agreements between the United States and Chile, and Canada and Chile, have included provisions to facilitate the temporary movement of skilled personnel and business persons, the more recent agreements between the US and Peru and the US and Colombia, have not included such provisions. Some of these agreements have been helpful in promoting temporary labour mobility, but their focus has been only on skilled professions; unskilled labour is not covered. There are a few examples of bilateral agreements among countries in the Americas that regulate the temporary flow of unskilled labour, but these are not numerous. Recently the benefits of labour mobility have been strongly felt through an expansion of remittances, which represented nearly three-fourths of foreign direct investment in Latin America in 2007 and are five times larger than Official Development Assistance. The region of Latin America and the Caribbean tops the list of developing regions in terms of the importance of remittances for their economies. There has been some indication in recent studies that remittances have contributed to economic growth and poverty reduction in Latin America, but both in very modest proportions. The PECC studies show that remittances have become extremely important for the economies of Mexico, Colombia and Peru. In terms of policies towards migration, the studies carried out for the PECC show that both Canada and the United States have in place a very elaborate visa program with several different categories for admittance of temporary workers, although it is not clear to what extent this constitutes a policy framework and strategy for handling labour migration. The general public in these labour receiving countries is concerned with the social impact of a large immigrant workforce on the demand for public services and social cohesion, although more recently the major concerns expressed have been with the potential loss of jobs to foreign workers in a situation of economic recession. In Latin America, both the governments of Colombia and Peru have developed a recent, forward-looking policy strategy for migration and passed legislation to ensure rights and opportunities for returning migrants. Although Mexico has a law on migratory policy, it is apparently out-of-date and needs revision. Chile does not have specific programs or legislation regarding return migrants or the promotion of migration, since the phenomenon is much less significant. However, the three Latin American Pacific economies with abundant labour resources seek a more liberalised flow of labour, either through formalized trade agreements or through more informal, specific bilateral sectoral agreements. For these economies, labour is viewed as a source of comparative advantage that cannot fulfil its economic role without being allowed to be internationally mobile, like the role played by international capital movements.

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This regional synthesis paper provides an overview of the following for the PECC countries of the Pacific Americas: (a) demographic change as a determinant of international labour migration; (b) magnitudes, trends and patterns of international labour migration, both inward and outward, focusing on temporary migration; (c) benefits and costs of labour migration for labour sending and labour receiving countries, including key issues and concerns; (d) labour migration policies and practices of both labour sending and labour receiving countries; and (e) the scope for regional cooperation on labour migration.

Demographic Change in the Pacific Americas The Pacific Americas is in the midst of a significant demographic transition, characterized by a change in the age structure of the population, with the share of youth falling and that of the elderly rising, as the population pyramids in Figure 5.1 below indicate. The region has experienced the same trends that the world population has undergone in the last two centuries. Before 1900, world population growth was slow, the age structure of the population was broadly constant, and relatively few people lived beyond age 65. This began to change during the first half of the twentieth century as rising life expectancy boosted population growth, although initially there was little change in the age structure of the population. The second half of the twentieth century saw the start of another phase in this transition; fertility rates declined dramatically—by almost one-half—causing population growth to slow, the share of young people in the population to decline, and, with improvements in health care and longevity, the share of the elderly to increase. The share of the working-age population, however, changed little. In the 21st century, however, this picture will change. For the Pacific Americas, while the population structure was still very solidly a pyramid shape in 2005, by the year 2040 it is projected to transform into a beehive shape, as the numbers of youth shrink in greater proportion than the increase in the numbers of the elderly. Figure 5.1. Population Pyramids for the Pacific Americas, 2005, 2020 and 2040

Source: United Nations

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Specialists in demographic change believe that population aging will reduce growth, affect saving, investment, and capital flows. In this regard, countries in the Pacific Americas may experience, by 2040, declines in saving and deterioration in current account positions as the elderly run down assets in retirement. Figure 5.2. Evolution of the Dependency Ratio in the Pacific Americas 0.4

500

0.35

400

0.3

350

0.25

300

0.2

250 200

0.15

150

0.1

100

0.05

50 0

0 1990

2000

2010

2020

2030

2040

DEPENDENCY RATIO

WORKING POPULATION (thousand)

450

2050

Source: United Nations

The ratio of the economically dependent part of the population to the productive part in the Pacific Americas is projected to increase considerably by 2050, as can be seen in Figure 5.2. The economically dependent component is comprised of children who are too young to work, and individuals who are too old, that is, generally, individuals under the age of 15 and over the age of 65. The productive component makes up the age groups between ages 15 and 64. The ratio for countries in the Pacific Americas (which has been stable from 1990 to 2010, at 0.175), is shown in Figure 5.2 to increase sharply after 2010. This ratio is projected to double by the year 2050 reaching 0.35. Such a rapid transformation in population structure will generate a large strain on the productive part of the population to support the upbringing of the young and the pensions of the elderly. These demographic changes in the region will most likely generate direct impacts on the financial stability of governments as well, including on the total tax base, on the provision of social security payments and the provision of services by the state to the elderly.

Importance of Migration for Recipient and Sending Countries Migration has become a very important part of the economic landscape of the Americas in the past few years. In the year 2005, there were 51 million migrants in the Americas, of which the large majority (44.5 million) was living in North America, and the remaining 6.6 million distributed throughout Latin America and the Caribbean. Migrants represented 13.5 percent of the total

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population of North America in 2005, but only 1.2 percent of the total population of Latin America. 17 Migration flows in the Americas are largely a South-North phenomenon, with 87 percent of all migratory movements going from Central and South America (as well as from Mexico) to Canada and the United States, making this the highest rate of South-North migration in the world, according to the University of Sussex. 18 Migration towards developing countries in Latin America and the Caribbean thus constitutes only 13 percent of total migratory flows in the Americas. Between 2000 and 2005, the number of migrants from Latin America and the Caribbean is estimated to have increased by 4 million people. This substantial number was the result of several factors, including less desirable economic situations at home, social conflicts and violence, natural disasters and environmental degradation. However, a large number of new migrants have also responded to family ties that have been created by previous waves of migrants now settled in well-established communities in their northern neighbours. This section of the paper summarizes the information that was provided by the country experts in the studies that they submitted with respect to the statistical information on the magnitude and trends of inward and outward movement of migrants in the individual six PECC members of the Pacific Americas. 1

1

Magnitude of Immigration and Trends for Recipient Countries’ Martin and Lowell (2008), indicate in their study that immigration into the United States has been on the rise over the past three decades, with 4.3 million foreign-born workers in 1970, 11.4 million by 1990 and 21.2 million by 2004 (an increase from 5.3 percent to 14.5 percent of the total labour force). The foreign-born working population makes up about 15 percent of all workers at present in the US, in both the least skilled and highly skilled segments of the work force, as shown in Figure 5.3. By 2000 the foreign-born population had moved away from its European origins to become dominated by Latin Americans (52 percent of total, with Mexico constituting 30 percent of that figure) and Asians (26 percent). The Asian presence has grown extremely fast, increasing nearly threefold in three decades (from 1970 to 2000) and almost matches the proportion of Mexicans. Of course these figures cover both permanent and temporary migrants. Unauthorized migrants have also increased in the United States and the authors indicate that by 2004 the best estimates put the number of unauthorized workers at the high mark of 6.3 million or 4.3 percent of the total US labour force, and 30 percent of all foreign-born workers. Migrants into the US fall at both ends of the educational distribution, with about one-third not having attained a high-school education, while a significant number are college educated. Compared to the US population, Latin American 17 18

Department of Economic and Statistical Analysis, United Nations, 2005. University of Sussex and the World Bank, 2007

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immigrants are relatively poorly educated while Asian immigrants are very well educated. Figure 5.3. Origin of Foreign Born Population in the United States Other regions 8%

Caribbean 10.1%

Asia 25% Central America 36.9%

Europe 13.7% South America 6.3% Source: US Central Bureau

Figure 5.4. Canada: Foreign-Born Population, 1930-2001

Source: Statistics Canada

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Figure 5.5. Origin of Immigration to Canada, 1991-2001 (in percent) Africa 8%

United States 3%

Caribbean, Central & South America 11%

Asia 58% Europe 20%

Source: Statistics Canada

Sas (2008) indicates in her study that Canada currently has a severe labour shortage, which immigrants are helping in part to fill. The foreign-born population represented 18.4 percent of Canadian population in 2001 (Figure 5.4). Statistical records in Canada do differentiate between permanent migrants and temporary migrants, the latter composed of visitors, students and temporary workers. The intake of permanent migrants has increased slightly over the past decade, rising from 216,000 in 1997 to 251,000 in 2006. Of the source countries, the five largest are the People’s Republic of China, India, the Philippines, Pakistan and the United States, composing 40 percent of the total, as shown in Figure 5.5. With regard to temporary migrants into Canada, the increase over the past decade has been slightly greater, rising from 75,000 in 1997 to 113,000 in 2006. The largest sending countries for temporary migrants are by far the United States and Mexico, most likely facilitated by the chapter on temporary entry of business persons under the NAFTA. These are followed by France, the Philippines, Australia and the United Kingdom, with these six countries comprising fully one-half of temporary migrants. However, Canada’s temporary migration movement is inextricably linked to the permanent immigration process both in law and in practice. There is no indication in the study of the number of unauthorized workers.

Magnitude of Migration and Trends for Sending Countries’ Morales (2008) focuses the information in the study almost exclusively on the emigration pattern of Mexicans to the United States. The migration from Mexico has been massive and uni-directional for the past forty years. She writes of an ‘unprecedented’ increase of permanent migrants (or those who establish a

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more or less fixed residence) from Mexico to the United States between 1970 and 2003, rising from 5.4 to 26.7 million. About 3 percent of the population of Mexico lives in the United States, of which 10 million are migrants and more than 16 million are of Mexican origin, born in the United States and called ‘Mexican Americans’. No figures are given for strictly temporary migrants; however, the majority of these appear to be seasonal workers, in either agriculture or industry, with three-quarters (75 percent) of this category unauthorized, or having no papers. Of those documented, many are employed as temporary workers in the agricultural sector with an H2A visa and with an H2B visa in other sectors such as construction, factories or as household labour. These two visas are for workers with low-level skills and basic schooling. The average stay of the temporary migrant worker from Mexico has gradually increased, from five to twelve months, explained as the author comments, by the increase in vigilance along the southern border of the United States. The complex set of family relationships already established by previous Mexican migrants that link places of origin in Mexico to destinations in the US, helps to perpetuate migration towards certain regions. The study cites figures that show that Mexicans constitute nearly 60 percent of the Latino population in the United States at present. In terms of skill levels, Mexican emigrants are less well educated than others, with only 7 percent being professionals and 85 percent with less than a high school education. However, the author mentions that the profile of the Mexican immigrant is changing toward one who is increasingly urban and with a greater participation of women. In the US, only one out of every five Mexicans has US citizenship. With respect to inward migration, the author mentions the influx of migrants into Mexico from the neighbouring countries of Guatemala, Honduras and El Salvador, as well as several South American countries, many of these unauthorized. In 2004 alone, over 200,000 people were deported from Mexico. She also points out that Mexico has historically been a haven for political refugees from all over the world. Martinez (2008) points out that in 2002 migrants from Chile totalled 857,781 people, representing 5.6 percent of Chileans living in Chile, as shown in Figure 5.6. There are Chileans living in more than 100 countries, with the majority (61%) in South America. Argentina alone receives more than half of Chile’s emigrants and is also the main source country of migrants to Chile. In second order of importance is North America, followed by Europe (18.3 and 14.6 percent of migrants, respectively). Migrants from Chile are less well educated than the average Chilean; 40 percent of migrants have not gone beyond primary school in their education (however, this decreases to 15 percent when migrants to Argentina are excluded). Migration to North America and Europe tends to be by well educated and well trained Chilean nationals, where one-third of migrants to these destinations have a university degree or higher. In terms of inward migration, there has traditionally been only a small migration into Chile. In 2002, only 1.2 percent of the population in Chile was foreign-born. As a share of the population, migrants decreased drastically between 1970 and 1980, but their numbers rose by 5.8 percent between 1982 and 2002, the latest year for

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which census figures are available. These figures are most likely somewhat higher at present. Most immigrants are from Latin America, with Argentina and Peru the major source countries. In terms of unauthorized immigrants, the author states that there are not good estimates for this. However, a regularization program was carried out in 1998 which issued 44,000 temporary visas. A second regularization program was launched in 2007, at which time over 50,000 foreigners applied and 43,646 obtained visas. Based on these numbers, the author estimates that approximately 27 percent of those would have been illegally in the country, most of them from Peru and Bolivia. Figure 5.6. Chileans Abroad, 2003-2004 (in percent) Others 6.1%

Europe 14.6%

South America 61%

North America 18.3%

Source: Solimano and Tokman (2005)

Figure 5.7. Colombians Abroad, 2005 (in percent) Other 14.8%

Mexico 1.1% Panama 1.3% Canada 2.4%

US 35.4%

Equador 2.4%

Venezuela 18.5%

Spain 23.3%

Source: Departamento Administrativo Nacional de Estadistica (DANE

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Cardenas and El Kareh (2008) indicate that in 2005, over 3 million Colombians were living outside of Colombia, or around 8 percent of the population, as shown in Figure 5.7. This figure has more than doubled over the past two decades, since 1985, when it stood at 1.5 million. The largest destination country for Colombian migrants is the United States, receiving more than one-third of the total, followed by Spain and Venezuela. Together, these three countries take nearly 80 percent of Colombians living abroad. Contrary to most Latin American countries, Colombia has not experience significant immigration flows and foreigners residing in Colombia accounted for less than 0.8 percent of the population in 2005. Aguilar (2008) writes that during the last 18 years nearly two million Peruvians left the country temporarily or permanently, with two-thirds of these in the Americas and 28 percent in Europe. In 2006, migrants from Peru represented 12.5 percent of Peru’s population, as shown in Figure 5.8. The major recipient country for Peruvians emigrants is the United States (one-third), and 84 percent of Peruvians have located in just seven countries (the US, Argentina, Spain, Italy, Chile, Japan and Venezuela). About 46 percent of Peruvian emigrants have settled in the Asia-Pacific region, with the large majority in the US The Peruvian migrant population is relatively young, going abroad between the ages of 15 and 35. Interestingly, the majority of emigrants are now women, many of them seeking employment in health care and domestic care of children and elderly. Figure 5.8. Peruvians Abroad, 2006 (in percent) Asia 4%

Oceania & Africa 0.7%

Europe 28.3%

America 67%

Source: Encuesta Nacional Continua (ENCO)

Type of Migration and Reasons Behind Labour Mobility The authors of the country study for the United States point out that the reason behind the large recent increase in immigration has been the strong dynamism of

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the US market and the pull of economic factors, particularly the economic and development gap that differentiates the US from the Latin American economies. For the better educated immigrants, the pull of the professional US job market has been very important; many highly skilled professionals, especially in the information technology sector, have stayed on in the US after completing their university education and have transformed their visa status. For Canada as well, the main factors behind the large immigration have been the pull of a more dynamic economy, together with the generous social services offered to immigrants once they are in the country. In the case of the Latin American PECC members, all four authors of the country studies for Mexico, Chile, Colombia and Peru mention economic incentives are the major reason behind outward migration. Most migrants move for an economic or a family reason. Morales (2008) mentions the large gap in both salaries and income levels between Mexico and the United States that attracts emigrants, as well as the highly-developed family networks that allow new arrivals to settle in and benefit from existing infrastructure. There are Mexican communities in more than 40 US states; most of these emigrants come from five Mexican states: Jalisco, Guanajuato, Zacatecas, San Luis Potosi y Michoacan. These communities were initially created through migration flows in the first half of the 20th century, pushed by political instability and large economic and social inequalities in Mexico. But as many of the migrants stayed on, the families that have taken root have continued to generate further migratory flows. Martinez (2008) writes that in Chile around 40 percent of migrants have moved abroad in response to economic incentives, while 31 percent have done so for a family motive. Between 1971 and 1980 one-fourth of all outward migration from Chile was because of political reasons, but this motive has disappeared at present. Cardenas (2008) states that most Colombians who emigrate do so because they are attracted by better working opportunities and higher salaries abroad but that recently, the informal sector has also been an attractive magnet. Aguilar (2008) writes that Peruvians emigrate principally in order to obtain employment, improve their income and living conditions for themselves and their families. The disequilibrium in the labour market between the supply of labour and the demand for employment, due to the growing population and the low levels of output, has resulted in a strong migration from the interior of the country to the cities and has pushed many Peruvians abroad. Additionally, like Mexicans, Peruvians rely on a family chain and an organizational structure in the main recipient countries (the US, Spain, Italy, Argentina) that facilitates the arrival of new migrants. Aguilar (2008) cites a recent poll indicating that among university students in Peru, 55 percent said that they had plans to leave the country either to study, work, improve their quality of life and/or for other reasons.

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Benefits and Costs of International Labour Mobility There are many aspects of the costs and benefits of international labour mobility for both the sending and the receiving countries that were pointed out in the studies, some which are more easily quantifiable than others and which are reviewed below.

From a Host Country Perspective The authors of both the US and the Canadian country studies discuss the economic impact of immigrants in terms of the effect on wages and employment as well as the fiscal impact of immigrants. For the US, Martin and Lowell (2008) indicate that the federal government takes in more taxes from immigrants than it pays out in services or programs. They state that young immigrants generate net fiscal benefits but that the overall impact would depend upon the type of immigrant and the differences in earnings. In terms of wages and employment, the greatest adverse impact of immigrants is on native low-skilled workers, but these effects tend to be concentrated in cities where large numbers of immigrants settle. In fact, the largest negative impact tends to be on other recent immigrants. However, it is clear that emigrants enter into occupations where the native work force does not wish to function; for example, in California over 90 percent of the workers in the agricultural sector are from Mexico. This vital role of immigrants in crucial economic activities is often overlooked when discussing the costs and benefits of immigration. For Canada, immigration is viewed as a partial solution to the country’s large labour deficit and to keep the economy dynamic.

From a Sending Country Perspective From the sending country perspective (Mexico, Colombia, Peru and to a lesser extent, Chile), the most important benefit of international labour mobility has become the remittances sent back home by their nationals living abroad. The region of Latin America tops the list of developing regions in terms of the importance of remittances. Indeed, Latin America was the region that received the largest volume of remittances in 2006: about $52 billion. Latin America is the top recipient region in the world of remittances both by volume and in percapita terms. This has been to a large extent a recent phenomenon, since just two decades ago, remittances to Latin America represented only one-tenth of their current value in real terms. In nominal terms, remittances to Latin American have multiplied by 25 over the past 25 years and today represent about 75 percent of foreign direct investment flows to the region and are almost eight times larger than official development assistance flows (World Bank, 2007). For some analysts, the growth of remittances has allowed Latin America to reduce somewhat its extremely high and prevalent levels of poverty, as remittances have been used as income supplements, spread thinly over many small households. Higher remittances levels have been associated with lower

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poverty levels and improvements in education and health of the recipient countries (World Bank, 2008). A 2007 World Bank study found that workers’ remittances have been a growing phenomenon in the economies of Latin America, rising significantly from 0.7 percent of GDP on average in 1991-1995, to 2.3 percent of GDP in 2001-2005. Although the authors attribute to remittances an overall positive impact on the economies of recipient countries in Latin America, they are shown to have accelerated growth rates only in very modest proportions, by a small 0.25 percent in the recent period. While they have had an impact on individual households, they have not added significantly to the stock of investment capital. With respect to poverty reduction, the impact of remittances has been positive but rather modest. The Bank study indicates that on average, an increase of one percentage point in the ratio of remittances to GDP would be associated with a decline in poverty of about 0.4 percent. (World Bank, 2007, 58). Part of this is due to the fact that remittances are generated by incomeearners who leave the household to work abroad. Thus, once reductions in the earning generating potential are taken into account through these absences, then the increase of net income from remittances falls well below actual observed remittances inflows. For this reason, the potential of remittances to reduce poverty levels and income inequality is modest. The impact of remittances on financial development has also been weaker in Latin America than in the rest of the developing world, partly due to a lack of access to financial services by the poor and the lack of integration of migrants with their financial institutions back home. Regulatory obstacles in the form of impediments to opening bank branches and the non-allowance of any other than traditional methods of delivering banking services, have also contributed to this outcome (World Bank, 2008). The relatively small impact of remittances overall is also due to factors in the receiving country that do not allow for this money to be used as effectively as possible, namely: poor educational systems and poor quality of institutions. However, on the whole, the World Bank study concludes that remittances have been positive for Latin America and have helped to contribute to the ‘engine for development’ but finds that they can only be truly effective when placed in the context of sound development policies (World Bank, 2007, 59). The ability of countries to benefit from remittances thus very much depends upon what type of economic and social framework the remittances encounter in the recipient environment. For three of the four Latin American countries in the PECC Project, remittances have become an extremely important part of their economies. For Mexico in particular, this has become a factor of high economic significance. In terms of volume, Mexico is the country in Latin America with the highest absolute remittances flows. Remittances to Mexico from Mexicans working in the United States have jumped tremendously, increasing from $2.5 billion (US) in 1990 to around $22 billion (US) in 2006 (World Bank, 2008, 4). This would represent 45 percent of total remittances flows to Latin America and would make Mexico the third-largest world recipient (after China and India). Morales

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(2008) writes that more than 70 percent of the funds received are used for subsistence and health, contributing in a large way to supplement basic income for many millions of families. It is estimated that one in every 17 Mexican homes receives funds from money sent back by migrant workers, averaging $2,590 per family in 2002. For Colombia, remittances are the most important source of foreign exchange earnings after oil, representing nearly 3 percent of GDP in 2006. Colombia is among the top 20 remittance-receiving countries in the world, with flows of $3.3 billion in 2005 (World Bank, 2008, page 5). Remittances represented 15 percent of both Colombia GDP and export earnings in 2006, as shown in Table 5.1. Cardenas (2008) writes that remittances currently hold second place in Colombia’s GDP. As in Mexico, the majority of these monetary contributions are used for daily expenses by Colombian families, with a small share going for investment in small companies. Table 5.1. Colombia: Remittances, 2000-2006 Workers Remittances (Millions of US Dollars) As a % of GDP As a % of the Current Income – Balance of Payments As a % of Exports

2000

2001

2002

2003

2004

2005

2006

1,578

2,021

2,454

3,060

3,170

3,314

3,890

1.9%

2.5%

3.0%

3.8%

3.2%

2.7%

2.9%

8.4%

10.9%

13.7%

15.4%

13.1%

11.1%

15.4%

11.5%

15.7%

19.9%

22.1%

18.4%

15.2%

15.4%

Source: Banco de la República de Colombia (Central Bank of Colombia).

Aguilar (2008) writes that over the last 18 years, Peruvians abroad have sent back more than $14.4 billion (US) to Peru. These funds have been received by more than 400,000 homes, helping to offset consumer expenses and improving the quality of life as well as opportunities for education and better access to technology. From 1990 to 2007, the growth of remittances in Peru has been tremendous, rising from $87 million in 1995 to $2.2 billion in 2006, increasing 20 percent just in 2006 alone. The largest growth in remittances has been between 2004 and 2007. Over half of total remittances to Peru originate from Peruvians in the United States (31%) and Spain (16%). For Chile, remittances seem to be of lesser importance and were not mentioned in the study. In terms of cost, the macro-economic impacts of substantial flows of remittances on the receiving countries can be strong. Remittances seem to be accompanied by pressures on the real exchange rate to appreciate, often leading to compensating actions by monetary authorities to minimize the loss of competitiveness. A negative factor associated with outward migration is the loss of skilled professionals, or the ‘brain drain’. This cost was cited by the authors of the studies for Mexico, Colombia and Peru as a mitigating factor offsetting the benefits of remittances. Sanchez (2008) states that between 1994 and 2007, more than 270,000 professionals and technicians emigrated from Peru and have

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not returned, among them professors, engineers, nurses, doctors, lawyers and economists as well as secretaries, bookkeepers and mechanics. Additionally, the majority of those emigrating have been between 20 and 35 years old, reducing the vitality of the working population.

Main Impediments to International Movement of Labour The main impediments to the international movement of labour in the Americas are viewed as being on the side of the recipient countries rather than the sending countries. These are linked to the length of time involved and the lack of flexibility in the processing of visa applications, and the reluctance to increase the number of skilled H1-B visas available for temporary migrants in the United States. In Canada, the problem with processing requests for temporary visas is that the government considers each request against the criteria for permanent residence status, evaluating every potential entry in a long-term light and rendering the notion of ‘temporary’ effectively meaningless. Sending countries are concerned with the treatment of their citizens abroad and with the ability of those citizens to access local education, health care and social services in the recipient countries. However, this was not cited as an impediment to outward migration, which responds primarily to the strength of economic incentives.

Policies Relevant to the International Movement of Labour The authors of the country studies for the PECC members of the Americas focused considerable attention on the different visa programs set out by governments to classify different categories of immigrants, both temporary and permanent. The visa policies with respect to temporary migration are summarized below. In the case of two of the PECC Latin American countries (Colombia and Peru), the governments have also adopted special legislation for migrants, and this is also summarized.

Visa Policies of Recipient Countries Martin and Lowell (2008) write that hundreds of thousands of visas are issued each year by the US to temporary workers and their family members. The main visa admission categories for temporary entrants are the following, with the H1B category being the most well known: E visa for traders and investors entering under bilateral treaties; H1-B for specialty workers; H-2A for agricultural workers: H2-B for other seasonal workers; L for intra-company transfers; J for exchange scholars; O for extraordinary ability in the arts, sciences, education, or athletics; P for artists and entertainers; Q for cultural exchanges; and R for religious workers.

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In the case of visas for temporary entry, the foreign worker is tied to a specific employer, which makes labour mobility within the US impossible. Loss of employment usually also means deportation. A numerical quota imposed in 1990 limited the new H-1B visas annually to 65,000 per year. While this number was increased by Congress in 1999, 2000, 2001 and 2002, it has reverted back to the previous level since then, creating a constraint on the ability of employers to contract skilled labour from abroad and provoking critiques by the private sector of the impact of the policy. Often H-1B visas are filled within the first two or three months of the year, leaving no recourse for additional entry. The H-1B quota for 2006 was filled on the first day that it was open (April 1st) and no more visas were allocated for the remainder of the year. For 2008, the US Immigration Services Agency accepted H-1B visa petitions over five business days, ending on April 7th. Then in mid-April, the agency ran a computerized lottery to choose about 65,000 petitions. For the first time in 2008, the agency has explicitly prohibited companies from filing more than one petition for the same worker. 19 It has been reported that technology companies have become increasingly frustrated and vocal about the H-1B visa limits and the lottery selection method, stating that their companies have been forced to export jobs that could have been done in the US to countries more welcoming to skilled foreign workers. 20 Student visas have also dropped dramatically, by 20 percent from 2001 to 2002 and another 8 percent in 2003. This is cited as an obstacle to the US maintaining its comparative advantage in the area of international education, where no visa caps have been in place for foreign students. Martin and Lowell (2008) write that over 60 percent of the foreign students in the US come from Asia and 12 percent from Latin America. Despite these above constraints, Martin and Lowell (2008) state that there has been a significant increase in the number of working visas issued over the past decade by the U.S, with the total number of temporary working visas more than doubling from 1997 to 2006 (212,000 to 454,000). Asia accounts for the single largest legal source of temporary workers. Sas (2008) writes that in general, the Canadian system is favourable towards labour migration, both temporary and permanent. This is recognized officially in Section 3 of the Immigration and Refugee Protection Act (IRPA), where the objectives of this Act with respect to Immigration are stated: 1

1

To facilitate the entry of visitors, students and temporary workers for purposes such as trade, commerce, tourism, international understanding and cultural, educational and scientific activities.

This framework definition is applicable to the entire immigration statute. The Act sets out the types of visas categories, as listed below. The Canadian immigration law has no separate category for temporary entrants and thus presumes that persons are coming into the country to live permanently, unless 19

20

From an article in the International Herald Tribune entitled ‘US visa application period opens for skilled workers’ dated April 1, 2008. Ibid., and testimony of Bill Gates, President and CEO of Microsoft, before the US Congress, March 2008.

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proven to the contrary. Temporary migrants must therefore rebut that they are coming to Canada for a permanent purpose. This can be onerous for persons coming from weaker economies. Because of this presumption and test, many applicants for temporary visas are rejected. Visa categories for Canada include the following: Business Visitors Work Permits Intra-Company Transferees IT Workers Program Low-skilled Worker Program Off Campus Work Permits (for students) Post Graduate Permits Provincial Nominee Programs Agricultural Worker Program The categories of Business Visitors and intra-Company Transferees are categories derived from Canada’s free trade agreements. The former can work in Canada without obtaining a work permit. However, for those foreign nationals needing a work permit, their employers must first obtain a ‘Labour Market Opinion’, although this rather lengthy process does not guarantee that a work permit/visa will subsequently be granted. Sas (2008) writes that these requests are routinely refused by visa officers. Additionally, these opinions often take several months, 6 to 7 on average. Given the chronic shortage of workers in Canada, a fast track list of occupations was created in 2007 and expanded in early 2008 to allow an electronically expedited LMO process in British Colombia and Alberta so that opinions can be issued within 10 business days for a total of 33 occupations. The Low-skilled Worker Program was created in Canada to address the chronic labour shortages in the economy in this area. It allows for employers to bring foreigners with only basic education to Canada to fulfil low-skilled jobs. The time allotted for their stay is up to 24 months, after which they must leave for at least four months before employers can request their return.

Migration Policies of Sending Countries Faced with the large numbers of increasing outward migrants and concerned about their treatment in the United States, especially that of undocumented workers, the Mexican Government has taken several actions in recent years. A Program for Mexican Communities Living Abroad was created by the Ministry of Foreign Relations in 1990. An Office within the Executive Branch was created for Mexicans Abroad in 2000, as well as the Mexican Foreign Institute in 2002. The number of Mexican consular offices was increased in the United States. The government supported an initiative to channel remittances to productive investments within local communities and approved a law in 1996 destined to protect the rights of migrants, which also granted Mexicans living abroad the right to vote in Mexican elections. A General Law on Population and Migratory Policy also exists in Mexico but is said to be in need of revision. The

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goal of the previous and current Mexican administrations is to develop a comprehensive bilateral agreement on the issue of migration with the United States, but this has so far proved elusive. Given the importance of outward migration to Colombia, the government has also been very active. It recently put in place an innovative program entitled ‘Temporary and Circular Labour Migration Program’ (Migracion Laboral Temporal y Circular), which represents an effort to control outward labour migration from Colombia. The program is unique in that it is regulated and approved by both the origin and the destination countries, enabling migrants to stay legitimately abroad for specified periods of time. The program covers jobs that are temporary in nature, from 6 to 9 months, with the possibility of extension for up to two years. After having worked successfully abroad and returned legally to Colombia, workers may be brought back to the destination country once again for employment, thus the circular nature of the program. The Colombian government has also subscribed to bilateral agreements with Chile and Spain for pension portability. The Colombian Government also established a program in 2003 entitled ‘Colombia Nos Une’ or ‘Colombia Join Us’- Programme with the aim of promoting links between Colombians living outside the country and their families and their home regions. The government would like to link this diaspora to the Colombian State and through the program demonstrate its commitment to caring for and protecting its citizens outside its Given the importance of migration and the recognition of borders. 21 Colombians abroad as a vital part of the nation, the Ministry of Foreign Affairs has set as one of its major goals for 2010, the design of a Comprehensive Immigration Policy involving all governmental and non-governmental actors that affect the migration process. Peru has attached great importance to the formulation of a national policy on migration, and is the first country in the Americas to have passed laws that encourage the return of its citizens from abroad. This has been in response to the growing presence of the Peruvians abroad, which has incited the Peruvian government to become more active to respond to the multiple demands of its emigrants. One example of this is the law passed in 2004, entitled the ‘Law of Migratory Incentives’ (Law Nº 28182), the focus of which is to promote the return of Peruvians that have been abroad for more than five years through providing incentives of a fiscal and professional nature. Another example is the recent program entitled ‘Mi Vivienda’, put in place in 2008, which encourages Peruvian emigrants to buy their own houses in Peru through their remittances, with a view to returning to the country at some point. It is directed at those Peruvian emigrants who have already acquired work experience aboard, to return to Peru with their families and apply their professional and business skills 2

21

The ‘Colombia Nos Une’ program operates through nine working groups that seek to cover the various levels of migration and respond to the different needs of Colombians living abroad. These are: population trends; social protection; transnational economy; political participation; transnational networks; consular affairs; culture; education; and philanthropic projects.

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at home, through providing them a channel to use their remittances to construct and acquire a residence. 22 Peruvian emigrants can elect among ‘Mi Vivienda’ (My dwelling) credits, ‘Techo Propio’ (Own Ceiling) credits or ‘Mi Hogar’ (My Home) credits for this purpose. 23 While Chile has no formal law directed at Chilean migrants per se, it has nonetheless carried out actions relevant to immigrants within Chile and has taken action as well to promote the mobility of Chilean workers abroad. Regularization programs were launched for illegal migrants in the country in 2007-2008, that regularized some 50,000 foreigners. A legal restriction on hiring exists so that no more than a maximum of 15 percent of every firm (with more than 25 employees) can be foreigners. The Government of Chile has four types of visas that it grants to give temporary legal status to foreigners, including: i) employment-based visa (valid for up to two years but may be extended); ii) student visa (valid for one year but may be renewed); iii) temporary resident visa (valid for one year but may be extended once); iv) visas for political asylum and refugees (valid for two years but may be extended). Chile’s migration laws are open, and there is no specific visa for visitors with business purposes. Chile grants a resident visa to individuals under this category, which has a duration of one year and allows for obtaining a national identification card, which is very useful for business purposes (to open a bank account for example), and it is not associated to a particular employer. The visa that the counterpart gives depends on their own visa structure. The government of Chile has been pro-active in taking the initiative to sign no fewer than 22 bilateral agreements on social security with countries of America, Europe and Oceania in the area of pension portability. 24 These agreements allow for pension exports whereby the pension of a second country can be applied for, and paid in, the country of residence. They also allow for complementation of contribution periods. Period complementation establishes that should the pension benefit require a minimum period of contribution, 2

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Incentives of tax character have been included in this program in order to incite the return of Peruvians living abroad. These consist of the exemption from tax payment on imported personal items up to a value of $30,000 US and on imported professional and capital goods up to a value of $100,000 US. In Peru, the Department of Migratory Politics of the Department of Foreign Affairs is responsible for coordinating actions and proposals on migration matters permanently with the General Direction of Migrations and Naturalization (DIGEMIN) of the Interior Ministry. Relevant laws in this regard are the: Immigration Law (Decree N° 703 of May 1991) and the Nationality Law (26574 of January 1996). The price of the dwellings within these programs varies between $4,500 US and $57,500 US These agreements have been signed with Argentina, Australia, Austria, Belgium, Brazil, Canada, Czech Republic Denmark, Finland, France, Germany, Luxemburg, Netherlands, Norway, Peru, Portugal, Québec, Spain, Sweden, Switzerland, United States of America and Uruguay.

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contributions done in other countries can be counted. These agreements do not, however, allow full pension portability. 25 The Social Security Agreement signed between Chile and Peru in February 2004 is a pioneering agreement in this regard, as it does allow for full pension portability between private systems. It is the only one establishing this benefit. Article 18 of this Agreement establishes that ‘For the benefits given by the Individual Capitalization System of Chile and the Private Pension System of Peru, it is recognized the entitlement of workers to transfer their accumulated balance in their individual capitalization system from one contracting party to another, with the objective of being administrated by the Private Fund Administration they choose’. Thus, contributors to individual pension systems in Peru and Chile can transfer their savings from one country to another to be managed by the pension fund administrator of their country of residency, should they satisfy requirements. 26 Finally, in November 2007, presidents of 33 Ibero-American countries signed an agreement known as the as the ‘Ibero-American Multilateral Agreement on Social Security’ at the XVII Ibero-American Presidents Meeting. The Agreement establishes the right to receive old age and disability in the country of residency and the right to transfer these pension contributions to pension systems of different countries. The administrative agreement that will make this multilateral agreement effective has not yet been approved. 2

2

Figure 5.9. Summary of Government Policies Towards Migration in the Americas Country Canada United States Mexico Colombia Peru Chile

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Active stance on immigration 9

Cautious stance on immigration

Active stance on outward migration

No policy on migration

9 9 9 9 9

It is worth pointing out that complementation of contribution periods does not imply adding up contributions made in both countries to compute the pension level, but only guarantees the consideration of all periods of contributions for any requirement established to grant a pension. Each country will only pay pensions according to the contributions provided by the worker (prorated). For example, the Chilean pension system establishes a requirement of 20 years of contribution for a guaranteed minimum pension. A Chilean contributor with at least 5 years of contributions in Chile can use the years of contributions made in another country to add up to these 20 years; however the pension level is not affected by contributions made abroad. Some requirements are: the person has to show permanent residency in the country of destination and he/she must have contributed to a pension account for at least five years in the country where he/she wants to withdraw the funds.

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In summary, the policies of the six PECC members in the Pacific Americas towards migration might be described as in Figure 5.9: an active policy to encourage inward migration by Canada, a cautious stance on inward migration by the United States, a pro-active stance with respect to concern for issues relating to migrants abroad by Mexico, Colombia, and Peru, and a mixed picture for Chile where the government has promoted policies to facilitate labour mobility but where migration has not been a major policy concern.

Scope of Policy Cooperation on Labour Migration Among APEC Governments APEC Facilitation Within APEC, the APEC Business Travel Card (ABTC) has been made available to facilitate the movement of business persons throughout the AsiaPacific region for the participating economies. The ABTC allows businessmen to travel within these countries without visa and to use fast-track special lanes in the main airports. In the Americas, two of the five APEC members have signed onto this program, namely Chile and Peru. Since 2004, some 330 Chileans have ABTC cards. A more recent APEC initiative has been the development of an ‘APEC Model Measure’ for the ‘Temporary Entry for Business Persons’, the purpose of which is to provide non-binding guidance in the context of a bilateral or regional free trade agreement for the movement of foreign workers, especially: • Measures to facilitate and enhance temporary entry for business persons (not intended to address permanent immigration-related matters) • Understanding of common categories of business persons, namely business visitors; intra-company transferees (executives, managers, specialists); professionals; and other categories (traders and investors). The latest text for this Model Measure was discussed at the APEC Group on Services meeting in February 2008. Like the provisions in free trade agreements, this Model Measure only covers the categories of skilled labour and does not extend to semi-skilled or unskilled temporary workers.

Provisions in Free Trade Agreements The countries of the Americas are those that first entered into the pursuit of regionalism in a major way in the mid-1990s. In this region one of the two major templates now being used to negotiate FTAs was developed (the NAFTA model). A large number of free trade agreements have been concluded by PECC members in the Americas, both within the hemisphere and with other APEC members in the Asia-Pacific region. Many of these FTA have provisions whose purpose is to facilitate procedures for the temporary movement of skilled professionals and business persons. Some agreements also have been accompanied by guaranteed numerical annual quotas for certain categories of skilled labour, usually set out in a side letter.

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i) NAFTA The North American Free Trade Agreement (NAFTA) was the pioneer FTA in this regard (coming into effect in January 1994 for its members, namely Canada, the United States and Mexico). It contains a chapter entitled ‘Temporary Movement of Business Persons’ whose purpose is to facilitate temporary entry for business persons who are involved in the trade of goods or services or in investment activities between the three countries. Five categories of business persons are defined under NAFTA: traders; investors; business visitors; intracompany transferees; and professionals. For the latter, a qualifying list of professions is set out in an Appendix to the agreement, and the applicant must prove the necessary qualification requirements. In the case of business visitors a work permit is not required. As related by Martin and Lowell (2008), the only migration component of NAFTA is the ‘Trade NAFTA’ or the TN visa. This TN visa was uncapped in 1994 for Canadians and has been uncapped for Mexicans since 2004. Upon demonstrating proof of a job offer, the visa permits employment for one year with unlimited renewal. The NAFTA has been taken as a model and as an alternative to the WTO GATS approach for services liberalization for the subsequent negotiations of many subsequent free trade agreements. ii) FTAs negotiated by the United States Besides the NAFTA, the United States has negotiated six bilateral free trade agreements (FTAs) with APEC and PECC members, namely with Chile, Colombia, Peru, Singapore, Australia and Korea, four of which are in effect, the Colombian and the Korean FTA awaiting ratification by the US Congress. 27 Under the FTAs with Chile and Singapore, the path to an H-1B1 visa was created, providing for an initial stay of 18 months but with unlimited extensions. In addition, an annual quota of 1,800 visas for professionals from Chile was granted and 5,400 annual visas for professional from Singapore. These are in addition to the fixed total of H-1B visas. This new visa category under the FTAs is meant for temporary migrants, for stays of up to 18 months initially, but with the possibility of unlimited extensions. In the case of the FTA with Australia, a new E-3 visa was created specifically for Australian professionals, subject to an annual 10,500 quota. After the initial two year stay, this may also be renewed on an unlimited basis. In summary, the provisions governing labour movement in the US trade agreements are the following: • NAFTA: TN Visa; uncapped for both Canadians and Mexicans • Chile FTA: H-1B1 visa; capped at 1.800 professionals • Singapore FTA: H-1B1 visa; capped at 5,400 professionals • Australia FTA: E-3 visa; capped at 10,500 professionals 2

27

The US administration has also finalized negotiations on an FTA with Panama, which likewise is awaiting ratification by the US Congress at the time of writing of this study. It is unclear when a vote will be held on these three outstanding FTAs. Agreements between the US and Malaysia on the one hand, and Thailand on the other, are also in the process of negotiation but are not close to completion.

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Given the express opposition of the US Congress in reaction to these various arrangements where it was felt that trade agreements had stepped into the realm of immigration matters, no free trade agreement negotiated by the United States since 2002 has contained a chapter to facilitate the temporary movement of skilled workers (other than that with Australia where the chapter was added on subsequently). Thus temporary movement is not covered in the FTAs with Peru, Colombia or Korea. iii) FTAs negotiated by Canada Canada is a party to FTAs that are in force with the United States and Mexico (through NAFTA, as described above), as well as to FTAs with Chile, Israel, and Costa Rica. More recently, Canada concluded an FTA with Peru in January 2008 that is not yet in force (see above discussion). The Canadian government presently has a very full slate of ongoing discussions for additional FTAs, including one that is close to finalization with the four Central American countries of Honduras, Nicaragua, El Salvador, and Guatemala, as well FTAs under negotiation with Colombia, Korea, Singapore, Jordan, the Andean Community, Korea, CARICOM (the Caribbean Community) and the Dominican Republic. Services are a part of the NAFTA and of the FTAs that Canada has finalized with Chile and Peru, but they were not included in Canada’s FTAs with Costa Rica or with Israel. With respect to mode 4, or the temporary movement of business persons, the occupations covered under the chapters on temporary entry are only of the skilled professional, business, scientific, or academic nature. 28 2

iv) FTAs negotiated by Mexico Following its experience with NAFTA, Mexico has been a path-breaker in negotiating many FTAs with other countries in the Americas. It has also taken the NAFTA model outside the Western Hemisphere to negotiate similar FTAs with countries in Europe and in Asia. Mexico now has a network of free trade agreements with: Canada and the United States (under NAFTA) and with Chile, Bolivia, Colombia, Uruguay, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua in the Americas; with the European Union and the countries of the European Free Trade Association in Europe; and with Japan in Asia, as well as with Israel. All of these agreements include trade in services with the exception of the latter. Mexico also has complementation agreements (free trade agreements for goods only, sometimes focused on specific sectors) with Argentina, Brazil, Ecuador, Peru, Paraguay and Panama.

28

It is interesting to note that of the occupations that most sought after in Canada, the majority are those of low-skilled labourers and trades-people. The author of the Canadian study therefore writes that the conclusion of further bilateral trade agreements predicated only upon the temporary movement of skilled labour will not assist greatly in addressing Canada’s unskilled labour shortage.

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v) FTAs negotiated by Chile Together with Mexico, Chile has been the other major actor in the region to negotiate a large number of free trade agreements with countries in the Americas, in Europe and in the Asia-Pacific. Chile now has a network of free trade agreements with all of its major trading partners, including: the United States, Canada, Mexico, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, Mercosur members (Argentina, Brazil, Paraguay and Uruguay) and Panama in the Americas; with the European Union and the countries of the European Free Trade Association in Europe; and with Japan, China, Korea, New Zealand, Singapore and Brunei Darussalam in Asia. All of these FTAs cover both goods and services, although the liberalization commitments in services for the Mercosur FTA have yet to be negotiated. It also has complementation agreements (free trade agreements for goods only, sometimes focused on specific sectors) with Argentina, Bolivia, Colombia, Ecuador, Peru and Venezuela. The topic of migration has been included in a few special agreements negotiated by Chile. There is a Labour Cooperation Agreement with Canada, parallel to the FTA, and a Memorandum for Labour Understanding and Migration with Peru (which has yet to be signed), parallel to the FTA with Peru. Similar to NAFTA, most of the FTAs Chile has negotiated contain provisions for the temporary entry of skilled individuals for business purposes. These are intended to facilitate the entry of individuals that can boost free trade, but are not intended for individuals that have the intention of permanent migration. Chapters generally distinguish four types of individuals that can benefit from this special treatment. These are business visitors, investors, intercompany personal transfer and professionals. Such chapters are included in the large majority of FTAs that Chile has negotiated. vi) FTAs negotiated by Peru Peru has recently moved to a more active stance towards the negotiation of free trade agreements with countries in the Americas, in Europe and in the AsiaPacific. Peru has finalized recent free trade agreements with the United States (in effect since January 2008) and with Canada (signed in January 2008 and now undergoing a legal review). An FTA with Thailand was signed in September 2005 but is not yet in effect and covers goods only, not services). An FTA with Chile was signed in August 2006 but is not yet in force. Several agreements are in the process of discussion by the Peruvian government. Negotiations have been ongoing since April 2006 to conclude an FTA between Peru and Colombia and the EFTA nations (European Free Trade Association, composed of Switzerland, Iceland, Liechtenstein and Norway) and with Singapore as well to conclude an FTA. Peru has been negotiating as a member of the CAN or Andean Community Negotiations since May 2004 for the conclusion of an Association Agreement with the European Union. Services are a component of most of the free trade agreements that Peru is negotiating, although the issue of temporary mobility of (skilled) labour was excluded from

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the recent FTA with the United States, it was included in the recent agreements finalized with both Chile and Canada. In the Peru-Canada FTA, the categories of temporary entry for business people have been broadened to include certain types of technical workers. Additionally, Canada has agreed in this context not to apply economic needs tests to Peruvian exports of services.

vii) FTAs negotiated by Colombia Like Peru, Colombia is a member of the Andean Community (a customs union, not a free trade area also currently comprising the countries of Bolivia and Ecuador). 29 Colombia has recently negotiated two FTAs, one with the United States (signed in November 2006 and called the US-Colombia Trade Promotion Agreement) and one with Chile (also signed in November 2006), but neither of which has been ratified as of yet. 30 An FTA with Mexico has been in force since June 1994 and contains provisions on services, including a chapter on temporary entry of business persons similar to that of NAFTA. 31 A free trade agreement also exists between three of the Andean Community countries (Colombia, Ecuador and Venezuela) and Mercosur members (2004), but the services component is still a blank slate and has yet to be negotiated. 2

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Bilateral Labour Agreements It is interesting to note that bilateral labour agreements have recently become attractive alternatives for many governments for the purpose of achieving temporary labour mobility. Several countries appear to be demonstrating a preference for this option rather than undertaking permanent Mode 4 29

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Andean Community members have elaborated several decisions over the course of the past years to facilitate the movement of natural persons between their member states. Decision 503 recognizes the National Identification Documents of citizens throughout the Andean Community, while Decision 545 aims to establish rules that will allow progressively free movement and residence of nationals in the sub-region for both living and employment purposes. Decision 538 ensures that migrants, as well as their beneficiaries, are not discriminated against and receive equal treatment or national treatment within the sub-region. It also guarantees the right of migrant workers and their beneficiaries to receive social security benefits during their residence in another member country. It is not clear to what extent these various decisions have been fully implemented. The US Administration transmitted the US-Colombia Trade Promotion Agreement to Congress in April 2008 which normally should have started in motion a period of 90 days within which both the House of Representatives and the Senate would have to vote on the agreement (by end July 2008). However, the US House of Representatives voted to abrogate its legal responsibility under the Trade Promotion Authority Act of 2002 and suspend consideration of the FTA indefinitely. At the time of writing of this study it is unclear when this vote will take place. Of the two recent FTAs, the agreement with the United States contains no chapter on temporary entry, while the FTA with Chile does cover this issue.

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concessions in the WTO or in bilateral or regional free trade agreements. Temporary Foreign Worker Programs have been set up in recent years in some OECD countries (Canada, Australia, etc), that seem to be emerging as alternatives to Mode 4 commitments in trade agreements. Such temporary programs are attractive because they are flexible, short-term rather than permanently bound and designed to respond to labour shortages in the domestic economy in a timely manner. In principle these agreements are available to any country which can supply the workers that are in short supply in the country that has a Temporary Foreign Worker Program, but in practice the terms of each agreement are negotiated bilaterally with a specific source or labour-sending country. Importantly, in such programs it is the Labour departments or ministries that retain the initiative and the control for their implementation and not the ministries of trade or foreign affairs. The skills categories covered can vary significantly from agreement to agreement, since they are designed specifically for individual labour market needs. 32 A few specifically targeted bilateral labour agreements have recently been concluded among PECC members in the Pacific Americas as alternatives to FTAs and as more flexible instruments to target and regulate the flow of unskilled or semi-skilled workers. Morales (2008) writes that a bilateral agreement between Mexico and the United States was put into place as early as 1942 to govern temporary migrant workers. The agreement was renewed annually for 22 years until 1964. During this period approximately 4.5 million seasonal contracts and individual temporary work permits were authorized. The agreement was administered by the Ministry of Foreign Affairs and the Ministry of Labour for Mexico, and in the United States by the Department of Labour, the Immigration Agency, and the Department of Agriculture, which together determined how many seasonal workers were needed and how long they could stay in the country. The program targeted seasonal, temporary agricultural workers. It was abrogated unilaterally in 1964 by the United States, after which Moreales (2008) writes that undocumented immigration began to increase substantially. The Mexican government, together with that of Canada, established a bilateral Program for Temporary Agricultural Mexican workers in June 1974 through a memorandum of understanding. In this agreement the two governments set out the rights and responsibilities of both workers and their employers. The program is authorized by the federal government through the Canadian Department of Human Resource Development. In Mexico, the program is jointly administered by the Ministry of Labour and Social Welfare which recruits and selects the workers that participate in the program, the Ministry of Foreign Affairs that provides the passports, and the national migration Institute which provides the migratory papers, and lastly the Ministry 3

32

The spread of Temporary Foreign Worker Programs was pointed out to me by Ramesh Chaitoo, Chief Services Negotiator for CARICOM countries at the Regional Negotiating Machinery. For more details on the Canadian program the following website can be consulted: www.servicecanada.gc.ca/en/features/ tfwp.shtml. U

H

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of Health which coordinates and carries out medical examinations for the temporary workers. The program currently operates in nine provinces of Canada. Between the years 1996-2002 the number of temporary workers in this program more than doubled from 5,211 to 10,681, the majority of which are young men from rural regions in Mexico with only a few years of education. Due to its success, the Canadian government is planning to extend this type of bilateral arrangement to other sectors besides agriculture such as the construction, hotel, and tourism industries. Two bilateral agreements that have been undertaken successfully by Colombia, as described by Cardenas (2008): one with Spain as of 2001 to send agricultural workers to work temporarily for fruit harvesting in the Cataluna region; and another with Canadian companies in Alberta and Manitoba for Colombian workers in the food packing industry. These agreements regulate labour migration in a safe, dignified and orderly fashion, and in conditions of legal certainty, to the benefit of both parties. Agreements have been signed by the Colombian government as well with Chile (2003) and with Uruguay (2003) covering Social Security Insurance and rights of workers in this regard. The Peruvian government has signed Memorandums of Understanding on Migratory and Labour Cooperation with three countries in Latin America, namely with Mexico (2002), with Ecuador (2006), and with Chile (2006), which aim to promote the exchange of information and the protection of the rights of migrant workers, in particular under the U.N. International Convention on the Protection of the Rights of Migrant Workers and their Relatives. 33 An Agreement on Social Security between Peru and Chile was also signed in 2002, permitting workers to accumulate their pensions under the legislation of both countries. 3

Key Issues and Concerns on Labour Migration in the Americas Concerns surrounding labour migration in the Americas vary depending upon the situation of the country and the absolute quantity, composition and destination of migration flows. For Mexico, Colombia and Peru, migration is seen as a complex issue with multiple causes, which has acquired a different socio-demographic profile in the 21st century, as their countries have moved from societies of immigrants to societies of emigrants. Today both men and women are participants in migration, and a greater number of both women and better educated migrants are leaving the countries. As migration has become such an important social and economic phenomenon, several authors argue that

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The objectives of the Memorandums of Cooperation are to promote the development of migratory labor politics. However, the agreement with Ecuador goes beyond this to normalize the situation of migrant workers of both countries in the border region, particularly those in agriculture, construction and domestic service. The agreement covers the border Departments of Lambayeque, Amazonas and Loreto in Peru, and the Provinces of Azuay and Canar in Ecuador.

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it must be recognized as a phenomenon that requires a multi-dimensional, integrated approach on both sides. In the case of Mexico, the lack of a comprehensive migration policy with the United States is seen as a major limitation given that a bi-national market exists ‘de facto’ between the two countries. Although Mexico has suggested the possibility of an amnesty for the more than four million undocumented Mexican workers in the United States, combined with the development of a program for temporary workers, the desirability of such an approach has not yet been agreed by the US administration, and therefore negotiations have not begun. The hardening of immigration policy in the US after 2001 is seen as having negatively affected the quality of life for migrants as well as the ability to conclude a bilateral, cooperative policy on migration (Mexico). The lack of a coherent and forward-looking government policy towards migration is seen as a drawback in the case of Chile. Although the government has taken steps to promote the temporary mobility of skilled workers and the portability of pensions, it has not taken up the issue of migration in its broad perspective. In the case of Peru and Colombia, there is concern about the impact of a long-term outward migration of the ‘best and the brightest’, or how to attract the professional categories of workers who have been educated and/or gained valuable work experience abroad and do not have plans to return (Peru, Colombia). In the receiving countries, the fact that temporary labour movement is not treated differently from that of permanent migration, making the visa procedures longer and more difficult, is viewed as a drawback in the case of Canada. The slowness of processing of visa applications is perceived as having a negative impact on temporary labour flows and not contributing to solving the chronic labour shortage. In the United States, the presence of foreign workers has become highly politicized, where concerns over job losses and adjustment costs are running high. This political fear justified or not, has made the negotiation of trade agreements in any form extremely difficult. Several authors indicate that it would be useful for governments to discuss and put in place forms of regional cooperation in the area of migration. All authors indicate that this is a high priority area for policy-making at the national level.

Recommendations for Improving Policies Relating to Migration by PECC Countries of the Pacific Americas and Scope for Cooperation Several authors of the PECC studies for the countries of the Pacific Americas mentioned areas where they felt that useful steps could be taken in a coordinated fashion by APEC member economies to develop a more coherent and effective policy on migration. These include the following: • Establishment of Training Programs for Migrant Workers A training component to the temporary stay of migrant workers would be a useful policy measure that could be jointly designed by both sending and

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recipient countries in APEC. For example, workers could receive instruction part time and gain hotel or hospitality management skills or skills in construction concurrently with their employment. They could earn a certificate for a higher level of skills, ultimately providing the opportunity for better employment in either the recipient country, or later, in their home country. Such training programs could also include orientation and placement, as well as the opportunity for language learning and or computer skills.

•

•

•

•

•

Work Towards Developing Agreements on Pension Portability Some countries in the Americas have signed agreements that begin to address the important issue of pension portability, although currently such agreements are limited to pension exports and complementation of contribution periods. This is, however, a critical area where ABAC, together with APEC member economies, could work together to discuss and design such agreements, with the long-term aim of allowing for full pension portability for workers in the region. Elimination of Quantitative Ceilings on the Hiring of Foreign Workers This was recommended particularly for countries with demonstrated worker shortages but also as a matter of good economic policy. Quantitative ceilings on the hiring of foreign workers distort the job market and place domestic firms at a disadvantage in front of the inability to source their needed inputs competitively. Compilation and Exchange of Better and More Complete Information on Migrants and Migration Flows Obtaining more complete information on migration, remittances and the statistical profile of migrants through carrying out joint studies would be useful in order to advance knowledge of international migration especially among countries of the Asia-Pacific. Special surveys, possibly sponsored or conducted by APEC, could be carried out to compile data on migrants and shared among member economies. Development of a Model Design for Bilateral Agreements to Foster the Temporary Movement of Lower-skilled Workers Some APEC economies have been negotiating bilateral agreements for the temporary exchange of lower-skilled workers, independently of FTAs. It would be helpful for APEC economies to examine these agreements and design a ‘Model Bilateral Agreement’, similar to the ‘Model Measure on Temporary Entry for Business Persons’ for the temporary movement of skilled professionals and business persons within FTAs that is being elaborated by the APEC Group on Services and the CTI. Exchange of ‘Best Practices’ Among APEC Economies for the Implementation of Bilateral Temporary Worker Programs Given the increasing movement of lower-skilled migrants and the lack of attention to these flows in international trade agreements, as well as the need to ensure the protection of migrant workers and the mutual benefits to be

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reaped from such movements for both labour sending and receiving countries, APEC economies could exchange ‘best practices’ for the implementation of bilateral Temporary Worker Programs’.

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Appendix I: PECC Case Study Team on International Labour Mobility

Appendix I: PECC Case Study Team on International Labour Mobility Authors by Economy Northeast Asia Japan – Prof. Yasushi Iguchi, Kwansei Gakuin University Republic of Korea – Drs. Jai-Joon Hur and Kyuyong Lee, Korea Labour Institute China – Mr. Liu Yan Bin, Institute for International Labour Studies Hong Kong, China – Prof. Wong Siu-lun, University of Hong Kong Chinese Taipei – Dr. Ke-Jeng Lan, National Chung Cheng University Mongolia – Dr. Bolormaa Tsogtsaikhan, National University of Mongolia Southeast Asia Thailand – Dr. Yongyuth Chalamwong, Thailand Development Research Institute Viet Nam – Mr. Phung Quang Huy, Vietnam Chamber of Commerce and Industry Malaysia – Ms.Vijayakumari Kanapathy, Institute of Strategic and International Studies Singapore – Profs. Chew Soon Beng and Rosalind Chew, Nanyang Technologial University Indonesia – Drs. Aris Ananta and Evi Nurvidya Arifin, Senior Research Fellow, Institute of Southeast Asian Studies The Philippines – Prof. Tereso S. Tullao, Jr., De La Salle University-Manila Australasia Australia – Prof. Graeme Hugo, University of Adelaide

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New Zealand – Dr. Paul Callister, Victoria University of Wellington and Ms. Juthika Badkar, Department of Labour Pacific Americas Chile – Dr. Claudia Martinez A., University of Chile Peru – Dr. Anibal Sánchez, National Institute of Statistics and Informatics Colombia – Mrs. Jaifa Mezher El Kareh and Néstor A. Ordúz Cárdenas, Ministry of Foreign Affairs Mexico – Dr. Ofelia Woo Morales, University of Guadalajara United States – Drs. Susan Martin and B. Lindsay Lowell, Georgetown University Canada – Ms. Catherine Sas, Q.C., Immigration Law Office Speakers from International Organizations International Labour Organization (ILO) – Mr. Manolo Abella, Chief Technical Adviser, Bangkok Dr. Piyasiri Wickramasekara, Senior Migration Specialist, Geneva International Organization for Migration (IOM) – Mr. Federico Soda, Regional Programme Development Officer, Bangkok Speakers from Business Organizations ABAC – Ms. Doris Magsaysay-Ho, President and CEO of the Magsaysay Group of Companies, the Philippines Microsoft – Ms. Lori Forman, Regional Director, Singapore

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Appendix II: PECC-ABAC Joint Task Force on International Labour Mobility

Appendix II: PECC-ABAC Joint Task Force on International Labour Mobility Co-Chairs • Dr. Soogil Young, Chair, Korea National Committee for Pacific Economic Cooperation • Ms. Doris Magsaysay-Ho, Member, ABAC Philippines; President and CEO of the Magsaysay Group of Companies, the Philippines PECC Prof. Graeme Hugo, Overall Synthesis Author; University Professorial Research Fellow, Professor of Geography and Director of the National Centre for Social Applications of GIS, University of Adelaide, Australia • Dr. Chia Siow Yue, Synthesis Author for Southeast Asia; Senior Research Fellow, Singapore Institute of International Affairs • Dr. Sherry M. Stephenson, Synthesis Author for Pacific Americas; Advisor, Economic Policy Issues, and Chief, Institutional Relations, Organization for American Studies • Dr. Jai-Joon Hur, Synthesis Author for Northeast Asia; Senior Fellow, Korea Labour Institute • Mr. Eduardo Pedrosa, Secretary General, PECC International Secretariat • Ms. Shinhye Hwang, Assistant Director for Research Affairs, Korea National Committee for Pacific Economic Cooperation •

ABAC Mr. Hernan Somerville, Member, ABAC Chile • Mr. Wayne Golding, Member, ABAC Papua New Guinea • Mr. Stephen Ong, Member, ABAC Brunei Darussalam • Mr. John Denton, Member, ABAC Australia • Mr. Brian Lynch, Alternate Member, ABAC New Zealand • Mr. Juan Pablo Garcia Garza, Alternate Member, ABAC Mexico • Ms. Monica Whaley, Executive Director, ABAC USA Secretariat • Mr. Alex Parle, Staffer, ABAC USA • Ms. Josephine Uranza, Staffer, ABAC Philippines • Mr. Henry Lau, Staffer, ABAC Hong Kong, China • Mr. Antonio I. Basilio, Executive Director, ABAC International Secretariat •

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About the Contributors

About the Contributors Juthika Badkar is a Senior Analyst with the Labour Market Dynamics group at the New Zealand Department of Labour. In late 2008 until the end of March 2009 Juthika is on a part-time secondment as a Visiting Research Fellow at the Institute of Policy Studies, Victoria University, Wellington. Juthika has worked in a range of areas of immigration research for the past four years. Prior to this she has worked in public health surveillance and research. Juthika has a Master of Public Health from the University of Otago. Paul Callister has over the last two decades undertaken research for a wide range of public and private sector organisations. Currently Paul is a Senior Research Fellow at the Institute of Policy Studies, Victoria University, Wellington. Paul’s recent research has focused on labour market and demographic issues relating to both the individual and the household. This has included a focus on the polarisation of work across households; ageing and labour market change, fertility and ‘family-friendly’ policies; gendered migration; gender and education; the transmission of ethnicity within households; as well as the links between changes in the labour market and changes in the form and function of households. Chia Siow Yue is currently Senior Research Fellow at the Singapore Institute of International Affairs (SIIA). She was formerly Director and CEO of the Institute of Southeast Asian Studies (ISEAS) and retired from that position in October 2002. She was concurrently Director (1998-2002) of the Singapore APEC Study Centre and founding Regional Coordinator (1998-2004) of the East Asian Development Network (EADN) a regional research network funded by the World Bank. Prior to her ISEAS appointment, Dr. Chia was professor of Economics at the National University of Singapore for over 25 years. Dr. Chia obtained her BA Honours in Singapore at the University of Malaya, and her Ph D in Economics from McGill University. She specialises on the economies of East Asia and has written and published extensively on international trade and investment, international labour mobility, income distribution, and ASEAN and East Asian regional economic integration. She has consulted for numerous international and regional agencies such as the World Bank, ILO, UNCTAD, UNIDO, WTO, UN-ESCAP, Asian Development Bank, and ASEAN Secretariat. Doris Magsaysay Ho is President and CEO of the Magsaysay Group of Companies which has interests in shipping, human resources and business process outsourcing services. She is a member of the APEC Business Advisory Council and sits as Co-Chair of the Facilitation Working Group. Graeme Hugo is University Professorial Research Fellow, Professor of the Department of Geographical and Environmental Studies and Director of the National Centre for Social Applications of Geographic Information Systems at the University of Adelaide. His research interests are in population issues in Australia and South East Asia, especially migration. His books include Australia’s Changing Population (Oxford University Press), The Demographic Dimension in Indonesian Development (with T. H. Hull, V. J. Hull and G. W.

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About the Contributors

Jones, Oxford University Press), International Migration Statistics: Guidelines for Improving Data Collection Systems (with A.S. Oberai, H. Zlotnik and R. Bilsborrow, International Labour Office), Worlds in Motion: Understanding International Migration at Century’s End (with D. S. Massey, J. Arango, A Kouaouci, A. Pellegrino and J. E. Taylor, Oxford University Press), several of the 1986, 1991 and 1996 census based Atlas of the Australian People Series (AGPS), Australian Immigration: A Survey of the Issues (with M. Wooden, R. Holton and J. Sloan, AGPS), New Forms of Urbanisation: Beyond the UrbanRural Dichotomy (with A. Champion, Ashgate) and Australian Census Analytic Program: Australia’s Most Recent Immigrants (Australian Bureau of Statistics). In 2002 he secured an ARC Federation Fellowship over five years for his research project, ‘The new paradigm of international migration to and from Australia: dimensions, causes and implications’. His current research has focused on migration and development, environment and migration and migration policy. Jai-Joon Hur is Director of Office for Labour Market Research in Korea Labour Institute. He has published many papers and books analysing the Korean labour market vis-a-vis changes in the international economic environment as well as technological change. His recent work includes examining migration issues in Korea. He has been advising policy decision makers on commitments regarding movement of people in bilateral and regional trade agreements. His work experience and activities include Senior Economist at the World Bank, ILO consultant, and Delegate of Korean government in the Korea-United States Free Trade Agreement Negotiations. Soogil Young, President of the National Strategy Institute in Seoul, Korea, has been serving as Chair of Korea National Committee for Pacific Economic Cooperation (KOPEC) since November 2006. Dr. Young served as a senior economist at four governmental economic research institutes during 1978-1998, including as a Senior Fellow for the Korean Development Institute (KDI), and as President of the Korea Institute for International Economic Policy (KIEP). He served as Korea’s Ambassador to the OECD in Paris during 1998-2001 where he concurrently served as Chairman of the Advisory Board on the Development Centre. Dr. Young has been active on many blue-ribbon committees for the Korean government on economic policy matters since the early 1980s, including three Presidential Commissions. He was the founding Coordinator of the PECC Trade Policy Forum during 1983-1986, and also of the PECC Finance Forum during 2001-2005. Dr. Young has written extensively on trade, development and international cooperation from Korea’s perspective. He obtained his Ph.D. in economics from the Johns Hopkins University in the United States. Sherry M. Stephenson is Head of Institutional Relations at the Organization of American States (OAS). She is an expert in the area of international trade policy and has worked more than 25 years in this area. For two years she was Director of the Department of Trade at the OAS and served as Deputy Director of the Trade Unit at the OAS for six years during the Free Trade Area of the Americas negotiations. She received a PhD. in International

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About the Contributors

Economics from the University of Geneva and an M.A. in Economics from New York University. She has served as an Advisor to the Ministry of Trade, Government of Indonesia, Jakarta, and has held positions with the GATT and UNCTAD Secretariats in Geneva as well as with the Trade Directorate of the OECD in Paris. She has been an active member of the Pacific Economic Cooperation Council (PECC) for many years and intensely involved in supporting the APEC process. Her publications address several issues of trade policy, particularly services, non-tariff barriers and regional economic integration. She has edited two volumes on services trade and reform and published more than fifty articles and papers in journals and books.

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References

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222

Index

Index 3D, 3, 17, 120, 125, 133, 135, 144 457, 23, 53, 174, 175, 176, 192, 193, 195, 265 accident protection, 64, 143 accreditation, 112, 115 adjustment, xxv, xxvi, xxvii, 32, 119, 136, 162, 167, 245 admission categories, 60, 229 adolescents, 4 age, 3, 4, 5, 7, 10, 27, 67, 86, 94, 100, 107, 122, 123, 166, 172, 180, 184, 213, 215, 217, 235 ageing, 37, 62, 85, 86, 94, 117, 122, 123, 165, 168, 207, 213, 253 Agency, 20, 105, 230, 243, 265 agents, 12, 30, 31, 63, 70, 107, 111, 154, 162 agricultural workers, 60, 230, 243, 244 agriculture, 42, 62, 107, 125, 129, 130, 145, 149, 171, 180, 206, 221, 244 amnesty, 145, 245 APEC Advanced Passenger Information (API), 69, 150 APEC Business Advisory Council (ABAC), i, ii, iii, v, xiii, xxi, xxvi, xxvii, xxviii, 73, 77, 159, 246, 250, 251, 252, 257, 259, 260, 264, 265, 266, 267, 269, 270, 271, 272 APEC Business Travel Card (ABTC), xxi, 69, 150, 236 Argentina, 221, 223, 225, 234, 240 ASEAN Framework Agreement on Services (AFAS), xxi, 68, 150 ASEAN+3, 109 Asia, i, ii, v, vii, xxv, xxvi, xxviii, 1, 2, 3, 5, 10, 11, 12, 14, 15, 20,

21, 23, 25, 27, 29, 30, 31, 32, 34, 35, 36, 37, 38, 40, 42, 43, 44, 48, 50, 54, 55, 56, 57, 59, 62, 67, 72, 73, 74, 76, 81, 88, 89, 90, 91, 94, 96, 98, 104, 105, 109, 112, 114, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 129, 132, 133, 139, 146, 147, 156, 159, 160, 165, 167, 169, 173, 178, 185, 188, 194, 198, 200, 203, 207, 223, 230, 231, 236, 237, 239, 240, 241, 247, 249, 251, 253, 254, 257, 258, 259, 260, 261, 262, 263, 264, 265, 266, 267, 269, 270, 271, 272 Asian Development Bank, 37, 253, 257 Asian financial crisis, 125, 135, 138, 147 Asia-Pacific Economic Cooperation (APEC), i, v, vii, ix, x, xii, xv, xvi, xxi, xxv, xxvi, xxvii, xxviii, 1, 3, 4, 5, 8, 18, 26, 28, 36, 40, 45, 48, 49, 52, 53, 54, 55, 59, 67, 69, 70, 72, 74, 76, 77, 79, 108, 110, 112, 115, 149, 150, 156, 157, 159, 168, 175, 236, 237, 246, 247, 253, 254, 255, 263, 268 assimilation, 162 Association of Southeast Asian Nations (ASEAN), xxi, 67, 68, 69, 109, 150, 151, 152, 155, 157, 159, 253, 263 asylum seekers, 50 Australasia, ii, vi, 165, 250 Australia, i, vi, 6, 7, 9, 11, 12, 13, 14, 18, 23, 26, 48, 53, 56, 59, 60, 75, 91, 117, 126, 129, 165,

223

Index

166, 167, 168, 169, 170, 171, 172, 175, 176, 177, 178, 180, 181, 182, 183, 184, 185, 186, 187, 188, 191, 192, 194, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 220, 234, 237, 238, 242, 250, 251, 254, 258, 259, 260, 261, 262, 263, 264, 265, 266, 267, 268, 270, 271 baby boom, 168, 171 balance of payments, 33, 40, 91, 92, 137, 138, 142 Bali Concord, 68, 151 best practice, 76 bilateral agreements, xxvii, 64, 71, 72, 77, 111, 115, 156, 214, 232, 234, 244, 247 bilateral cooperation, 108, 149, 154, 157 bilingual, 113 bonus points, 175 border control, 51, 57, 106 brain drain, 1, 36, 37, 46, 56, 103, 121, 131, 134, 139, 154, 155, 204, 207, 228, 257, 259, 260, 261, 262, 263, 264 brain exchange, 205 brain gain, 139, 147 Brazil, 196, 234, 240 bumiputra, 128 bureaucratic, 128, 163 business, i, vi, vii, ix, xvi, 1, 23, 69, 77, 79, 112, 173, 174, 188, 193, 231, 236, 237, 247, 250, 254, 257, 259, 260, 264, 265, 267, 270, 272 Business Immigration Programme, 173 Canada, i, vi, 6, 7, 8, 9, 11, 12, 13, 14, 18, 23, 26, 44, 48, 58, 59, 60, 69, 72, 75, 91, 117, 126, 175, 195, 197, 198, 205, 213, 214, 218, 219, 220, 224, 226, 229, 231, 232, 234, 235, 237,

238, 239, 240, 241, 242, 243, 245, 250, 262, 269 capacity building, 74 capital flows, 39, 216 care givers, 109, 152 category jumping, 178, 198 census, 2, 66, 166, 172, 204, 222, 254 certification, 68, 71, 151, 152, 153 childcare, 207 children, 4, 10, 54, 91, 100, 103, 112, 113, 114, 124, 133, 158, 168, 180, 203, 205, 217, 223 Chile, i, vii, 6, 7, 8, 9, 11, 18, 26, 48, 58, 64, 109, 213, 214, 215, 221, 223, 224, 225, 226, 228, 232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 244, 245, 250, 251, 267 China, i, vi, 2, 5, 6, 7, 8, 10, 11, 17, 18, 21, 26, 27, 28, 34, 36, 40, 42, 44, 47, 48, 58, 65, 83, 84, 85, 88, 89, 90, 92, 93, 94, 95, 96, 97, 99, 100, 103, 104, 105, 106, 107, 108, 110, 114, 121, 123, 124, 126, 129, 132, 133, 136, 139, 168, 172, 185, 186, 189, 190, 191, 194, 195, 196, 197, 203, 210, 211, 220, 227, 240, 249, 252, 259, 261, 264, 266, 269, 271, 273 Chinese Taipei, i, vi, 5, 6, 8, 11, 20, 21, 22, 34, 44, 45, 46, 49, 58, 61, 67, 71, 83, 84, 85, 86, 89, 90, 91, 92, 93, 95, 96, 97, 99, 102, 111, 114, 249, 265, 266 circular migration, xxv, xxvi, 51, 68, 76, 115, 125, 147, 151, 163 circulation, 15 citizenship, 106, 121, 124, 131, 142, 146, 147, 205, 221 civil society, 258 clandestine, 17, 30, 33, 167 climate change, 210 Closer Economic Partnership Arrangement [CEPA], xxi, 111

224

Index

Colombia, i, vii, xvii, 5, 11, 26, 27, 28, 58, 60, 63, 71, 72, 153, 213, 214, 215, 223, 224, 226, 227, 228, 229, 231, 232, 233, 235, 237, 238, 239, 240, 241, 242, 244, 245, 250, 267 communication, 27, 52, 82, 93 compensation, 146, 155, 161 competency standards, 158 compliance, 57, 60, 61, 162, 163, 208 conflict, 69 construction, 62, 72, 77, 94, 97, 107, 111, 120, 124, 125, 127, 129, 130, 133, 135, 136, 145, 149, 153, 207, 221, 244, 246 consultation, xxvii, 152, 180 contract labour, 38, 64 contractual service suppliers, 110 cooperation, v, 3, 46, 67, 68, 70, 73, 75, 84, 90, 93, 105, 107, 108, 109, 111, 112, 114, 115, 118, 143, 150, 151, 153, 154, 157, 159, 160, 161, 215, 245, 255 Costa Rica, 60, 238, 239, 240 costs of migration, 70, 76 crime, 31, 57, 117, 140 cross border, 61, 150 culture, 34, 50, 78, 82, 93, 107, 120, 157, 233 currency, 43, 91, 96, 101, 138 data, xxvi, 2, 5, 12, 17, 18, 36, 37, 40, 41, 48, 49, 69, 75, 124, 149, 157, 158, 159, 166, 168, 171, 186, 188, 201, 206, 214, 247 data collection, 3, 254 demand, 3, 17, 28, 29, 30, 49, 50, 53, 62, 73, 82, 91, 100, 101, 113, 117, 118, 120, 121, 124, 130, 131, 138, 157, 171, 175, 191, 207, 215, 225 democracy, 3, 26 demographic dividend, 9, 10, 11, 122

demographic transition, x, 83, 84, 122, 215 Department for International Development (DFID), xxi, 37, 260 dependency, xx, 10, 51, 122, 123, 130, 216 deportation, 61, 163, 230 designer migrants, 198 destination, i, xxv, xxvi, 10, 16, 17, 22, 29, 30, 31, 32, 33, 34, 35, 44, 49, 51, 52, 53, 54, 55, 56, 57, 61, 62, 63, 64, 66, 69, 70, 72, 73, 74, 75, 78, 79, 91, 93, 104, 113, 114, 121, 124, 132, 150, 158, 167, 203, 209, 210, 223, 232, 235, 244 development, ix, xii, xxv, 3, 17, 25, 26, 27, 29, 34, 35, 36, 37, 38, 40, 42, 43, 44, 45, 46, 47, 50, 51, 52, 62, 64, 65, 67, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 82, 90, 91, 93, 100, 103, 113, 115, 118, 119, 120, 131, 135, 136, 137, 139, 142, 143, 153, 154, 161, 162, 167, 169, 172, 176, 209, 210, 214, 224, 226, 227, 236, 243, 244, 245, 247, 249, 250, 253, 254, 255, 258, 260, 261, 262, 263, 264, 265, 266, 267, 268, 269, 270, 271, 272 development assistance, 79 development friendly, 78, 209 dialogue, 73, 75, 105, 154 diaspora, ix, xii, 34, 38, 44, 45, 49, 64, 65, 66, 78, 84, 93, 139, 142, 161, 201, 204, 205, 206, 207, 209, 232, 257, 259, 262, 264, 265, 266, 267 differentials, 3, 5, 27 diffusion, 45 discrimination, 1 disease, 57, 117 displaced persons, xxi, 169, 171, 185

225

Index

dispute negotiation, 111 diversity, 73, 113, 114, 115, 121, 136, 173, 208 doctors, 24, 37, 130, 131, 229 documented migration, 54 domestic workers, vi, 24, 25, 134, 207, 259 drivers of migration, 27 drug trade, 30 dual citizenship, 106 Dutch disease, 42, 137 earnings, xxv, 20, 33, 35, 37, 40, 52, 73, 81, 82, 83, 92, 95, 104, 106, 114, 137, 138, 142, 196, 225, 227 East Asia, 38, 117, 125 economic development, 46, 67, 73, 96, 99, 101, 118, 119 economic migration, 59, 171, 180 education, xv, 15, 260, 263 El Salvador, 26, 221, 239, 240 elderly, 10, 214, 215, 216, 217, 223 emigration, ix, xii, xvi, 1, 10, 12, 19, 20, 22, 25, 26, 36, 37, 40, 46, 48, 51, 55, 56, 63, 64, 75, 89, 106, 107, 129, 139, 142, 166, 167, 178, 201, 204, 207, 209, 221, 259 employers, 51, 60, 62, 63, 74, 97, 98, 105, 132, 136, 146, 148, 149, 153, 157, 160, 161, 163, 174, 175, 176, 177, 180, 193, 195, 196, 208, 230, 231, 232, 243 employment, x, xi, xxi, xxii, 20, 22, 62, 93, 97, 101, 102, 107, 110, 134, 136, 143, 146, 149, 176, 259, 269 Employment Act, 149 employment opportunities, 96, 104, 118, 128 Employment Pass (EP), 146 Employment Permit Scheme, 97 Employment Services Act, 102 engineers, 45, 46, 93, 95, 103, 130, 152, 229

enterprises, 100, 120, 138, 143, 147 entertainment workers, 25 environment, 10, 11, 32, 70, 117, 119, 142, 227, 254 equilibrium, 135 ethnic, 2, 44, 45, 50, 61, 89, 91, 93, 99, 148, 178 European Union, 239, 240, 241 exchange of information, 71, 75, 105, 153, 163, 244 exchange rate, 42, 121, 138, 155, 228 exclusion, 17, 50 executives, 69, 89, 102, 117, 120, 121, 125, 131, 141, 144, 145, 146, 147, 148, 149, 150, 213, 236 expatriate, 34, 43, 45, 46, 47, 49, 50, 64, 65, 66, 67, 77, 103, 136, 146, 147, 148, 204, 205, 209 exploitation, i, 1, 31, 51, 54, 61, 112, 113, 133, 134, 140, 155, 160, 162, 176 exports, xv, xvi, 40, 41, 42, 46, 77, 91, 92, 128, 130, 131, 138, 142, 143, 228, 234, 241, 246 family, xvi, xix, 174, 182, 189, 191, 199 family migration, 171, 180, 182 family reunion, 12, 90 Family Sponsored Stream, xvi, 174, 189, 191 FDI, 43, 44, 65, 119, 131, 135, 137, 148 fees, xxvii, 31, 55, 71, 104, 110, 113, 115, 142, 153, 158, 159, 161, 162 female labour participation, 119, 134 Female migration, 21 feminisation, xi, 133 fertility, 4, 9, 19, 61, 86, 89, 94, 120, 122, 123, 125, 144, 165, 168, 215, 253 fertility decline, 4

226

Index

fiscal, 46, 67, 83, 137, 160, 225, 233 flows, i, xxv, xxvi, xxviii, 1, 12, 17, 25, 32, 33, 40, 42, 43, 45, 53, 56, 62, 65, 67, 74, 81, 82, 83, 84, 90, 91, 93, 95, 114, 115, 117, 119, 121, 124, 125, 127, 133, 137, 140, 142, 149, 151, 157, 159, 160, 161, 169, 173, 185, 186, 191, 204, 205, 206, 213, 217, 223, 224, 226, 227, 228, 244, 245, 247 footloose, 135 foreign born, xx, 219 Foreign Direct Investment, 11, 34, 38, 40, 65, 108, 119, 214, 226 foreign exchange, xxv, 20, 33, 40, 47, 63, 72, 92, 106, 121, 137, 138, 142, 196, 227 foreign residents, 101 foreign spouses, 61 foreign students, xv, 15 fraud, xxvii, 140 Free Trade Agreement (FTA), xii, xxi, 69, 71, 77, 108, 109, 111, 152, 210, 211, 236, 237, 238, 239, 240, 241, 242, 243, 247, 254 gatekeepers, 30, 55 GATS, 68, 70, 131, 150, 160, 237 GATT, 110, 255 generations, 10, 28, 32, 46, 65 geography, 167 global city, 136, 203 Global Commission on International Migration, 3, 26, 262, 263 globalization, i, xxv, 72, 74, 91 GMS (Greater Mekong Subregion), xxii, 152, 158 governance, xxvi, 62, 73, 74, 133, 156 government involvement, ix, 33 graduates, 24, 37, 100 growth triangles, 154 Guatemala, 25, 221, 239, 240

H1B, 23 harmonization, 68 health, 24, 37, 46, 57, 63, 107, 113, 131, 134, 137, 153, 155, 159, 172, 177, 207, 216, 223, 226, 227, 229, 253 health professionals, 24, 155 high skill, 17, 33, 52, 60, 207 higher education, 45, 194, 260 history, 17, 38, 165, 167, 169, 176, 213 homogeneity, 57, 61, 94 Honduras, 25, 221, 239, 240 Hong Kong, i, vi, 2, 6, 7, 8, 11, 17, 18, 22, 23, 27, 48, 58, 83, 84, 85, 86, 88, 89, 90, 91, 92, 94, 95, 96, 98, 99, 100, 101, 102, 104, 105, 110, 111, 114, 121, 123, 125, 126, 129, 139, 185, 186, 203, 249, 252, 257, 268, 269, 271 horticultural workers, 176 host country, xii, 162, 225 housing, 31, 32, 47, 103, 122, 123, 137, 159, 198 human capital, xvi, 1, 29, 36, 46, 53, 66, 101, 136, 137, 139, 154, 155, 161, 273 human resources, xxv, 37, 74, 78, 101, 113, 139, 142, 155, 176, 253 humanitarian migration, 171 Iceland, 15, 241 illegal migration, xxvii, 33, 51, 62, 132, 149, 152, 207 ILO, ii, vii, 109, 112, 155, 156, 161, 253, 254, 263 immigration industry, ix, 30, 32, 55 impact, vi, ix, x, xi, xxv, 26, 35, 36, 37, 40, 43, 44, 45, 46, 55, 73, 76, 79, 84, 91, 93, 96, 117, 121, 133, 134, 135, 140, 155, 176, 180, 208, 225, 226, 227, 230, 245, 258, 259, 263, 264, 266, 268, 271, 272

227

Index

imports, xv, xvi, 40, 41, 42, 44, 92, 119 imprisonment, 105, 132 income, xv, xxii, xxv, 3, 26, 27, 29, 38, 39, 51, 52, 53, 77, 81, 83, 93, 95, 101, 106, 114, 128, 134, 136, 138, 159, 175, 180, 203, 206, 207, 208, 224, 225, 226, 227, 228, 253, 266 Indonesia, i, vi, 2, 5, 6, 7, 8, 9, 11, 18, 19, 20, 21, 22, 25, 27, 28, 36, 40, 42, 43, 48, 53, 57, 61, 62, 70, 88, 89, 97, 108, 109, 110, 111, 118, 119, 121, 122, 124, 125, 126, 127, 129, 132, 133, 138, 140, 141, 142, 152, 153, 156, 157, 159, 185, 249, 255, 257, 263, 269 informal, 33, 40, 43, 45, 57, 61, 137, 138, 148, 215, 225 information and communication, 64 information technology, 45, 93, 100, 153, 224 infrastructure, 47, 74, 90, 95, 96, 121, 224 innovation, 33, 136 institutionalized, 32, 105 integration, i, xxv, xxvi, xxvii, xxviii, 1, 102, 105, 113, 227, 253, 255 intergenerational, 10 intermediaries, 30, 31, 35, 111 internal migration, 185 international conventions, 157, 163 International Labour Organization (ILO), ii, xxii, xxvii, 37, 250, 264 international marriage, 182 International/Humanitarian Stream, xvi, 174, 190 intervention, 32, 34, 35, 36, 49, 70, 133, 145, 178 intra corporate transferees, 152 investment, i, 34, 42, 44, 46, 67, 68, 93, 94, 102, 106, 119, 137,

138, 143, 148, 150, 151, 154, 155, 161, 173, 205, 206, 216, 226, 228, 237, 253 IOM, ii, 250 irregular migrants, 19, 22, 61, 107, 148 irregular workers, 61, 105, 128, 148 Japan, i, vi, 2, 5, 6, 8, 11, 18, 20, 21, 22, 23, 27, 31, 48, 58, 61, 83, 84, 85, 86, 89, 90, 91, 92, 94, 96, 99, 102, 104, 105, 107, 108, 109, 111, 114, 120, 121, 123, 125, 126, 127, 128, 130, 136, 140, 152, 175, 194, 195, 196, 197, 200, 223, 239, 240, 249, 260, 261, 262, 263, 264, 266, 269, 272 knowledge sharing, xxvii knowledge transfer, 46, 93 Korea, i, ii, v, vi, xv, xxii, 11, 14, 16, 17, 18, 19, 20, 21, 27, 34, 40, 46, 48, 59, 61, 67, 83, 84, 85, 86, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 99, 102, 104, 106, 107, 109, 110, 111, 114, 121, 123, 125, 126, 128, 130, 175, 189, 190, 194, 195, 196, 197, 200, 237, 238, 239, 240, 249, 251, 254, 257, 260, 264, 265, 267, 272 Korea National Committee for Pacific Economic Cooperation (KOPEC), ii, iii, v, vii, xxii, 254, 257, 260, 265, 267 labour agreements, xi, xii, 64, 110, 111, 113, 144, 153, 242, 243 labour intensive, 120, 129, 136, 144, 207, 208 labour market information, 69, 115, 152 labour market segmentation, ix, 29, 72 labour market tested, xvii, 195, 196 labour markets, 17, 30, 33, 37, 51, 78, 121, 128, 174, 206

228

Index

labour migration, i, v, vi, vii, ix, x, xi, xii, xvi, xix, xxvi, xxvii, 1, 3, 11, 17, 21, 25, 26, 27, 28, 29, 30, 31, 35, 36, 42, 50, 52, 53, 54, 55, 56, 57, 60, 62, 63, 68, 71, 72, 74, 75, 76, 90, 91, 95, 96, 97, 99, 106, 108, 111, 112, 113, 117, 118, 119, 124, 125, 133,Ӥ140, 142, 149, 151, 153, 167, 174, 214, 215, 231, 232, 236, 244, 257, 258, 262, 263, 265, 267, 268, 269, 270, 271, 272 labour mobility, i, ii, v, vi, vii, ix, x, xi, xii, xiii, xxv, xxvii, xxviii, 1, 3, 11, 12, 54, 69, 74, 81, 82, 84, 90, 99, 114, 117, 131, 148, 149, 150, 152, 165, 209, 213, 214, 224, 225, 226, 230, 235, 242, 249, 251, 253, 257, 259, 260, 264, 265, 266, 267, 269, 270, 271, 272 labour shortage, 1, 33, 95, 114, 118, 120, 125, 145, 185, 192, 220, 239, 245 labour surplus, 19, 33, 95, 114, 120, 148, 159, 161 laissez faire, 121 language, 23, 34, 52, 64, 66, 77, 78, 93, 107, 109, 135, 152, 153, 154, 162, 173, 180, 200, 246 language test, 107 Latin America, 5, 25, 31, 38, 40, 76, 94, 213, 214, 215, 217, 218, 222, 226, 227, 230, 244, 261, 272 lawyers, 30, 31, 229 legal migration, 25, 54, 61, 104 legalize, 104, 105, 145 levy, 61, 62, 97, 144, 145, 146, 149, 158 liberalization, 1, 71, 74, 82, 108, 111, 131, 154, 237, 240 licensing, 64, 68, 143, 151, 152, 154, 161 Liechtenstein, 241

linkages, x, 12, 32, 44, 52, 64, 66, 74, 78, 93, 203, 265 Long Term Temporary Business Migration (457), 23 low income, 2, 3, 27, 29, 36, 52, 74, 81, 82, 95, 136 low skill, 17, 25, 167, 207, 208, 209 macro-economic, 11, 206, 228 Malaysia, i, vi, 5, 7, 8, 9, 11, 18, 19, 20, 21, 23, 25, 27, 28, 48, 58, 61, 71, 89, 97, 109, 118, 119, 120, 122, 125, 126, 127, 128, 129, 130, 133, 135, 136, 137, 141, 144, 145, 147, 148, 154, 159, 160, 186, 189, 194, 196, 197, 238, 249, 265 management of migration, 2, 67, 158 managers, 69, 131, 136, 148, 150, 175, 211, 236 manufacturing, 42, 93, 94, 97, 120, 125, 129, 130, 135, 137, 144, 145, 148, 171, 172 market forces, 106, 142 marriage, 61, 65, 191 media, 27, 79, 156, 173, 197, 204, 205, 260 medical examinations, 243 megacities, 203 Mercosur, 240, 242 Mexico, i, vii, xix, 5, 6, 7, 8, 9, 11, 12, 18, 25, 27, 28, 40, 48, 58, 60, 65, 69, 109, 207, 213, 214, 215, 218, 220, 221, 224, 226, 227, 228, 232, 235, 237, 238, 239, 240, 242, 243, 244, 245, 250, 252, 267 Middle East, 20, 21, 22, 117, 124, 125, 126, 127, 128, 169 middlemen, 12, 31, 44, 63, 132 migrant communities, xxvi, xxvii migration, 246 migration and development, 3, 10, 44, 50, 51, 74, 77, 176, 209, 210, 254

229

Index

migration flows, x, xxvi, 88, 115 migration industry, xxvii, 12, 35, 72, 76 Miscellaneous Work Permit (MWP), xxii, 147 Mode 4, 68, 71, 151, 152, 160, 242 model standard contract, 161 modernization, 42 momentum, 30, 32, 214 Mongolia, i, vi, 11, 83, 84, 85, 86, 89, 90, 92, 96, 97, 98, 107, 108, 109, 110, 111, 249, 270 monitoring, 109, 111, 156, 157, 191 MOU, 71, 153, 154, 156 multilateral agreement, 158, 235 Mutual Recognition Arrangement (MRA), xxii, 68, 69, 150, 151, 154 National Youth Commission (NYC), 103 nationality, 66, 78, 89, 91, 94, 106, 114 natural increase, xix, 4, 123, 131, 169 natural persons, 68, 71, 82, 108, 109, 112, 131, 150, 151, 152, 160, 241 neoclassical economic theory,, 72 networks, 31, 32, 44, 66, 69, 74, 93, 94, 109, 113, 114, 147, 152, 162, 191, 224, 233 New Zealand, i, vi, 6, 8, 9, 11, 12, 13, 18, 27, 48, 59, 60, 75, 91, 126, 129, 165, 166, 167, 168, 169, 172, 173, 174, 175, 176, 177, 182, 183, 184, 186, 187, 188, 190, 191, 194, 195, 196, 197, 198, 200, 201, 203, 204, 205, 206, 207, 208, 209, 210, 211, 240, 250, 252, 253, 258, 259, 261, 262, 263, 267, 268, 270, 271 New Zealand Immigration Programme, xxii, 173 NGOs, xxii, 63, 94, 133, 157, 158

Nicaragua, 239, 240 NIEs, 125, 126, 127, 128 North American Free Trade Agreement (NAFTA), xxii, 67, 69, 70, 214, 220, 236, 237, 238, 239, 240, 242, 266 Northeast Asia, ii, v, 122, 124 Norway, 14, 234, 241 nurses, 24, 25, 33, 37, 109, 130, 131, 139, 152, 229 occupational health, 193 occupational priority, 173 occupational skidding, 24 occupations, 25, 29, 34, 53, 62, 68, 69, 89, 130, 134, 146, 148, 149, 150, 151, 161, 226, 231, 239 OECD, 5, 13, 14, 15, 16, 23, 36, 38, 44, 93, 94, 109, 129, 131, 139, 165, 166, 168, 200, 209, 242, 255, 261, 263, 266, 267, 268 officials, ii, xxviii, 12, 30, 31, 34, 55, 70, 109, 156, 158 offshore, 171, 178, 198, 199 oil, 50, 124, 125, 127, 128, 135, 137, 138, 157, 228 onshore migrants, 198 orientation, 63, 77, 110, 143, 171, 246 origin, i, xxv, xxvi, 2, 10, 12, 27, 31, 32, 33, 34, 35, 36, 37, 38, 40, 43, 44, 49, 51, 52, 63, 69, 70, 73, 74, 76, 77, 78, 79, 89, 97, 106, 139, 148, 150, 158, 167, 169, 176, 178, 186, 194, 200, 209, 210, 221, 232 Overseas Contract Worker (OCW), xi, xv, xxii, 22, 23, 24, 25, 29, 30, 31, 43, 64, 117, 125, 132, 213 overstaying, 103, 104, 105, 110, 155, 159 Pacific, i, ii, iii, v, vii, xxv, xxvi, xxviii, 1, 2, 3, 10, 11, 12, 14, 20, 21, 31, 32, 35, 36, 37, 38, 43, 44, 55, 56, 57, 59, 60, 62, 67,

230

Index

72, 73, 74, 76, 105, 112, 165, 167, 171, 172, 173, 176, 177, 191, 209, 210, 213, 215, 216, 217, 218, 223, 235, 236, 237, 240, 241, 243, 246, 247, 250, 251, 255, 257, 259, 260, 261, 262, 263, 264, 265, 266, 267, 269, 270, 271, 272 Pacific Access Category, 191, 209 Pacific Americas, ii, vi, 216, 217, 246 Panama, 238, 240 Paraguay, 240 part time, 77, 246 PECC, i, ii, iii, v, xiii, xxvi, xxvii, xxviii, 73, 74, 213, 214, 215, 218, 224, 227, 229, 235, 236, 237, 243, 246, 249, 251, 255, 257, 259, 260, 264, 265, 266, 267, 269, 270, 271, 272 pension portability, xxvii, 77, 232, 234, 246 people smuggling, 54, 75 PEP (Personalised Employment Pass), 146 perception, 55 permanent migration, ix, 12, 17, 30, 50, 51, 56, 71, 76, 124, 150, 165, 166, 176, 184, 186, 193, 240, 245 Personalised Employment Pass (PEP), xxii, 146 Peru, i, vii, 5, 7, 8, 9, 11, 18, 27, 28, 49, 58, 67, 89, 109, 213, 214, 215, 222, 223, 224, 225, 226, 228, 229, 233, 234, 235, 236, 237, 238, 239, 240, 241, 244, 245, 250, 269 Philippine Overseas Employment Administration (POEA), 143 Philippines, i, ii, iii, vi, 5, 7, 8, 9, 11, 12, 18, 20, 21, 22, 23, 24, 25, 27, 28, 33, 37, 40, 42, 43, 49, 53, 58, 63, 64, 65, 70, 71, 88, 89, 97, 109, 110, 111, 118, 119, 120, 122, 123, 124, 125,

126, 127, 129, 130, 131, 132, 133, 134, 137, 138, 139, 140, 141, 142, 143, 152, 153, 154, 156, 185, 186, 189, 190, 195, 196, 207, 220, 249, 250, 251, 252, 258, 260, 261, 262, 269, 270 physicians, 37 pioneer, 32, 237 placement, xxvii, 55, 77, 113, 115, 158, 160, 161, 162, 246 plantations, 148 points system, 171 police, 95, 104, 105, 106, 107 policy, v, xxv, xxvi, xxviii, 1, 10, 11, 13, 29, 30, 32, 35, 36, 37, 43, 44, 45, 47, 49, 50, 51, 53, 57, 59, 60, 61, 63, 64, 67, 73, 74, 75, 77, 78, 79, 82, 83, 95, 98, 99, 100, 103, 105, 107, 110, 119, 128, 132, 133, 135, 137, 139, 141, 142, 143, 145, 146, 147,Ӥ154, 157, 160, 167, 171, 172, 173, 174, 175, 176, 177, 180, 191, 192, 197, 199, 200, 204, 205, 207, 208, 209, 210, 213, 214, 230, 233, 235, 245, 246, 254, 255, 260 population decline, 4 population increase, 123, 131 portability, 64, 77, 78, 115, 149, 159, 162, 234, 245, 246 postwar period, 90, 167 poverty, xv, 3, 27, 28, 36, 38, 44, 55, 74, 75, 78, 128, 132, 137, 142, 214, 226, 263, 267 private sector, xxvii, 2, 47, 63, 112, 230, 253 process, xxviii, 10, 21, 29, 31, 32, 33, 35, 43, 53, 55, 61, 63, 72, 73, 76, 81, 96, 102, 110, 111, 124, 128, 131, 145, 174, 200, 220, 231, 233, 238, 241, 253, 255 productivity, xxv, 10, 17, 81, 131, 137, 175, 180

231

Index

Professional Visit Pass (PVP), 146 professional workers, 71, 90, 102, 106, 108, 114, 130, 142, 150 projection, i, xvi, 168, 258 protection, xxvi, xxvii, xxviii, 25, 34, 64, 68, 71, 82, 96, 107, 109, 113, 142, 143, 146, 149, 151, 153, 154, 155, 156, 157, 158, 159, 160, 162, 197, 233, 244, 247 provident fund, 64, 143 provincial, 43, 47, 105, 142 psychological, 134 public-private partnerships, xxvii pull factors, 82, 118, 121, 125, 128, 206 push factors, 82, 118, 125 PVP (Professional Visit Pass, 146 qualification recognition, 115 quotas, 237 receiving countries, x, xi, 73, 82, 83, 88, 90, 93, 95, 96, 101, 105, 108, 112, 113, 115, 117, 118, 121, 125, 132, 133, 140, 144, 148, 149, 155, 156, 157, 158, 159, 160, 161, 162, 214, 215, 225, 228, 245, 247 recommendations, x, xi, xiii, xxvi, xxviii, 3, 72, 73, 74, 154, 160, 161, 174, 193, 246 recruiters, 30, 31, 110, 143, 153 refugees, 12, 19, 59, 84, 105, 118, 124, 172, 185, 191, 221, 234 regional cooperation, xxvi, 67, 112 regional trade arrangements (RTAs), 150 regionalization, xxv registration, 62, 133, 145, 149, 158 regularization, 222 regulation, 64, 207 re-migration, 104 remittances, i, ix, x, xv, xvi, xvii, xix, xxvii, 11, 31, 33, 38, 39, 40, 41, 42, 43, 44, 51, 55, 65, 67, 72, 75, 76, 78, 84, 91, 92, 93, 101, 121, 133, 134, 137, 138,

139, 143, 155, 158, 160, 161, 162, 210, 214, 226, 227, 228, 229, 232, 233, 246, 261, 262, 266, 267,Ӥ268, 270, 272 repatriation, 64, 105, 128, 132, 143, 145 replacement, 93, 122 Republic of Korea, i, 8, 249 residents, xx, 16, 19, 22, 26, 50, 72, 131, 147, 153, 171, 172, 177, 178, 183, 191, 194, 196, 201, 202, 204 restriction, 53, 82, 233 retirement age, 120 return migration, ix, 34, 46, 47, 49, 93, 95, 106, 113, 147, 154, 155, 184, 203 returnees, 23, 46, 47, 103, 104, 106, 112, 115, 134, 140, 142, 156, 158, 159, 162 reverse brain drain, 46, 67, 93, 102, 272, 273 rights, 34, 35, 51, 52, 57, 61, 62, 63, 67, 70, 71, 77, 79, 105, 106, 108, 111, 112, 142, 143, 149, 150, 151, 153, 156, 157, 208, 215, 232, 243, 244 risk minimization, 32 RSE scheme, 177 rural, 28, 43, 81, 118, 134, 244 safety valve, 134 scapegoating, 79 scientists, 45, 46, 93, 95, 103 second generation, 113, 203 security, xxv, 2, 29, 64, 68, 70, 75, 105, 132, 145, 148, 151, 160, 162 segmentation, 21, 29 semi skilled, xi, 21, 24, 62, 89, 113, 117, 119, 120, 121, 125, 127, 128, 129, 130, 131, 132, 136, 140, 141, 144, 145, 146, 149, 154, 171, 176, 194, 213, 236, 243 sending countries, x, xi, xii, 59, 66, 73, 82, 83, 84, 89, 90, 91, 101,

232

Index

105, 107, 108, 110, 111, 112, 121, 125, 139, 140, 142, 143, 149, 153, 154, 155, 156, 157, 159, 160, 161, 162, 213, 214, 217, 220, 221, 229, 232 sensitivity, 68, 73, 150 Seoul, ii, v, 254, 257, 259, 260, 264, 265, 266, 267, 270, 271, 272 September 11th, 2 services, 25, 34, 47, 55, 62, 65, 68, 71, 82, 83, 94, 97, 101, 102, 107, 108, 109, 111, 117, 120, 121, 123, 124, 125, 129, 130, 133, 134, 135, 142, 147, 149, 151, 152, 153, 155, 159, 160, 162, 175, 206, 207, 208, 210, 215, 217, 224, 225, 227, 229, 237, 239, 240, 241, 242, 253, 255 settlement, xii, 16, 17, 50, 51, 53, 59, 60, 61, 73, 142, 147, 165, 172, 174, 175, 177, 185, 192, 198, 200, 260, 268 sex ratio, xix, 24, 188 Singapore, i, vi, 5, 6, 7, 8, 9, 11, 12, 13, 17, 18, 20, 21, 23, 27, 31, 49, 58, 61, 63, 89, 91, 109, 118, 119, 120, 122, 123, 125, 126, 127, 128, 129, 130, 131, 135, 136, 141, 144, 146, 147, 148, 152, 153, 159, 160, 203, 237, 238, 239, 240, 241, 249, 250, 251, 253, 257, 259, 261, 266, 270, 272 skill transfer, 159 skilled migration, ix, xi, xii, 23, 44, 52, 53, 59, 107, 131, 175, 187, 200, 207, 208, 209, 258, 259, 265, 270 Skilled/Business Stream, 174, 189, 190, 200 smart card, 154 social adjustment, xxvi social cohesion, 117, 215

social development, vi, 1, 3, 36, 43, 77, 209 social networks, ix, xxvii, 32, 33, 44, 54, 72, 139, 161, 162 social security, 64, 94, 114, 115, 155, 158, 159, 162, 183, 217, 234, 242 South Asia, 39, 126, 132, 133, 147 Southeast Asia, ii, vi, 122, 124, 125, 132 south-north migration, 49, 78 Special Economic Zone, 106 sponsorship, 174 spouses, 61, 99, 180, 182, 205 stakeholders, 160, 180 State Specific and Regional Migration (SSRM), xxiii, 172, 264 stereotype, 57, 79 stocks, xv, xvi, 18, 20, 29, 52, 125 structural adjustment, xi, 136 student migration, 200 supply, 28, 29, 60, 62, 73, 82, 95, 113, 118, 119, 120, 121, 127, 136, 137, 139, 143, 144, 177, 208, 225, 243 Switzerland, 15, 234, 241, 262 syndicates, 30 talent, xxv, 29, 36, 37, 47, 100, 101, 131, 136, 139, 146, 147 target, 33, 128, 243 task force, ii, xiii, xxvii, 100, 106, 158, 251, 268 tax, 65, 66, 103, 114, 154, 155, 158, 217, 233 teachers, 25, 113, 130, 207 technicians, 130, 148, 229 technology transfer, xxvii, 47, 66, 108 Temporary Business Entry Visa, 193 Temporary Business Visa, 174, 175 temporary workers, v, 15, 52, 143, 175, 176, 214, 220, 221, 229, 231, 236, 243, 245

233

Index

Thailand, i, vi, 6, 8, 9, 11, 18, 19, 20, 22, 25, 27, 28, 31, 36, 40, 42, 49, 58, 62, 71, 89, 97, 109, 110, 111, 118, 119, 120, 122, 124, 125, 126, 127, 128, 130, 132, 133, 138, 140, 141, 144, 145, 146, 148, 149, 152, 153, 157, 160, 178, 197, 238, 241, 249, 260, 265, 271 Total Fertility Rate (TFR), xvi, xxiii, 4, 85, 86, 120, 122, 123, 124, 128 tourism, 72, 147, 153, 207, 211, 231, 244 trade, i, xxvii, xxviii, 30, 44, 67, 68, 71, 82, 93, 108, 109, 111, 113, 119, 130, 133, 150, 151, 173, 174, 205, 207, 214, 215, 231, 236, 237, 238, 239, 240, 241, 242, 245, 247, 253, 254, 255 traditional immigration countries, 91 trafficking, xxvii, 54, 69, 75, 105, 112, 113, 158, 159 trainees, 61, 71, 99, 108, 111, 140, 153 training, xxvi, xxvii, 31, 33, 34, 55, 63, 71, 77, 93, 97, 107, 108, 109, 111, 112, 135, 142, 143, 144, 153, 154, 155, 158, 161, 162, 174, 177, 209, 246 transaction costs, x, xxvi, 31, 55, 61, 70, 76, 78, 114, 137, 162 transnationalism, 192 transparency, 110, 113, 158, 161, 163 unauthorized migrants, 218 underemployment, 106, 127 underground, 57, 136 undocumented migration, 1, 2, 31, 33, 54, 60, 61, 62, 63, 75 unemployment, 62, 81, 83, 94, 106, 121, 123, 125, 127, 132, 133, 134, 139, 142, 168, 171, 180, 184, 208

unilateral, 75, 149 unions, 134, 160, 180 United Nations, 37, 55, 86, 123, 156, 210, 253 United States, i, vi, 6, 7, 8, 9, 11, 12, 13, 23, 25, 26, 37, 44, 46, 48, 53, 59, 60, 61, 62, 65, 70, 75, 93, 103, 189, 190, 193, 198, 203, 207, 213, 214, 218, 219, 220, 221, 223, 224, 227, 228, 229, 232, 234, 235, 237, 238, 239, 240, 241, 242, 243, 245, 250, 254, 255,Ӥ267 unskilled, xi, xxv, 17, 21, 24, 33, 43, 50, 51, 52, 53, 57, 62, 73, 117, 119, 120, 121, 125, 127, 128, 129, 130, 131, 132, 133, 135, 136, 140, 141, 144, 145, 146, 149, 154, 156, 166, 172, 175, 176, 180, 194, 207, 208, 210, 213, 214, 236, 239, 243 urban, 43, 81, 99, 105, 118, 134, 172, 221 Uruguay, 112, 234, 239, 240, 244 USAID, 37 US-Singapore Free Trade Agreement (USSFTA), xxiii, 152 Viet Khu, 34 Vietnam, i, 11, 18, 20, 22, 27, 28, 34, 49, 58, 89, 97, 104, 108, 110, 111, 118, 121, 123, 124, 125, 126, 127, 128, 130, 132, 134, 138, 139, 141, 142, 143, 185, 186, 249, 260 visa, xxvii, 60, 70, 95, 99, 105, 110, 133, 152, 167, 174, 175, 182, 183, 192, 194, 198, 199, 210, 214, 221, 224, 229, 230, 231, 234, 236, 237, 238, 245, 265 visitors, 19, 150, 152, 178, 192, 211, 220, 231, 234, 236, 237, 240 vocational training, 135, 143 war on talent, 29

234

Index

welfare, 62, 105, 107, 108, 138, 140, 142, 143, 149, 153, 156, 160 White Australia Policy, 185 work permit, xvi, xvii, 62, 99, 101, 104, 112, 129, 130, 132, 135, 144, 145, 146, 147, 148, 149, 175, 194, 195, 196, 200, 231, 237, 243 workforce, 4, 5, 7, 10, 12, 13, 28, 60, 117, 128, 129, 130, 143, 144, 145, 168, 176, 184, 194, 205, 215, 257, 262, 269, 270

Working Holiday Maker (WHM), xxiii, 14, 175, 192 World Bank, 3, 10, 27, 28, 37, 38, 39, 41, 42, 75, 85, 90, 92, 124, 137, 176, 209, 218, 226, 227, 228, 253, 254, 261, 266, 272 World Trade Organisation (WTO), xxiii, 71, 92, 109, 110, 160, 237, 242, 253 youth, 4, 5, 10, 27, 59, 65, 103, 215, 262, 271 youth bulge, 4, 10, 262

235