3 Advantages of Labor Migration in Asia

Opinion01.04.2017
asia city street

Asia plays a significant role in global migration trends. Being the most populous continent on the planet, it is home to two of the most populous nations in the world, namely India and China, and many Asian countries are still in a phase of strong population growth with a large pool of young people, even if this trend is slowing down or, as in the case of Singapore, China and Thailand, has come to an end. Beyond this, Asia is also home to countries that are still struggling to tackle poverty issues, political unrest, and economic growth. These factors all play a role in the emigration of an estimated 77 million Asians worldwide. The majority of Asian emigrants end up in the Middle East, North America, and Europe respectively. While significant portions of Asian emigrants permanently migrate to North American and European countries, labor migration from and within Asia itself is paramount to the region’s economy. The Philippines, India, Pakistan, and China are still the biggest countries of origin. And this may be surprising to many but the main destination for Asian workers is the Middle East. Saudi Arabia remains a major receiving country for the Philippines, India, and Pakistan. Within the ASEAN region, Singapore is also a major receiving country for the Philippines, Indonesia, and Bangladesh. Labor migration within Asia itself is seen as a temporary trend with foreign workers choosing to work for a few months up to a few years before returning home. Most do not resettle in receiving countries. However, with the majority of workers being low-skilled workers who filled labor gaps in receiving countries, especially in the construction industry, labor migration has posed quite a few challenges to governments in Asia. Nevertheless, labor migration has its benefits not only to receiving countries but also to sending countries.

Filling of Labor Gaps

Labor shortages in Asia have been a growing problem. In middle to high income countries in the region, industries that need more low-skilled labor like agriculture, fishing, domestic workers, manufacturing, and construction are facing these shortages the most. They have been witnessing the movement of their own workforce from these industries into urban areas and in more service oriented industries. Japan, South Korea, Taiwan, Hong Kong, China, Thailand, and Malaysia are facing the most acute shortages in this regard , and their industries have become increasingly dependent on foreign labor. Another growing problem for the region is ageing populations. It is estimated that by 2021-2030, the ratio of elderly to the working-age population will exceed 33% in Hong Kong, China, and Singapore.  Japan, one of fastest aging countries in the world has begun to feel the pressure of its aging population on local labor markets. However, Japan itself is not a popular choice of destination for foreign workers and the government has had to address its traditional reluctance to allow migration and develop new recruitment programs to address this problem. More recently, the country’s lack of domestic workers forced the government to develop new recruitment strategies to attract domestic workers from the Philippines.  

Building Talent Pool

Asia is also home to a significant number of high-skilled emigrants who choose to migrate to more developed countries, like those in North America and Europe. A defining characteristic of high-skilled migrants from Asia is their high education level. It is noted that almost 45% of high-skilled Asian immigrants have completed their tertiary education and only 24% are considered poorly educated (compared to 34% of the global average). China, India, Brunei, Malaysia, Singapore, and the Philippines are a major source of these highly skilled workers that move to countries in North America and Europe. Moreover, while local labor markets in countries like Australia, UK, and the United States have been impacted by various economic factors, Asian immigrants have not been affected by these. In fact, it has been observed that the Asian immigrant labor market situation has been rather favorable in the US and in Europe compared to that of other immigrants and also to the native-born. Additionally, Asia is also the main source of international students in OECD countries with China and India being the biggest sending countries. With Japan, South Korea, Singapore, and Hong Kong appearing higher up in global university rankings, these countries are also receiving a significant portion of students form within Asia itself. In ASEAN, countries have been working toward a freer flow of skilled labor within the region through the use of the ASEAN Qualification Frameworks, and facilitation of temporary visa issuance. While progress has been slow in enhancing this “freer flow”, member states have agreed to working towards making it easier for workers in different professional categories to seek work within the region, while building core competencies and qualifications along with strengthening research capabilities. The most progress has been seen in the fields of Accountancy, Architecture, and Engineering. However, significant progress still needs to be made in the Tourism and Health Sectors (dental, medical, and nursing in particular).

Remittances

Perhaps one of the most important benefits of labor migration is the inflow of remittances to sending countries. Low-skilled and high-skilled Asian emigrants often earn significantly more in their destination countries than they would in their home countries. In some countries within the region this represents a significant contribution to the country’s GDP. As of 2015, it is noted that top remittance-receiving countries in Asia include India, China, Philippines, Pakistan, Bangladesh, Vietnam, Indonesia, Sri Lanka, South Korea, Nepal, and Thailand. India saw an inflow of USD 72.2 billion while China received USD 63.9 billion and the Philippines USD 29.7 billion respectively. These three countries are also the top remittance-receiving countries in the world. Inflows of remittances into developing countries often lead to  increased investments in health, education, and small businesses locally. 

Labor migration within Asia will continue to grow as countries continue dealing with labor shortages and aging populations. However, for receiving countries, beyond filling labor gaps, the inflow of skilled labor helps the country’s local labor markets strengthen human capital and talent pools. For sending countries, the flow of remittances back to families and communities mean that local economies also have the opportunity to grow and poverty issues are tackled.

However, countries of the region have, by and large, not seen themselves as countries of immigration, and concepts of nationhood are very exclusive, with Japan being a fairly extreme example. The reality of migration, and its benefits to the economy, is not matched by a shift in attitude towards foreigners who settle in the country. To ensure the freer flow of labor within the region which is critical for its economic prosperity, it is crucial that governments create policies and programs that facilitate a freer flow of skilled labor and a fair and competitive labor market for foreign workers, but that also make the case for a more open migration policy more publicly and more forcefully than they have done so far.