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We need stronger commitment on skills mobility to realize the AEC

ADB's Asian Development blog (online), 13 May 2016 - There was great news out of last year’s Association of Southeast Asian Nations (ASEAN) Summit in Kuala Lumpur – ASEAN has accomplished 92.7% of the high-priority measures it had set for itself in advance of the start of the ASEAN Economic Community (AEC) this year. But despite this progress, it is the remaining 7.3% that will be the key to the success of the AEC.

A significant part of the remaining hurdle relates to skills mobility. The potential gain from skills mobility could be very large, significantly improving the overall allocation of resources and efficiency in ASEAN’s economy as a whole. The benefits of skills mobility are potentially far greater than that of trade liberalization in the form of tariff reductions. More importantly, the potential addition of at least 14 million jobs from the successful implementation of the AEC will never be realized without skills mobility.

Mobility is also essential for workers, 12 million of which have left ASEAN altogether in the search for better professional opportunities. Fast-tracking skills mobility could help provide job options within the region which will be critical for Asean’s still youthful, but often underemployed population of 622 million people. Moreover, for low- and medium-income countries in the region to catch up with the high-income ones, they will need to benefit from the opportunities that more flexible labor markets offer them.

Thus far, ASEAN has addressed skills mobility through Mutual Recognition Arrangements (MRAs). These agreements allow members of 8 professional groups (accountants, architects, dentists, doctors, engineers, nurses, surveyors and tourism professionals) to have their qualifications recognized across the region. Among the 8 professional groups under the MRAs, architectural and engineering services have gone far ahead by recognizing and registering at ASEAN level. As a result, some 1,252 engineers and 284 architects have been included in the ASEAN Chartered Professional Engineers and ASEAN Architect Registers. Training toolkits for skilled tourism professionals have been put in place to standardize their skills and accelerate their mobility in line with the region’s intention to expand tourism and increase air connections within ASEAN.

All these achievements are still far from the underlying MRA objectives of facilitating mobility of services of professionals, exchanges of information and expertise, raising and promoting adoption of best practices on standards and qualifications of ASEAN’s workforce; and facilitating capacity building and technology transfer.

The main question remains – how can we make progress on MRA implementation more quickly? The way forward requires three key actions:

  1. We need to define clear guidelines on how foreign qualifications are going to be acknowledged. This should include compensatory measures for affected workers to encourage the development and organization of professional groups. The roles of key stakeholders such as regulatory bodies and professional groups also need to be clarified. Professional groups should subsequently be expanded to cover more technical groups once additional MRAs are signed.

  2. Given the short-term and contractual nature of labor migration within ASEAN and to speed up the skills mobility process under the AEC, the admission policies of foreign workers can be designed along with the positive circularity principle of migration, which has no permanent residency and citizenship attached. This will reduce the migration tension of skills mobility and contribute to the unique feature of ASEAN skills mobility.

  3. More proactive and concerted efforts are needed to fast-track progress on implementing MRAs. This includes setting up a specific task force to identify the bottlenecks and suggested actions, and selecting champions from professional groups by working together with the private sector. The engineer and architect groups, for instance, can be good candidates as they have made the most progress on their professional recognitions.

It is important to note that skills mobility might not be necessary for all 10 countries at once, but can be demonstrated first by some ASEAN member states where economic and labor market conditions are more conducive for foreign workers. Swift and significant actions can generate virtuous cycles of greater progress, creating a bandwagon impact that would be key to gaining political support for more willing participants and further initiatives. The future of the AEC depends on it.

by Guntur Sugiyarto, Senior Economist, Economic Research and Cooperation Department

Source: http://blogs.adb.org/blog/we-need-stronger-commitment-skills-mobility-realize-aec

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