ILO says 600 M to benefit from Asean market integration

MANILA, Philippines – Some 600 million people stand to gain from the ASEAN Economic integration in 2015, a joint study of the International Labour Organization (ILO) and Asian Development Bank showed.The study stated that the ASEAN Economic Community (AEC) offers “major employment, wage and productivity benefits if decisively managed.”

It was projected that AEC could generate some 14 million additional jobs and improve the livelihoods of 600 million women and men living in the region, but only if decisive action is taken to manage it effectively.

The AEC, which comes into effect at the end of 2015, will allow for a freer flow of skilled labour, services, investment and goods among the ten ASEAN Member States.

The report said “deeper regional integration holds great promise for shared prosperity.”

“The AEC could accelerate economic growth and structural change and double productivity in some ASEAN economies, while generating 14 million additional jobs and creating new opportunities for prosperity for hundreds of millions of people,” the report noted.

But the report cautioned that the gains will not be distributed evenly between countries, economic sectors or between women and men.

“Unless decisively managed this could increase inequality and worsen existing labour market deficits — such as vulnerable and informal employment, and working poverty,” it added.

To counter, ASEAN countries need to develop policies and institutions that support inclusive and fair development.

In particular, there is an urgent need to improve the quality, coverage and sustainability of social protection, starting with the establishment of a social protection floor for all.

“Demand for high-skilled workers will increase. By 2015 high skill jobs are projected to grow by 41 percent, or 14 million, (medium skilled jobs will grow by 22 percent or 38 million and low-skilled by 24 percent or 12 million),” he report showed.

But the report predicts that skills shortages and skills mismatches are likely to worsen, due to inadequate availability and quality of education and training.

On labor migration, the report found that migration within ASEAN currently focuses on low and medium skilled workers, “a flow which is likely to increase in response to demand, particularly in the construction, agricultural and domestic work sectors.”

The report also stated that the free flow of skilled workers that will come in with the AEC affects less than one per cent of total employment on average and will not satisfy demand.

To attract and retain their skilled workers businesses will need to compete on the basis of productivity and develop institutions to better link wages to productivity. –Sheila Crisostomo (The Philippine Star)