Asean Investor

ILO, ADB cite downside of 2015 Asean integration

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Publish date: Thu, 21 Aug 2014, 03:10 PM
Marc Djandji, CFA is the Editor-in-Chief of The ASEAN Insider, a subscription-based monthly investment newsletter committed to finding compelling investments backed by powerful structural trends in Southeast Asia. He is also a co-Founder and Partner of ASEAN Strategy Group Ltd., an independent investment banking boutique focusing on cross-border M&A and corporate finance advisory for companies in the small to mid-market segment in Southeast Asia.

Asean Investment

A joint report crafted by the International Labor Organization (ILO) and the Asian Development Bank (ADB) revealed on Wednesday that 14 million new jobs will be created with the forthcoming Asean economic integration next year.

The report, titled "Asean Community 2015: Managing Integration for Better Jobs and Shared Prosperity," showed that at least 600 million women and men living in the 10 member-countries will benefit from improved livelihoods.

The Asean economic integration will allow for a freer flow of skilled labor, services, investment and goods among 10 member-countries, namely, the Philippines, Indonesia, Thailand, Myanmar, Singapore, Malaysia, Brunei Darussalam, Vietnam, Lao PDR and Cambodia.

Arjun Goswani, director of the Office of Regional Economic Integration of the ADB, however, warned in the same report that there's also a possibility that "the gains [of Asean economic integration] will not be distributed evenly between countries, economic sectors, and between men and women."

The joint ILO and ADB report added that "unless decisively managed, this could increase inequality and worsen existing labor-market deficits-such as vulnerable and informal employment and working poverty."

The report added that member-countries like the Philippines 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."

"Investment in labor productivity is critically important for the sustained development of Asean," said Goswami in a statement issued by the Asean secretariat on Wednesday.

Goswami was joined by Asean Secretary-General Le Luong Minh and Yoshiteru Uramoto, ILO assistant director general and regional director for Asia and the Pacific, at the launch on Wednesday of the ILO and ADB report at the Asean secretariat in Jakarta.

The report said the economic integration will increase the demand for highly skilled workers by 41 percent, or 14 million new jobs, while medium-skilled jobs are seen to grow by 22 percent, or 38 million, and low-skilled by 24 percent, or 12 million.

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

The report also showed that labor migration within Asean focusing on low and medium-skilled workers is likely to increase in response to demand, particularly in the construction, agricultural and domestic work sectors. The report called on Asean member-states to strengthen protection of rights of migrant workers to prevent abuses.

Among the measures suggested by the report include ratifying, implementing and enforcing international conventions; extending the coverage and portability of social security; and implementing the Asean Declaration on the Protection and Promotion of the Rights of Migrant Workers.

"Ultimately, Asean's plan for greater regional integration will be judged on how much it benefits ordinary working men and women in the region," Uramoto said. "Policy- makers must not miss this opportunity to ensure that the benefits of the region's impressive development are enjoyed by all."

By Estrella Torres

The post ILO, ADB cite downside of 2015 Asean integration appeared first on Asean Investment | Marc Djandji Blog.

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