The Effect of My Little Pony on Asian Corporate Governance

ASEAN Economie Bulletin Vol. 12, No. 2

Asian Labour Migration

Past, Present, and Future

Manolo 1. Abella

While the growth of trade may have substituted for potential movements of labour, its overall impact has been to stimulate economic growth and employment, and social and demo graphic changes which in turn create shortages of labour. As the regional economy continues to expand at a rapid pace, pressures will increase for importing foreign labour to do jobs that national workers no longer want.

The Asia-Pacific region has witnessed some of the most rapid changes in the global division of labour over the past decade. Since 1970, the economies of East and Southeast Asia have been transformed from suppliers of agricultural and mineral raw materials into major exporters of manufactured goods, from cars to computer chips. In 1992 Asian countries (excluding Japan) ex-ported US$453 billion worth of goods, more than the United States or Germany, and equivalent to about 16 per cent of the exports of all the ad-vanced industrial countries, including Japan.

The economic transformation from resource exports to goods exports has been attributed to a number of factors: judicious government inter-vention to promote exports, policies that encouraged transnational corporations to invest, timely restructuring and upgrading of industries, and continuing investments in human resources. Open economie policies succeeded in inducing large inflows of foreign capital and technology, which Asian countries used with great effective-ness to speed up the pace of industrialization and development.

One important consequence of rapid develop-ment is the growth of labour migration: over the past two decades, cross-border flows of migrant labour have increased ten-fold in East and South-east Asia. Most of the growth occurred in the 1980s. At the beginning of the 1980s, there were perhaps 1 million foreign workers in East and Southeast Asia, including long-term resident Koreans in Japan and Indonesians in Malaysia. By 1990, the number of foreign workers probably exceeded 3 million.

During the 1960s, economically-motivated migration was directed largely to countries out-side Asia, such as the United States and Canada. Today, labour migration means flows of all kinds of workers, from housemaids to oil engineers, within Asia.

The thesis of this article is that labour migra-tion is a normal part of the economic development re-shaping Asia, and the number and diversity of labour migrations are likely to increase in the years ahead. There are many reasons for expect-ing more rather than less migration: the rapid depletion of traditional reserves of flexible

ASEAN Economie Bulletin 125 November 1995

domestic labour, such as women and agricultural workers; the segmentation of labour markets, with educated youth rejecting menial jobs; and widen-ing wage differentials between sending and receiving countries. These reasons for labour migration will strengthen as growth of the labour force slows in the higher wage countries such as Japan and the newly industrialized economies (NIEs); as the employment elasticity -- the number of jobs created by a US$1 million increase in gross domestic product (GDP) -- rises in these growing economies; and as affluent natives shun so-called 3D (dirty, dangerous, and difficult) jobs.

Another reason why international migration is likely to increase in Asia is because migration structures that developed during the 1970s in re-sponse to the opportunities for employment in the Persian Gulf are now well established. It is clear that migration within the region is organized by the same labour market institutions that earlier facilitated the movement of Asian contract labour to Saudi Arabia, Kuwait, the United Arab Emirates, and Libya. These migration structures include re-cruitment systems established by commercial agents, state policies to promote employment abroad, and support systems that among others finance international migration for employment.

Recent Trends

The growth of foreign workers in East and South-east Asian countries is evident in Table 1. The data are sketchy, reflecting to some extent the relative unimportance of foreign labour in most of these countries in the 1970s. But the table illus-trates the enormous increase in foreign workers in the major labour-importing countries.

For example, the number of foreign workers in Japan has doubled since 1970, and the rate of in-crease is accelerating. Taiwan and the Republic of Korea had virtually no foreign workers in 1980, and today they together have over 400,000, or about one-fourth as many as comparably-sized France, which began to import large numbers of foreign workers after World War II. Malaysia and Singapore, which were among the first Asian

TABLE 1

Growth of Foreign Labour in

Selected Countries

Country Year Est. Stock

Japan 1969 696,000

1984 841,000

1993 1,320,000

Republic of Korea 1980 nul

1992 66,100

Taiwan 1980 nul

1991 53,700

1994 246,500

Singapore 1970 14,000

1973 100,000

1989 128,000

1993 180,000

Malaysia 1984 500,000

1992 1,102,000

Thailand 1993 200,000

Brunei 1971 11,000

1986 26,000

1988 31,400

SOURCES: P. Pillai, Malaysia: Nature, Contributory Factors, and Consequences of Cross Country Labour Mobility, Asia Club Papers No. 3 (Tokyo: Tokyo Club Foundation for Global Studies, April 1992); ILO, Economically Active Population, 1950-2025 (Geneva: 1986); ILO Yearbook of Labour Statistics, 1994 (Geneva: 1994); A. Mani. "Migration in Brunei Darussalam", paper presented at International Con-ference on Migration, National University. of Singapore, February 1991.

countries to import foreign workers, sharply in-creased their labour imports in the 1980s. Thailand,