Removing national barriers to skilled labour mobility in ASEAN is difficult. RCEP and the AQRF can help.
A liberal economic environment that allows for the free movement of goods and services in Southeast Asia is required for ASEAN to fulfil its centrality aspirations. Trade and investment can be encouraged through greater regional integration; but a crucial component of this integration process is the free movement of skilled labour.
Trade and investment will not be optimised and a single ASEAN market and production base realised without greater skilled labour mobility. As member states seek to upgrade technologically, and with the entry of more cutting-edge industries and knowledge-based development, skilled labour will be in greater demand and should be allowed to be more mobile.
Otherwise, the implementation of the Fourth Industrial Revolution (IR4.0), the introduction of electronic commerce and digitalisation will be delayed. The world talks of driverless cars, electric vehicles, alternative energy sources, robotics, AI and other developments that will fundamentally change manufacturing, and even agriculture and the services sectors. Skilled labour is necessary to drive these looming changes.
Mutual recognition agreements (MRAs) that recognise the qualifications earned in one country as valid in the other are an essential policy tool to remove barriers to skilled labour mobility. MRAs are very much on the ASEAN agenda. In July 2020, the 53rd meeting of the ASEAN Consultative Committee for Standards and Quality discussed the ASEAN Framework Agreement on MRAs. The ASEAN Standards and Conformance Strategic Plan, another related issue, received attention at this committee meeting as well. However, attesting to the difficulty of this integration issue, ASEAN has made more progress on common sanitary and phytosanitary standards than on the mutual recognition of professional qualifications.
Within ASEAN there are real constraints hindering the cross-border movement of skilled labour and negotiating and implementing MRAs. Levels of economic development and preparedness for greater skilled labour mobility differ greatly among member economies. The less affluent ASEAN member states are concerned about the prospects of a possible brain drain with greater intra-regional skilled labour mobility. More skilled labour could flow into the richer countries, depriving the poorer ones of talent.
These doubts are supported by professional association lobbies keen to retain their dominance in their home labour markets.
Wealthier member states are concerned about the equivalence of qualifications; whether the quality of degrees, diplomas and certificates obtained in other member states are on par with those obtained at home. These doubts are supported by professional association lobbies keen to retain their dominance in their home labour markets.
A more structural reason that hinders the movement of skilled labour is that some industries in ASEAN do not have common regional standards. Common guidelines for industries, where applicable, may be a necessary precursor before greater skilled labour mobility is possible.
Culture and language also pose constraints. For example, Thai and Vietnamese are not particularly easy languages to master. A nurse who performs well in an English-speaking environment may not be as effective in Cambodia or Thailand.
The Regional Comprehensive Economic Partnership (RCEP) agreement signed between ASEAN and five ASEAN dialogue partners in November 2020 is equipped to address some of these barriers through the chapter on professional services. This sets the ground for negotiations between two or more signatories on the mutual recognition of qualifications.
Another useful ASEAN initiative is the ASEAN Qualifications Reference Framework (AQRF) developed in 2014 and revised in 2020. By virtue of being regional in scope, this framework takes a powerful step towards promoting the mobility of skilled labour. Since AQRF is tasked with developing mutually recognised national qualifications systems, it promises to enhance understanding of and confidence in each other’s qualifications systems and educational standards. ASEAN member states can gain an appreciation of the requisite qualifications that the other states demand and of their respective knowledge ecosystems.
Greater skilled labour mobility is necessary for greater ASEAN integration but the problems that are inherent to the region cannot be dismissed. Accepting these challenges, there is no doubt that much needs to be done to encourage the mobility of skilled labour and that ASEAN would lose considerably if it does not attend to this integration issue. The RCEP and AQRF are here to help.
Shankaran Nambiar is Head of Research at the Malaysian Institute of Economic Research.