Before the liberalization of air services in Southeast Asia, my family made do with road trips to neighboring Singapore and southern Thailand. As much as air transport is a requisite in this region of sprawling archipelagos and mountainous mainland, it used to be limited and unaffordable. In 2008, I celebrated the advent of low-cost carriers: my first regional flight, from Kuala Lumpur to Hanoi.
Last December, the 632-million strong Association of Southeast Asian Nations (ASEAN) launched its own ASEAN Community. Tariffs and non-tariff barriers between the 10 member countries have been gradually reduced with the aim of forming the seventh largest economy in the world. Investors and “Aseanites” (ASEAN nationals) have been promised freer flow of goods, services, investment capital, and skilled labor.
The questionable economic integration aside, intra-ASEAN migrants (those moving between ASEAN countries) have increased four-fold to 6.5 million between 1990 and 2013. According to a study by the Asian Development Bank and the International Labor Organization in 2014, almost 70 percent of the region’s migrants originate from another ASEAN country.
With sustained demographic and economic differences between countries, regional labor migration will continue to rise.
There are several disconnects between ASEAN’s aspirations and its present reality.
Only skilled labor migration is promoted through ASEAN’s mutual recognition frameworks of qualifications and skills. Currently targeted at eight professions, they are negligible as a proportion of ASEAN’s total employment.
Most of regional labor migration will continue to comprise the low- and medium-skilled. A significant number of them undocumented.
More often than not, migrants do not receive similar treatment for health care and social security. As a migrant destination country, Singapore has over the years reduced or removed completely (depending on residency status) medical subsidies for non-nationals, making health care particularly expensive for 39 percent of its 5.54 million population.
Another example, migrant workers in Malaysia cannot be insured under the national Social Security Organization’s work injury and invalidity schemes.
Because of this, the country is under scrutiny for potentially violating international labor standards on equal treatment for migrant workers.
The possibility of working abroad also raises a question on how — or rather, where — one should save for retirement. One option would be to participate in the host country’s pension or provident fund scheme. In a social insurance setting, a worker typically needs to contribute a minimum number of years (for example, 15 years in Thailand) before he or she qualifies to receive a monthly pension upon retirement.
For a migrant worker like myself 15 years are a long duration to plan towards, especially when work visas are tied to a single employer.
Individual retirement saving schemes or provident funds found in Brunei Darussalam, Indonesia, Malaysia and Singapore allow migrant workers to withdraw savings when leaving the country permanently.
However, not all migrant workers can participate in the first place. Despite their reliance on foreign workforce, Brunei Darussalam and Singapore exclude migrant workers without permanent residence status from their national provident funds.
What about contributing to one’s national social security scheme? Except for the Philippines, no other ASEAN country has provisions for its overseas working population under its national social security schemes.
Social security contribution for workers, nationals or otherwise, constitutes a key cost factor for employers. At the moment, social security provisions vary remarkably in the region. Fairly comprehensive systems in Thailand and Vietnam disburse benefits for maternity, unemployment, sickness, invalidity, survivorship, and old age. Cambodia, for instance, has only begun its social health insurance scheme next to the initial work injury scheme.
Leveling up across ASEAN countries will prevent unfair, “race-to-the-bottom” competition for investment capital through lower labor costs and standards.
Focusing on the social beyond economics is part-and-parcel of regional integration. ASEAN concurs through ambitious declarations such as the ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers.
Still, ASEAN lags behind other regional blocs in the world such as MERCOSUR in South America and CARICOM in the Caribbean that have established multilateral social security agreements.
It is high time for the regional bloc to soar beyond the clouds of lofty declarations amid narrow national interests, towards the promised “people-centered and socially responsible” ASEAN Community. By Cheng Boon Ong, Maastricht, the Netherlands, 10 February 2016
The writer is a Bangkok-based policy consultant and researcher affiliated with Maastricht University and the United Nations University research institute for innovation and technology (UNU-MERIT) in the Netherlands. She is lead author of a new report, The State of Social Protection in ASEAN at the Dawn of Integration, published by the International Labor Organization’s regional office for Asia and the Pacific.
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