Sunday, October 12, 2014

ILO:::ASEAN integration to increase demand for workers – ILO-ADB study

Demand for high and low-skilled workers could increase by about 60 percent when ASEAN integration takes effect next year, a joint study by the International Labor Organization (ILO) and Asian Development Bank (ADB) concluded.

“The AEC (ASEAN Economic Community) will have major benefits for the Philippines. However, to maximize these benefits, the government must take decisive actions now, especially in terms of labor and employment as too many workers are still in poor quality jobs,” Sukti Dasgupta, chief of the ILO Regional Economic and Social Analysis Unit, said at the ILO-ADB ASEAN integration forum.

Under the planned regional integration, the AEC will set in motion the creation of a single market spanning the 10-nation bloc that includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

The integration would result in a freer flow of goods, services, investment and skilled labor coming from AEC at remarkably lower tariffs.

According to the ILO-ADB study titled “ASEAN Community 2015: Managing Integration for better jobs and shared prosperity”, the regional integration could lead to considerable economic and job gains in the Philippines and could expand the country's gross domestic product (GDP) by 7.5 percent by 2025 compared to a baseline scenario without the integration.

The study also projected a net gain of 3.1 million more jobs from 2015 to 2025.

The study found that ASEAN integration could lead to about 60 percent increased demand for high-skilled employment positions such as managers, professionals, technicians and associate professionals.

The study said medium-skilled employment could also grow by around 25 percent with positions such as clerks, craft and related trade workers, plant and machine operators and assemblers, and service and sales workers.

“This highlights the need to improve the quality and relevance of upper secondary education and technical and vocational education and training (TVET) in the Philippines to provide a smoother transition from the classroom to the workplace for Filipino youth,” the study said.

Demand for low-skilled workers, meanwhile, could likewise rise by more than 60 percent, the study said, stressing the importance of a sound primary education.

Unfortunately, the study found that 11.4 percent or 1.5 million primary school aged Filipino children are still not in school.

“Ensuring universal access to basic education and enhancing social protection can help break the intergenerational cycle of poverty and provide a pathway to decent employment,” the study said.

Priority areas for action

The study pointed out that the Philippines was in a demographic transition “where it has a high working-age population relative to its ageing dependent population.”

Despite this, the study noted that unemployment among young people is 16.6 percent, or more than twice the overall unemployment rate.

“To optimize this demographic dividend, it is essential that young people have the appropriate skills required by the labor market,” the study said.

With the Philippines' integration into the AEC, the study said that labor migration would continue to increase.

“Labour migration, particularly for low and medium-skilled workers, requires collective regional action to safeguard the rights of migrant workers, extend the coverage and portability of social security, and expand mutual skills recognition,” the study said.

Priority areas for action in the Philippines, as identified by the joint ILO-ADB study, included:

  • Creation of better jobs through industrial policies that target agro-industry and promote high-value farming products, investment in irrigation, infrastructure and transport in rural areas;
  • Enhancement of social protection programs, improved implementation of existing schemes and enforcement of better disaster preparedness and response measures;
  • Upgrade skills to meet shifting demand including effective implementation of the K-12, program; increase enrollment; minimize dropout; expand schools in remote areas; improve technical and vocational education and training; and reform the curricula to be demand-driven;
  • Improvement of protection for migrant workers especially in terms of legal and social assistance and further enforcement of laws to stop recruitment malpractice;
  • Strengthen the collective bargaining mechanisms to improve the productivity-wage link “since better mechanisms can help translate the benefits of closer economic integration into shared prosperity.”

“Ultimately, the success of ASEAN regional integration will depend on how it affects the labor market, and therefore on how it improves the quality of life of 600 million women and men in the region,” Dasgupta said. 


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