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18 February 2013
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AEC is not borderless for some industrial workers

Free flow of labour not a major objective: TDRI researcher

The movement of labour among member nations may not be as unrestricted under the Asean Economic Community as some believe. While some labour groups may gain, some may not, so the job opportunities under the AEC could vary from one industry to another.

Srawooth Paitoonpong, a senior researcher at the Thailand Development Research Institute, said yesterday that the Thai labour market was out of kilter in terms of quantity and quality.

Workers’ job skills do not match up with the needs of employers. The AEC should help absorb some of the surplus labour, since it supports the movement of skilled workers – the upper category, or specialists – without affecting the lower labour category.

In 2008, the Thai labour market had 5.1 million people with diplomas. Only 82,000 workers in this category left the labour force, while 310,000 new workers were produced, resulting in an addition of 230,000 diploma holders per year. Meanwhile about 140,000 workers with undergraduate degrees were produced in 2008, 160,000 in 2009 and 130,000 in 2010. More than 100,000 degree holders were without jobs each year.

However, the AEC blueprint intends mainly to promote free flow in four areas – trade and commerce, services, investment, and capital. The free flow of labour is not the major objective, Srawooth said.

The free movement of skilled labour under the AEC framework consists of two types – trade and services under the Asean Framework Agreement on Services (Afas) including the natural flow of commerce and investment, and the movement of professional-level labour in accordance with mutual recognition arrangements (MRAs).

Afas is the reduction or lifting of restrictive regulations that impede trade and services. There are four types of trade or services – sale of services across the border, a citizen of one country travelling abroad to utilise services in another country, foreign providers entering to set up a business to provide services and foreign workers travelling to provide services in another country.

The vital restriction is that Afas is not applicable to a foreigner entering a country to look for a job or apply for permanent residency or citizenship. Under the AEC, businesses still have to comply with the labour and immigration rules and regulations of the country of designation and can utilise only the agreed services.

Seven professions

The labour movement under Afas is similar to the terms under the General Agreement on Trade in Services of the World Trade Organisation, which has members worldwide. The only difference is that Afas has more than 65 pacts while the GATS has yet to show progress.

MRAs facilitate the movement of professional-level labour, which pertains only to skilled labour with qualifications that meet the standards specified in the MRAs of Asean. Asean member nations have signed MRAs for seven professions – physician, dentist, nurse, engineer, architect, surveyor and accountant.

For the tourism industry, skilled workers must register their profession, or obtain job certification, or pass specific job tests of the host nation. They must obtain a work permit from and comply with the rules and regulations of the host country. In the case of Thailand, the requirement would be previous work experience, such as a minimum of three years for nurses and five years for physicians. This would exclude new graduates.

Job searching under the AEC will depend on planning to reduce the pressure from surplus labour and unemployment. Studies show that skilled labour can work in accordance to both the Afas and MRAs. The focus should be on promoting the export of workers categorised as professional level 8 as per the MRAs.

Srawooth said it was necessary to study the labour market of the target country to prepare manpower in terms of quality and quantity, and to study the labour terms and conditions in the target nation for both MRAs and quality of the professions required. The English-language proficiency of Thai workers is a weakness that needs to be addressed quickly, as well as skills in information technology, he said. Other essential qualities that workers should possess are discipline, human relations, teamwork and diligence.

The movement of labour under Afas depends on trade and investment expansion in Asean. Afas can serve as a vehicle to transport skilled workers abroad to Asean countries.

In general, the AEC should not bring drastic change to the Thai labour market as Thailand and Asean nations have trade and services agreements with non-Asean nations worldwide. However, the AEC offers opportunities for Thailand to send its surplus skilled labour to other Asean countries and generate income for Thailand as well as job opportunities for Thai workers, Srawooth said.


First published in The Nation in 25 January 2013.