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NEW UPDATES Asean Affairs   15  December  2015  

Labour market unfazed by AEC

As ASEAN member states race to get ready for the ASEAN Economic Community (AEC) integration later this month, one of the pillars of the new economic bloc is the free flow of skilled labour across borders, with Cambodian industry experts unperturbed by the possibility of this leading to a skilled labour exodus from the Kingdom.

The new economic community outlines the facilitation of labour migration across ASEAN, thereby increasing the mobility of workers to fill labour shortages in the region, though only in eight selected sectors – engineering, nursing, architecture, dentistry, medicine, tourism, land surveying and accounting.

While the AEC restricts labour migration to skilled workers, Cambodia with its low- to medium-skill workers could see an influx of better qualified workers, which experts say will only benefit the economy in the long run.

Heng Sour, spokesman for the Labor Ministry, said a free flow of labour will not have an immediate impact on January 1, and that the Kingdom could instead benefit from regional skill sharing.

He added that despite concerns about foreign workers coming in and taking jobs away from Cambodians, there are checks and balances in place to control that.

“AEC will have a free flow of labour, but the labour laws in each member state are yet to be changed,” he said. “The old requirement of 10 per cent quota for foreigner workers [in Cambodia] will still remain, as there is no agreement to change it any time soon.”

According to Sour, the new regulations will not open the floodgates for workers to enter the country, and member states can use a clause in the AEC regulations to stop the inflow of migrant workers, if they deem there is no need for such workers or if they want to protect the local labour force.

Sandra D’Amico, managing director of human resources firm HR INC, said that with or without the AEC, the number of Cambodian workers leaving the country will remain the same, with many possibly opting to stay in the country.

She added that workers still have to comply with visa and work permit requirements and the creation of the new economic bloc will not signal a free for all.

“It will be easier to move for sure, but I think as long as Cambodia provides interesting and challenging opportunities, many Cambodians will choose to stay in Cambodia,” she added.

While the AEC will not drastically boost the number of jobs on offer in the region, D’Amico said it will surely increase the competition for these jobs and Cambodians may not exclusively benefit from these opportunities.

“For professionals, you are also competing against other nationals and a much bigger pool of qualified people – so that opportunities presented are not only for Cambodian people, but all people,” she said.

Given that Cambodians are already allowed to work abroad, the implementation of the AEC will not change worker outflows for the Kingdom, but will only formalise the process, said Jayant Menon, economist in the Office for Regional Economic Integration at the Asia Development Bank.

According to a report prepared last month for the International Labour Organization’s Bureau of Employers’ Activities, as many as 300,000 Cambodians migrated overseas for work.

Latest figures from the ILO show that of the 771,000 Cambodian workers in the ASEAN region in 2013, a majority were in Thailand, close to 750,000, with the rest working in Malaysia and Vietnam.

Whereas there were only 32,200 workers from ASEAN states employed in Cambodia, again led by Thailand with 25,400 workers, followed by the Philippines and Singapore.

“I think we shouldn’t get overly concerned about how the AEC’s going to change labour flows,” Menon said.

However, worker inflows, he said, should be viewed as a positive development with a “short-run cost, but a long-run gain”. Labour migration will also result in technology transfers that can be used to create more jobs for Cambodians, according to Menon.

Seang Vathana Tann, an accounting student at CamEd Business School, said that after graduating she would consider working abroad to get better experience and higher pay, but she also knows that the competition for local high-skill jobs will only get tougher.

“There might be more skilled workers coming to Cambodia than skilled workers in Cambodia moving abroad,” she said. “They [foreign workers] will come to occupy the top jobs and it will be hard to compete with them.”



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