Executive summary

Migration has always been a powerful engine of prosperity for individuals and the countries between which they move, filling key gaps in labour markets in destination countries and channelling vital financial resources to origin countries through remittance flows. Migration dynamics are subject to continual shifts, driven by relative economic performance of countries, technological change and demographic transition. Ageing populations and rising educational attainment lead populations in destination economies to desire higher-paid roles, while higher-wage migration is required in Asia to fill labour market gaps. The combination of migration’s essentiality to origin and destination countries and its changing flows require all stakeholders, including governments, employers and workers, to continually monitor and respond to new opportunities and risks. Low-wage migrants are vulnerable to multiple forms of exploitation which may worsen over time as they move to different locations or access new segments of the labour market.

This report explores how low-wage international labour migration in Asia1 has changed over the last two decades, identifies the drivers behind these changes, and analyses how risks and vulnerabilities faced by migrants have evolved in parallel. Based on current economic, social, political and technological trends, it then looks at how migration dynamics in the region may evolve over the coming years and decades, and considers the steps needed to maximize the benefits and mitigate the risks of this critical but often dangerous journey. Key findings from this report are as follows:

• Labour migration has proven essential for both migrants and countries of origin and destination in Asia. Data shows that migrants are contributing to economically vital sectors including agriculture, construction and domestic work, in jobs that nationals commonly eschew. Moreover, remittance flows have become economic lifelines for a number of South and South-East Asian economies including India, Nepal and the Philippines. But migrant workers are continually faced with risks including: exploitation, financial and otherwise; excessive financial debt as a result of migration costs and recruitment fees; xenophobia; and maltreatment. Many of these risks have been 1 Throughout this report, references to Asia include South-East Asia, South Asia, East Asia and the Middle East. For the purposes of this analysis, we are excluding the Central Asia region. Spotlight on labour migration in Asia | A factor analysis study 5 exacerbated by the COVID-19 pandemic, which has highlighted the poor living conditions of migrants and their lack of access to health and social services, resulting in increased levels of infection in migrant worker accommodation, especially in the Gulf Cooperation Council (GCC) region and Singapore.2

• Labour migration is set to shift increasingly towards intraregional flows and away from the GCC. The economic outperformance of Asia, especially South-East Asian economies including Malaysia, Singapore and Thailand, is one cause of shifting migration patterns. There has also been a slowdown in flows to the Gulf, as a consequence of reduced government spending due to lower oil prices; the adoption of new technology which improves labour productivity and, in turn, reduces the number of required workers; a growing focus on increasing employment of nationals in some Gulf States; and labour governance challenges, indicating a likely growth in intraregional migration in the years ahead. However, oil-rich Gulf governments are also undergoing economic transformations to diversify their economies away from fossil fuel-based industries and grow other domestic sectors such as tourism and renewable energies, resulting in greater job opportunities in the Middle East for migrant workers with varying skill sets – namely those with softer and more specialized skills. Strong economic performance in historical countries of origin like Indonesia and Viet Nam may also reduce income divergences that drive outward migration.

• Technology will reshape labour markets, and have complex impacts on migration decisions. Technological change, while non-linear, is set to have powerful impacts on the future of work that are both positive and negative. It will, for instance, reduce human exposure to more dangerous types of work, while simultaneously reducing demand for human labour and therefore job opportunities. Automation will advance faster in process-oriented sectors like manufacturing and services, with other labour sectors such as construction and domestic work among the less vulnerable. Technological innovation will also tackle demographic challenges, as with the rise of robotics in the care economy for countries with larger elderly populations. Advances in digital platforms, the “on-demand” economy, e-commerce and gig work are a second important technological trend. These could provide more domestic income opportunities in home markets and reduce the appeal of migration, especially in more dangerous and physically demanding sectors like construction – although such sectors also require strong regulation and oversight to ensure that fairness, transparency and labour standards are adhered to.

• Governments in the region have taken important steps to improve migration governance, but more will be needed in the years ahead. Key policy improvements include moving towards a “whole-of-government” approach to migration policy development and implementation that links migration dynamics across all relevant institutions of government, including health, security and border management. The pandemic has shown the need for governments to improve their focus on living conditions and emergency welfare responsibilities relating to migrants. More specific improvements include: 2 www.ihrb.org/focus-areas/migrant-workers/covid19-migrant-workers-overview. Spotlight on labour migration in Asia | A factor analysis study 6 reducing or eliminating recruitment fees; simplifying formal migration processes to reduce the appeal of irregular channels; regularizing undocumented workers; more comprehensive and inclusive social protection schemes; and working proactively with business, especially small-and medium-sized enterprises (SMEs), to improve awareness about and actions in support of migrant workers.

• Businesses have stepped up their engagement with low-wage migrant protection in recent years, but will need to shift to a more holistic and proactive perspective, with smaller companies needing to increase their engagement. Multinational companies, especially those with long and complex supply chains involving low-income regions, in industries such as garment manufacturing and technology have increased their engagement with migrant welfare due to regulatory pressure and consumer activism. Going forward, this needs to include more sectors and focus on issues such as skills development and integration. Companies need to move towards more proactive investigation into migrant worker welfare in their extended supply chains. The SME sector is considered to be a weaker performer in migrant welfare, as consumer pressure, regulatory scrutiny and supply chain auditing are less likely to act as a pressure for action.

Introduction

Migration is a powerful engine of prosperity for individuals and the countries between which they move. Remittances boost economies and spending power in origin countries, with an estimated USD702bn channelled across countries in 2020 (falling from USD719bn in 2019), accounting for a large share of economies, such as Nepal (23.5%), Pakistan (9.9%), the Philippines (9.6%) and Bangladesh (6.6%).3 Migration can also boost the transfer of skills and knowledge as well as the networks of migrants.

Safe, orderly and regular migration can significantly boost economic dynamism by filling critical labour market gaps. Growth rates in the Association of South-East Asian Nations (ASEAN) could increase by 7.1 per cent by 2025 if members take supportive measures such as improving labour market information, providing language and skills training, simplifying administrative requirements, and expanding Mutual Recognition Agreements (MRAs) to include semi-skilled workers.4

Labour migration can enable individuals to find gainful employment. One review of a migration initiative, in which the Government of Bangladesh allocated migration opportunities in Malaysia and managed the associated recruitment, found a 200 per cent increase in migrant income and a 22 per cent rise in household per capita consumption.5 There are clear benefits to destination countries too. A 10 percent increase in the number of “low-skilled” migrant workers in Malaysia could contribute to growth in the country’s GDP of 1.1 per cent, as well as increase wages and create employment for Malaysians.6 In Singapore, industry groups warned that a reduction in the numbers of migrant workers in early 2020 would have negative implications for the economy, with ripple effects for many Singaporeans.7

Yet migration, when not properly regulated, and especially among migrant workers, brings risks and challenges such as poor and unsafe working conditions, exploitation and human rights abuses, requiring stakeholders, governments, the private sector and civil society – to work together to achieve orderly and safe migration flows, especially for vulnerable groups. This is particularly pertinent in light of the COVID-19 pandemic. The crisis has shown migrant workers to be among the most vulnerable in society, having often been the first to lose their employment and social protections, as well as facing a marked increase in stigmatization and marginalization.8 This study, produced by Economist Impact with support by the International Organization for Migration (IOM) in the context of the IOM-led Corporate Responsibility in Eliminating Slavery and Trafficking (CREST) initiative,9 explores past, current and future trends of labour migration in Asia, with a focus on regular labour migration. While there are many diverse factors driving labour migration in Asia, this report will focus on select priority drivers in the region, shortlisted from a pool of relevant factors based on expert stakeholder engagement.

The report draws on an in-depth analysis of migration and labour migration data, an expert interview programme, and an extensive review of current evidence on migration and labour market trends at the national, regional and global levels. The report is structured as follows. Section one explains the changing nature of labour migration in Asia in origin and destination countries – both the shifts and the factors driving them, as well as the key corridors and sectors. Section two analyses evolving labour migration drivers, and section three explains the key vulnerabilities facing migrants today. Finally, section four outlines best practices and policies for the future. 8 https://crest.iom.int/news/turning-page-our-plans-support-protection-migrant-workers-2021. 9 https://crest.iom.int/. 10 https://publications.iom.int/books/international-migration-law-ndeg34-glossary-migration. 11 Ibid. 12 Ibid. 13 Ibid. 14 www.ohchr.org/en/professionalinterest/pages/cmw.aspx. KEYWORDS AND DEFINITIONS Migration is defined as the movement of persons away from their place of usual residence, eith

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1 Throughout this report, references to Asia include South-East Asia, South Asia, East Asia and the Middle East. For the purposes of this analysis, we are excluding the Central Asia region.

2 www.ihrb.org/focus-areas/migrant-workers/covid19-migrant-workers-overview.

3 www.worldbank.org/en/topic/migrationremittancesdiasporaissues/brief/migration-remittances-data.

4 www.weforum.org/agenda/2019/02/migration-in-asia-where-is-everybody-going.

5 https://openknowledge.worldbank.org/bitstream/handle/10986/33408/Returns-to-Low-Skilled-International-Migration-Evidence-from-the-BangladeshMalaysia-Migration-Lottery-Program.pdf?sequence=1&isAllowed=y.

6 https://blogs.worldbank.org/eastasiapacific/immigrant-labor-can-it-help-malaysia-s-economic-development#:~:text=Economic%20studies%20show%20 that%20a,increase%20wages%20for%20most%20Malaysians.

7 www.channelnewsasia.com/news/singapore/reducing-migrant-worker-affect-singapore-economy-higher-costs-12774646.