September 20, 2014
– Labor is one of the five aspects which are allowed free flow among member nations when the ASEAN Economic Community (AEC) takes shape. Then Vietnam’s labor market is expected to experience drastic changes. Yoshiteru Uramoto, regional director of the International Labor Organization (ILO) Regional Office for Asia and the Pacific, has forecast that the demand for workers commanding average skills will post the highest growth, some 28% by 2025. The following article tackles some of the problems which may arise from the view point of Uramoto.
According to Yoshiteru Uramoto, policies formulated by the ASEAN Economic Community (AEC) may considerably benefit Vietnam as foreign trade accounts for a big proportion of the local economy.
“Our computation shows that by 2025, the AEC is to promote the Vietnamese economy’s growth by 14.5% and create 10.5% of new job opportunities,” said Uramoto. “Such industries as construction, transport, textile-garment and food processing may generate the highest growth rates.”
ILO reports have also indicated that during 2010-2025, the demand for jobs requiring average skills in general will post the highest growth rate, at 28%. However, these job opportunities can be seized only by those local workers demonstrating optimal skills and experience.
Uramoto contended that Vietnam should be well-prepared for the process as her labor productivity remains low. “Vietnam’s productivity is somewhat higher than that of Cambodia and Laos, but is lower than in other ASEAN members.”
In his opinion, skill development and improvement of vocational training quality are essential to raise labor productivity in Vietnam and help the local work force better prepared for the AEC integration. However, Uramoto warned that the work force is not able to improve its productivity on its own. Such a process requires government’s effort to upgrade infrastructure and the business circle’s investment in modernization of equipment and machinery.
“If Vietnam manages to fulfill those tasks, her labor productivity may double in 2025 compared with 2010,” said the ILO regional chief.
Mutual Recognition Arrangements (MRA)
To facilitate the free flow of labor among ASEAN member countries, the signatories have to sign the Mutual Recognition Arrangement (MRA). Yet this is a formidable challenge.
Uramoto said so far the MRA has been completed for eight professions; namely accountants, architects, dentists, engineers, medical doctors, nurses and midwives, topographers and those who work in the tourism sector.
However, he cautioned, an implementation of these arrangements require a heap of work has to be done because of the following reasons.
First, training and testing for professional certification vary extensively in different countries whose professional organizations often are very conservative in changing existing standards or recognizing potential competitors from abroad. What’s more, in several countries, some professions must acquire certification while it is not the case in others.
Secondly, in some nations, to fill in several vacancies such as teachers, lawyers, civil servants or military personnel, applicants must be nationals. Visiting labor is therefore out of the question.
Thirdly, cultural and language differences as well as social recognition have unwittingly formed invisible barriers to the free labor flow, which cannot be put under control even by the law.
However, Uramoto argued that the MRAs may pave the way for the free flow of labor within ASEAN as they specify skills or experience in professions to be met by applicants who want to work abroad.
To promote the implementation of the arrangement, ASEAN members are building the ASEAN Qualifications Reference Framework (AQRF) which deals with certificates granted by members and provides appropriate common benchmarks for national frameworks. The AQRF is scheduled to be finalized this year.
Serious problems are expected when the massive flow of labor within ASEAN occurs following the AEC. When asked how authorities would react to cope with these issues, Uramoto said AEC’s rules allow a free flow of skilled labor. However, the free flow is currently applicable only to the eight professions mentioned above. “And these eight occupations account for less than 1% of the total labor force,” he said. “Thus AEC’s effect on the free flow of skilled labor may not be as far-reaching as has been thought.”
In fact, workers with low and average skills may not be profoundly affected by AEC, said Uramoto. He anticipated nonetheless that the outflow of these categories of workers will intensify. Relevant authorities of each member country should ensure that those workers are treated fairly at their workplace and, at the same time, should promote official recognition of workers by both their respective countries and in other nations.
Vietnam’s preparations
To optimize chances to be provided by AEC, Vietnam has plenty of work to do. Uramoto said focus should be placed on the following issues.
First, in addition to a better control of migrant workers and skill recognition, Vietnam should improve the quality and productivity of her industrial work force. The country should as well spare no attempt to support her textile and garment industry while maintaining her assistance for other emerging industries.
Secondly, said Uramoto, as AEC is to create higher labor demand in several sectors while diminishing that in some other industries, the expansion of unemployment insurance on a national scale will help protect those who are on the receiving end of the process, and, at the same time, will spur the labor shift to other sectors which have better productivity.
Third, the quality of secondary education and vocational training must be ameliorated to ensure that the Vietnamese work force can acquire necessary skills meeting the private sector’s expectations.
Finally, according to Uramoto, to facilitate industrial expansion and build a stable business environment, Vietnam should promote her collective bargaining system. Such a promotion will help improve labor relationship and ensure that benefits reaped from the AEC integration will eventually provide the Vietnamese work force with better jobs.
(By Thuy Dung)