East Asia and Pacific (EAP) region is at the crossroads of global mobility trends. Rapidly declining birth rates and increasing life expectancies are reshaping the demographic profiles of not just the high-income but also the middle-income countries. Japan is experiencing substantial decline in its labor force while many middle-income countries – such as China and Thailand – now have elderly population shares that are historically observed in high-income countries. While lower-income countries continue to have fertility rates above replacement, this is likely to be shorter-term phenomena and they will experience demographic transition earlier than anticipated. Aging higher-income societies not only lead to shrinking labor forces, but they also create demand for “care services” such as in healthcare.
Coupled with these demographic shifts, continuing income and productivity gaps, and potential impacts of climate change create stronger forces for labor mobility within the region as well as from the region to the rest of the world. Wages in Singapore are, on average, five times higher than in other Association of Southeast Asian (ASEAN) countries. A lower-skilled Cambodian worker can easily triple his real income by working in Thailand or increase it by eight times in Korea. The remittances these workers send back home improve education, healthcare, and entrepreneurship, leading to reduced poverty and stronger development.
Not surprisingly, intra-regional migration in EAP is high. But the most relevant question is not about the number of migrants, but the conditions under which people migrate. For mobility to lead to win-win-win outcomes for the origin and destination economies as well as the migrants, it needs to take place under regular, orderly, and safe conditions. The policy frameworks that govern migration – whether national, bilateral, or regional – should address the needs of the labor markets in both origin and destination countries. Migration should not drain the already scarce human capital and skills in poorer societies. Migration should not lead to increased informality in the destination labor markets, and dislocation and unemployment of their citizens. Migrants should not be exploited, among other issues, by their employers via lower wages and poor working conditions, or by intermediaries who charge exorbitant fees. Their skills and credentials should be formally recognized so they can be employed in occupations commensurate to their human capital. Remittance costs should be lower than what they currently are.
The world, especially EAP region, is at a demographic, economic, and social inflection point. Mobility can be a powerful tool to address many of the challenges that low- and high-income countries jointly face. Efficient and effective policy tools are being designed, implemented, and evaluated in origin, transit, and destination countries continuously. The main emerging lessons are clear and they require policymakers to be innovative and to coordinate their activities within and across their national borders.
