ASEAN 2015 'losers': Vulnerable sectors

Unless the ASEAN economic integration takes the road of inclusive growth, the vulnerable sectors of society will be left behind.

"Big businesses will swallow up MSMEs [Micro, Small and Medium Enterprises], so kaya po dito sa ASEAN, all ASEAN organs... are encouraged to look at the value chainkung paano po matutulungan itong mga vulnerable sectors of society," Luis Cruz, assistant secretary of the Department of Foreign Affairs' Office of ASEAN Affairs said on Tuesday, March 17.

(Big businesses will swallow up MSMEs, so in ASEAN, all ASEAN organs are encouraged to look at the value chain and see how they can help the vulnerable sectors of society.)

Cruz was speaking at the 33rd anniversary of the Philippine Council for Health Research and Development (PCHRD), where health experts discussed the challenges and opportunities for health research and innovation in view of the upcoming ASEAN economic integration.

By the end of 2015, the ASEAN Economic Community will be established, marking the start of free trade among the organization's 10 member-states allowing free flow of goods and services – health services included. (READ: A united region: The ASEAN Community 2015)

Cruz urged member-countries to focus on the "losers" by providing them assistance in the following: provision of microfinance, research and development, packaging, global marketing, and training.

This is true even in the health sector. (READ: PH 'well situated' to take advantage of ASEAN integration)

"Iyon pong mga malalaking pharmaceutical industries, they know how to move about in ASEAN, ngunit itong magiging losers, ito po ang dapat bigyan ng assistance (The big pharmaceutical industries, they know how to move about in ASEAN, but those who will be losers should be given assistance)," he said.

But Edelina Dela Paz of the Health Action Information Framework said as long as the integration is focused on economic growth, there will really be losers along the way.

"We have to look at the comprehensive overall context of social, economic, political development, and it has to be addressed per country... Trade should not take precedence over health. Trade policy should consider what the impact on health is," she added.

The following, according to Cruz, will challenge health research and innovation in the Philippines during the ASEAN integration:

1. Prevalent existence of tropical infectious diseases (malaria and dengue)
2. Challenges on MDGs (child mortality, maternal health, HIV/AIDS)
3. Knowledge and development gaps among ASEAN member states (human capital, innovation capacity, infrastructure, economic growth)
4. Political-security conflicts
5. Lack of effective regional cooperation and collaboration
6. Investment on research and development

– Rappler.com

A Young ASEAN

DECEMBER this year will be a crucial month as members of the of Association of Southeast Asian Nations (ASEAN) will officially consider themselves as one economic bloc -- by then, without tariff lines amid the free flow investments and skilled labor. But December 2015 is just a beginning, as the route to a full-blown integration is an intricate slow-moving process with economists, businessmen, and political leaders paving and leading the way.

The youth in this region will also play a key role, as second secretary Basriana Basrul of the Indonesian Embassy told this year’s ASEAN Youth Summit in De La Salle University held from Jan. 23 to 25. 

Ms. Basrul noted to her audience, which comprised of around 200 delegates from ASEAN colleges and universities, Rizal’s famous saying of the youth as “fair hope of my motherland.” After all, generations do come and go and it is always the youth who’s next in line at the forefront of nation-building.

Illustration by Samantha Gonzales

ASEAN’S YOUTH 
The youth in the region are in the limelight, as the ASEAN slowly moves toward integration aiming to operate as a single market and production base. 

“The potential of ASEAN is quite large,” Shanaka Jayanath Peiris, International Monetary Fund resident representative to the Philippines, told delegates at the youth summit. 

“It’s a very large place, the third most populous region in the world, and a number of countries have a very high youth population,” he said. 

According to the World Population Prospects report by the United Nations Population Division, Southeast Asia has 597 million people as of 2012. This is third to South Asia and East Asia with their populations of 1.68 billion and 1.59 billion, respectively. 

The ASEAN youth in particular, reach to about 107 million and among the countries that have a relatively young population are Indonesia, the Philippines, and Vietnam with a median age of 26.9, 22.3, and 28.5 years old, respectively. 

“This is important because, for example China and Japan they will age very fast. In the next 20 to 30 years, there will be a shortage of youth -- in a certain sense,” said Mr. Peiris. 

With this demographic backdrop, and “the fact the Philippines and Indonesia have a young population force… [these two countries] are going to be the labor force of the world while the rest of the world will age. ASEAN’s youth will be critical,” he said. 

Population control measures, particularly the one-child policy introduced in the late 1970s, have led to other concerns in China, which has since lowered restrictions in certain provinces. But the damage may have been done, as the policy has resulted in low population growth rates (0.62%), which, in turn, sharply raised China’s median age to 34.6 years old in 2010 from 22.1 years old in 1980. 

Japan, too, has experienced low population growth rates (0.059%) leading to a higher proportion of elderly citizens and a small youth population. Data from the United Nations show that Japan’s youth comprise only 10.1% with the elderly (ages 65 and up) who make up 23%. Japan’s median age is 44.9 -- the oldest in the world. 

Mr. Peiris added that the young population, particularly in the Philippines, is “instrumental” in establishing new production bases and service centers which in turn, will attract new investments, both local and foreign.

“The other countries can gain from lower costs of goods and services from the abundant youth labor force in the Philippines,” Mr. Peiris said. “The relatively lower cost and mobile work force in the country could also work abroad in other ASEAN countries if insufficient high-paying jobs are created in the Philippines.”

George M. Manzano, economist at the University of Asia & the Pacific, said in an e-mail interview that with a free flow of labor, “expect Singapore to attract a lot of skilled professionals from all over ASEAN.”

On the other hand, neighboring countries that are not part of ASEAN, will also be affected since “there will be a potential diversion of employment in favor of the ASEAN nationals in the region.”

FREE FLOW OF LABOR
Among the possible developments that will directly involve the youth once the ASEAN’s integration takes into effect is the free flow of skilled labor.

Under the ASEAN Economic Blueprint, which details the facets and elements of the ASEAN Economic Community, the free flow of skilled laand employment passes for ASEAN professionals and skilled labor who are engaged in cross-border trade and investment related activities.”

Director Dominique Rubia-Tutay of the Bureau of Local Employment explained that with the free flow of skilled labor, “it won’t be uncommon to see, let’s say, a Thai working in an investment company in Indonesia, or a Vietnamese executive chef in a five-star hotel in Myanmar, or a Laotian graphic artist in an animation company in Singapore.”

“With the coming of the ASEAN integration as economies become more connected to each other, employment opportunities are amplified and spread throughout the region,” she also said.

By providing greater employment opportunities, ASEAN’s integration will create a diverse working environment. This, too, will prove essential since “it does not only contribute to increased productivity but also, and more importantly, it greatly adds to the potential for new ideas and innovation which is crucial for achieving an ASEAN powerhouse,” Ms. Rubia-Tutay said. 

Mr. Manzano, said a free flow of labor “will signal which jobs or professions are more attractive.” 
He added that heightened competition for jobs across ASEAN will ensue once integration takes place, and for companies part of the ASEAN, the “search for talent will not be restricted to their own countries. They will have a pick of the best from an ASEAN pool that is much enlarged.”

On the other hand, applicants in ASEAN “will not be limited to their own national firms but could apply to any firm within ASEAN,” Mr. Manzano said.

DEMANDS OF THE LABOR MARKET
Tied along a bigger and fully integrated market is the greater demand for skilled jobs. A joint study by the Asian Development Bank and the International Labor Organization said 14 million employment opportunities will be available for the high-skilled workers, 38 million for medium-skilled, and 12.4 million for the low-skilled, once the ASEAN integration comes into fruition. 

For Ms. Rubia-Tutay, this structural change, seen through the heightened demand for medium-skilled workers, implies that having a diverse skill set for workers is essential, to be effective and efficient amid the ever-changing demands in the labor market. 

Mr. Peiris added that, “the premium of specialized skills could increase, requiring an upward gradation of education and vocational training standards. The youth, labor market and education/training institutions will also have to respond quickly to changing skills demands and patterns in a more integrated economy.” 

Mr. Manzano echoed this view and stressed the importance of the educational sector in each ASEAN country since they will need to be “well equipped to produce the graduates with the skills that are in demand.” 

“The current trend to have mutual recognition agreement is important in order to standardize or harmonize the quality of instruction among ASEAN,” he said. 

Both Mr. Peiris and Ms. Rubia-Tutay lauded the Philippine government’s efforts in response to integration and its resulting broader labor market, by centering mainly on resource development through increased investment in social services, specifically education and training. 

“TESDA (Technical Education and Skills Development Authority) has done a good job training graduates for jobs in the business process outsourcing (BPO) and information technology (IT) space and consideration could be given to extending TESDA-type industry-training linkages to other sectors,” Mr. Peiris said. 

He pointed out that the K to 12 program too “could lay the foundation with a more modern and jobs-oriented curriculum supported by a strong technical and vocal skills program” and added that “tertiary education also has an important role to play by developing more specialized skills including in engineering and technology that could be facilitated by opening up the sector to foreign universities or their branches.” 

Ms. Rubia-Tutay, for her part, said: “Through the K-12 program, bias against technical and vocational courses were removed by integrating skills training and certification at the secondary education level.”

The TESDA established in 1994 aims “to encourage the full participation of and mobilize the industry, labor, local government units and technical-vocational institutions in the skills development of the country’s human resources,” as the agency described in its website.

TESDA’s technical-vocational education and training (TVET) has produced 16.1 million graduates since its inception in 1994. According to data available online, the tourism, health, social and other community development services, as well as maritime and automotive sectors were among the industries with the most number of persons who took assessment and certification.

On the other hand, the K to 12 is also one of the government’s initiatives in preparation for economic integration. The program which covers Kindergarten and 12 years of basic education (six years of primary education, four years of Junior High School, and two years of Senior High School) aims “to provide sufficient time for mastery of concepts and skills, develop lifelong learners, and prepare graduates for tertiary education, middle-level skills development, employment, and entrepreneurship.”

“The strengthened link between the government, the academe, and the industry assures industry-driven policies, standards, and guidelines in the higher education and basic education and training curricula,” Ms. Rubia-Tutay said.

The story originally appeared in the BWorld University Edition's February 19 to March 4 issue. Available in universities around the metro.