Thailand can strengthen its migration policies and systems to support sustained, innovation-driven growth, under its Thailand 4.0 strategy, experts concluded at a presentation of the recent World Bank report, Migrating to Opportunity: Overcoming Barriers to Labor Mobility in Southeast Asia today in Bangkok.
Jointly organized by the Ministry of Labor and the World Bank, and bringing together representatives from government, the private sector, development partners, think tanks, and civil society, the conference focused on the report’s lessons for Thailand. Thailand, Malaysia and Singapore combined are home to 6.5 million ASEAN migrants, or 96 percent of all migrants in ASEAN, and Thailand alone accounts for more than half of all ASEAN migrants. About half of Thailand’s migrants are from Myanmar and most of the rest hail from Lao PDR and Cambodia.
“Labor mobility in ASEAN brings benefits to the citizens of both receiving and sending countries. However, a migration system requires collaboration between not only sending and receiving countries but also stakeholders in order to bring about the greatest gains from labor migration,” said H.E. Police General Adul Sangsingkeo, Minister of Labor.
Migrants contribute significantly to Thailand’s economic development, according to the report. They fill critical skills gaps in sectors and occupations where local Thai workers are not always available. Conference participants noted that effective migration systems can play a critical role in knowledge-based economies, by attracting highly productive, formally employed workers. They can also help improve transparency and predictability, incorporate feedback from employers and other stakeholders, and adjust policies rapidly according to changes in the labor market.
“The World Bank supports reforms that ensure consistency of migration policies and systems with Thailand’s economic needs, Efforts in Thailand to align migration policies and systems with its strategic transformation into a modern, high-knowledge, innovative economy are highly welcome,” said Ulrich Zachau, World Bank Director for Thailand. “Strong, streamlined labor policies and systems to facilitate migration commensurate with labor needs, the increased use of data by decision makers, and lower costs for would-be migrant workers will be key to realizing the vision of Thailand 4.0.”
Recommendations discussed by conference participants include:
- Development of a national migration strategy that clarifies the objectives of immigration policy, particularly pertaining to Thailand 4.0 and the roles and responsibilities across agencies, and synchronizes migration policy with other strategies related to human resources;
- Alignment of migration flows with economic needs, to ensure that overly restrictive quotas or levies do not constrain the positive impact of immigrant labor on economic development. Any existing quotas or levies need to be updated regularly, clearly communicated, and consistently enforced.
- Simplification of administrative procedures related to admission and regularization to help reduce costs and bring more migrants out of the informal system. A database of potential foreign job seekers and local job vacancies between Thailand and its main sending countries will also help.
- Improvement of oversight of recruitment agencies on whom many migrant workers rely heavily as they navigate complex bureaucratic procedures. This will help reduce the costs incurred by migrants following formal procedures.
- Leveraging of the experience of current migrants and enhancement of their skills, by creating employment passes of longer duration to reward workers who are gaining and enhancing their skills set. Training and accreditation programs can also be used to incentivize migrants to maintain regular status.
Vietnam’s Development Strategy for Next Decade Must Put Productivity Growth Front and Center
A productivity-driven development model–combining innovation with balanced development and allocation of private, public, human and natural capital–will be key for Vietnam to achieve its goal of becoming a high-income economy by 2045, a new World Bank report suggests.
The “Vibrant Vietnam: Forging the Foundation of a High-Income Economy” report, launched today, comes as the Government of Vietnam is preparing its socio-economic development strategy for 2021-30 and a socio-economic development plan for 2021-25. The report recommends policy options to help Vietnam to maintain quality growth through more dynamic firms, more efficient infrastructure, skills, and a move toward a greener economy.
“Vietnam is one of the greatest development success stories of our time. The country, however, is now at a turning point where some of its traditional drivers of growth are gradually weakening,” said Ousmane Dione, World Bank Country Director for Vietnam. “To achieve its ambition to become a high-income economy by 2045, Vietnam must put productivity growth front and center of its economic model. In other words, it needs to grow not only faster but also better”.
“Vietnam’s commitment to bold economic reform has been a major contributor to its remarkable economic success,” said H.E. Robyn Mudie, Australian Ambassador to Vietnam. “Australia is proud to have supported this report, which provides clear recommendations on how Vietnam can harness productivity enhancing reforms to improve both the quality and equity of its future economic development”.
Some of the forces that have propelled Vietnam’s growth are now slowing. The country’s demographic dividend is fading, and global trade is declining, while other challenges – such as pollution and the rise of automation, are growing. The ongoing COVID-19 crisis could be an accelerator of these trends.
The reportargues that to thrive in such changing environment, Vietnam needs to strengthen its productive assets, with priority given to four following areas:
Dynamic firms: Encouraging competition and easing firm entry and exit ensures the flow of resources to the most innovative and productive firms. This can only happen in a supportive business environment that ensures access to finance, transparent regulations and legal protections.
Efficient infrastructure: Vietnam has built up a large stock of infrastructure. It now needs to improve the efficiency and sustainability of infrastructure services, including financing, and operations and maintenance.
Skilled workers and opportunities for all: The country scores well on basic education, but it will need to promote university and vocational-technical skills that are becoming even more important for a productivity- led growth model. Those facing barriers entering the labor market, including ethnic minorities, should be provided with greater opportunities—to boost both social equity and economic growth as the population ages and the labor force shrinks.
Green economy: Sustainable development requires more effective management of renewable natural resources such as land, forest and water; stricter pollution controls, including in major urban centers; and mitigation of and adaptation to the inevitable growing impacts of climate change.
The report is a product of the Second Australia – World Bank Group Strategic Partnership in Vietnam (ABP2), with financial contribution from the Korean Global Facility on Growth for Development Trust Fund.
The Covid-19 crisis is causing the biggest fall in global energy investment in history
The Covid-19 pandemic has set in motion the largest drop in global energy investment in history, with spending expected to plunge in every major sector this year – from fossil fuels to renewables and efficiency – the International Energy Agency said in a new report released today.
The unparalleled decline is staggering in both its scale and swiftness, with serious potential implications for energy security and clean energy transitions. At the start of 2020, global energy investment was on track for growth of around 2%, which would have been the largest annual rise in spending in six years. But after the Covid-19 crisis brought large swathes of the world economy to a standstill in a matter of months, global investment is now expected to plummet by 20%, or almost $400 billion, compared with last year, according to the IEA’s World Energy Investment 2020 report.
“The historic plunge in global energy investment is deeply troubling for many reasons,” said Dr Fatih Birol, the IEA’s Executive Director. “It means lost jobs and economic opportunities today, as well as lost energy supply that we might well need tomorrow once the economy recovers. The slowdown in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems.”
The World Energy Investment 2020 report’s assessment of trends so far this year is based on the latest available investment data and announcements by governments and companies as of mid-May, tracking of progress on individual projects, interviews with leading industry figures and investors, and the most recent analysis from across the IEA. The estimates for 2020 then quantify the possible implications for full-year spending, based on assumptions about the duration of lockdowns and the shape of the eventual recovery.
A combination of falling demand, lower prices and a rise in cases of non-payment of bills means that energy revenues going to governments and industry are set to fall by well over $1 trillion in 2020, according to the report. Oil accounts for most of this decline as, for the first time, global consumer spending on oil is set to fall below the amount spent on electricity.
Companies with weakened balance sheets and more uncertain demand outlooks are cutting back on investment while projects are also being hampered by lockdowns and disrupted supply chains. In the longer-term, a post-crisis legacy of higher debt will present lasting risks to investment. This could be particularly detrimental to the outlook in some developing countries, where financing options and the range of investors can be more limited. New analysis in this year’s report highlights that state-owned enterprises account for well over half of energy investments in developing economies.
Global investment in oil and gas is expected to fall by almost one-third in 2020. The shale industry was already under pressure, and investor confidence and access to capital has now dried up: investment in shale is anticipated to fall by 50% in 2020. At the same time, many national oil companies are now desperately short of funding. For oil markets, if investment stays at 2020 levels then this would reduce the previously-expected level of supply in 2025 by almost 9 million barrels a day, creating a clear risk of tighter markets if demand starts to move back towards its pre-crisis trajectory.
Power sector spending is on course to decrease by 10% in 2020, with worrying signals for the development of more secure and sustainable power systems. Renewables investment has been more resilient during the crisis than fossil fuels, but spending on rooftop solar installations by households and businesses has been strongly affected and final investment decisions in the first quarter of 2020 for new utility-scale wind and solar projects fell back to the levels of three years ago. An expected 9% decline in investment in electricity networks this year compounds a large fall in 2019, and spending on important sources of power system flexibility has also stalled, with investment in natural gas plants stagnating and spending on battery storage levelling off.
“Electricity grids have been a vital underpinning of the emergency response to the health crisis – and of economic and social activities that have been able to continue under lockdown,” Dr Birol said. “These networks have to be resilient and smart to ward against future shocks but also to accommodate rising shares of wind and solar power. Today’s investment trends are clear warning signs for future electricity security.”
Energy efficiency, another central pillar of clean energy transitions, is suffering too. Estimated investment in efficiency and end-use applications is set to fall by an estimated 10-15% as vehicle sales and construction activity weaken and spending on more efficient appliances and equipment is dialled back.
The overall share of global energy spending that goes to clean energy technologies – including renewables, efficiency, nuclear and carbon capture, utilisation and storage – has been stuck at around one-third in recent years. In 2020, it will jump towards 40%, but only because fossil fuels are taking such a heavy hit. In absolute terms, it remains far below the levels that would be required to accelerate energy transitions.
“The crisis has brought lower emissions but for all the wrong reasons. If we are to achieve a lasting reduction in global emissions, then we will need to see a rapid increase in clean energy investment,” said Dr Birol. “The response of policy makers – and the extent to which energy and sustainability concerns are integrated into their recovery strategies – will be critical. The IEA’s upcoming World Energy Outlook Special Report on Sustainable Recovery will provide clear recommendations for how governments can quickly create jobs and spur economic activity by building cleaner and more resilient energy systems that will benefit their countries for decades to come.”
The Covid-19 crisis is hurting the coal industry – with investment in coal supply set to fall by one-quarter this year – but does not pose an existential threat. Although decisions to go ahead with new coal-fired plants have come down by more than 80% since 2015, the global coal fleet continues to grow. Based on available data and announced projects, approvals of new coal plants in the first quarter of 2020, mainly in China, were running at twice the rate observed over 2019 as a whole.
More than one in six young people out of work due to COVID-19
More than one in six young people have stopped working since the onset of the COVID-19 pandemic while those who remain employed have seen their working hours cut by 23 per cent, says the International Labour Organization (ILO).
According to the ILO Monitor: COVID-19 and the world of work. 4th edition , youth are being disproportionately affected by the pandemic, and the substantial and rapid increase in youth unemployment seen since February is affecting young women more than young men.
The pandemic is inflicting a triple shock on young people. Not only is it destroying their employment, but it is also disrupting education and training, and placing major obstacles in the way of those seeking to enter the labour market or to move between jobs.
At 13.6 per cent, the youth unemployment rate in 2019 was already higher than for any other group. There were around 267 million young people not in employment, education or training (NEET) worldwide. Those 15-24 year olds who were employed were also more likely to be in forms of work that leave them vulnerable, such as low paid occupations, informal sector work, or as migrant workers.
“The COVID-19 economic crisis is hitting young people – especially women – harder and faster than any other group. If we do not take significant and immediate action to improve their situation, the legacy of the virus could be with us for decades. If their talent and energy is side-lined by a lack of opportunity or skills it will damage all our futures and make it much more difficult to re-build a better, post-COVID economy,” said ILO Director-General, Guy Ryder.
The Monitor calls for urgent, large-scale and targeted policy responses to support youth, including broad-based employment/training guarantee programmes in developed countries, and employment-intensive programmes and guarantees in low- and middle-income economies.
Testing and tracing pays off
The 4th edition of the Monitor also looks at measures to create a safe environment for returning to work. It says that rigorous testing and tracing (TT) of COVID-19 infections, “is strongly related to lower labour market disruption… [and] substantially smaller social disruptions than confinement and lockdown measures.”
In countries with strong testing and tracing, the average fall in working hours is reduced by as much as 50 per cent. There are three reasons for this: TT reduces reliance on strict confinement measures; promotes the public confidence and so encourages consumption and supports employment; and helps minimize operational disruption at the workplace.
In addition, testing and tracing can itself create new jobs, even if temporary, which can be targeted towards youth and other priority groups.
The Monitor highlights the importance of managing data privacy concerns. Cost is also a factor, but the benefit-to-cost ratio of TT is “highly favourable”.
“Creating an employment-rich recovery that also promotes equity and sustainability means getting people and enterprises working again as soon as possible, in safe conditions,” said Ryder. “Testing and tracing can be an important part of the policy package if we are to fight fear, reduce risk and get our economies and societies moving again quickly.”
Loss of working hours
The Monitor also updates the estimate for the decline in working hours in the first and second quarters of 2020, compared with the fourth quarter of 2019. An estimated 4.8 per cent of working hours were lost during Q1 2020 (equivalent to approximately 135 million full-time jobs, assuming a 48-hour working week). This represents a slight upward revision of around 7 million jobs since the third edition of the Monitor. The estimated number of jobs lost in Q2 remain unchanged at 305 million.
From a regional perspective, the Americas (13.1 per cent), and Europe and Central Asia (12.9 per cent) present the largest losses in hours worked in Q2.
The Monitor reiterates its call for immediate and urgent measures to support workers and enterprises along the ILO’s four-pillar strategy: stimulating the economy and employment; supporting enterprises, jobs and incomes; protecting workers in the workplace; relying on social dialogue for solutions.
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