THE EMPLOYMENT PROBLEM IN ASEAN COUNTRIES

Abstract

The thesis examines the multi-dimensional employment problems of ASEAN economies through national sectoral employment and labour supply projections. Related issues, policies and programmes of employment creation are then critically examined. The demand projections utilize sectoral employment elasticities or absorption capacities. Chapter 1 introduces the ASEAN economies, focusing on the employment problems of less developed nations. The discussion concentrates on new dimensions of the employment problem, outlining the research framework used. Data sources and research methodology are detailed in Chapter 2 : basic sources of national income and workforce time series are evaluated. Practical methods of forecasting employment, labour supply and national output are also discussed here. Indonesia’s (Chapter 3) imbalances, being corrected by the new political regime, were due to high capital-intensity industrial concentration and very low agricultural productivity. These led to doubling unemployment rates, with marginal labour concentration in the lower output informal sectors. A high-growth diversification strategy must be pursued through modern agricultural technology. Unemployment and underemployment are mainly in Java, necessitating a two-pronged strategy of transmigration to outer islands as well as fertility control. Malaysia’s (Chapter 4) ethnic employment problems led to governmental intervention in reallocating employment to the indigenous Malays. The National Economic Policy successfully reduced Malay unemployment, simultaneously changing ethnic occupational structures. Indians are increasingly unemployed due to estate labour redundancies : the Chinese were half-way. The government, aware of specific (two words not clear) unemployment, promises to alleviate it through perspective development planning. The Philippines (Chapter5) has reorientated its development strategies towards balanced growth. From protected import-substitution, the economy has moved to export-promotion and diversification, emphasizing backward linkages. Rural mobilization and decentralization of ago-industries are some strategies for employment creation. Labour-intensive development and cheaper exports would solve the employment problem. Socio-economic reforms are being pursued by the government. Ever since Singapore (Chapter 6) embarked on industrialization, unemployment and economic growth were inversely correlated-steep unemployment declines matched large GDP increases. Labour-intensive manufacturing, sound labour policies, orderly wages investment climate and political stability helped Singapore’s growth. Labour surplus has been replaced by shortages; immigration of skilled workers is inevitable. Labour-intensive sectors must be phased out by intermediate technology sectors to accommodate labour shortages. For effective labour utilization, the wage-mechanism would reallocate resources, leading to retraining. Whether this manpower strategy is sound in the long-term is debatable but the forces so indicate. The rice monoculture economy of Thailand (Chapter 7) is plagued by severe underemployment or indirect unemployment. Developmental planning has emphasized crops diversification, labour-intensive agro-processing and exports to tap this labour surplus. Trends are favourable to this process, provided labour and land productivity can be increased in the rural areas through agricultural modernization techniques. As a grouping, (Chapter8) ASEAN must increase trade and regional industrial complementation. These would speed the exports momentum for an expanded market with the region. These export-orientated economies will then experience sustained economic and employment growth. Thus, the vulnerability of ASEAN exports outside the grouping will be minimized, due to increased protection in industrial nations. The employment problem is thus a regional issue. Chapter 9 summarizes the conclusions.