Executive Summary

Summary

One of the most remarkable and beneficial aspects of Asia-Pacific integration in the past half century has been the growing and massive international movement of people on a temporary and permanent basis. Such movements typically have brought tremendous economic benefit to the region.

Through people movements, net destination economies compensate for labour and skill shortages, and may deter industries from moving off-shore to more labour-rich locations. Investment would increase as a result. For net origin economies, individuals are provided with opportunities and income, remittance flows become an enormous source of foreign exchange earnings, and student and trainee movements have facilitated the acquisition of skills. Both net origin and destination economies benefit from circular migration flows involving the acquisition of skills and knowledge in the early career in a foreign economy and its transfer and use in the native economy later in the career. These labour flows enhance regional economic integration.

Private industries also benefit enormously from both highly skilled and lesser skilled flows by being able to maximize productivity through deploying human resources where they are most effective – whether they are highly or lesser skilled workers. At present there is a critical shortage of both skilled and unskilled workers in many APEC economies, and businesses are finding it increasingly difficult not only to find workers but also to deploy talent when and where it is most effective. Economic analysis tells us that in aggregate the benefits of enhanced labour mobility far outweigh adjustment costs and are an essential and crucial element in the Asia-Pacific growth story.

This will continue to be so. Demographic transformations, widening differences in levels of economic and educational development, and continued regionalization and globalization of industry, all suggest that Asia-Pacific economies will almost certainly require even greater international movements of labour in the future. However, in a time of both increased security concerns and economic insecurities, there is a tendency to politicize and restrict border flows, causing tensions and policy incoherence in the region. This will not only be harmful to national economies, but also increase surreptitious and exploitative illegal labour flows.