[asia-apec 60] Globalisation: its Impact and Challenges to Labor Migration, Part II

[daga]

Embargoed for Publication
(Final version and permission for use can be requested from the Asian
Migrant Centre <amc at hk.super.net> by 2 September 1996.)

GLOBALISATION: ITS IMPACT AND CHALLENGES TO LABOR MIGRATION, PART II
      
by May-an Villalba
Unlad-Kabayan Migrant Services Foundation, Inc.
Quezon City, Philippines

States are told to adopt policies to smoothly transfer resources from
declining industries to new activities in line with the country's
comparative advantage. (#9 WE) Underdeveloped states are called to face the
chalenge of the wholesale transformation of uncompetitive industrial
structures and against the idea of "inward-development". They are called to
"retrain their workers" provide "geographical mobility grants" (is that
another word for migration?) and do other measures to assure "smooth
transition". (#9WE) On the other hand export oriented development is encour
aged. (#24 WE) Export orientation and liberalization of trade has led to
traditional industries initiated by the people such as handicrafts and food
production to collapse.  The time and skill gap between this loss and
creation of new jobs can take a lifetime. Meanwhile, unemployment grows.  

The ILO concedes that while export oriented policies is desirable, laissez
faire trade is not. And yet it advises against import substitution. This
self-contradictoriness is evident in the globalisation process. While there
may be a need for government intervention to protect infant industries with
genuine comparative advantage, the ILO resolutely advises that export
oriented development is the key to progress. (#21 WE)

In effect ILO is saying that developing countries must play the game of
globalisation for better or worse. Once acquired however globalisation sets
limits to the effectivity of traditional instruments for influencing a
state's level of employment. The state must allow foreign competition to
take place and to challenge protected industries. No longer would it be
possible for example for a state to maintain industries or enterprises that
are "corrupt" and "inefficient".

The best policy according to ILO is for open trade and the attraction of
foreign investments. (#19WE) The foreign variety of enterprise may be less
corrupt and more efficient but are they more humane? Many industries under
TNCs now provide better production but at the cost of the security of
workers. For example, many workers in foreign enterprises and subsidiaries
have become "contractual workers" without job security. Is that a fair
exchange -- more efficient enterprises for job insecurity? Fair for whom?

While the multilateral proponents of globalisation suggest all these
contradictory proposals, it is unable to do its part in the essential
building up of an infrastructure for true globalisation to take place. Some
major areas that have overtime been identifed that require international
attention are the following: the control of transnational corporations
"footloose operations" and against disinvestment; the establishment of
guarantees for the reform of the international monetary system to dampen the
destabilizing effects of speculative financial flows on exchange and
interest rates; fairer terms of trade for the poorer countries; and
safeguards against environmental destruction, etc. (#68 WE)

What can we say except that all these problems are bogged down in the United
Nation's, in the World Bank's, the WTO's own "corruption" and
"inefficiency". For example, the United Nations program for a Code of Ethics
among Transnational Corporations in 1980s was silently abandoned. The reason
given was budgetary limitations. Is that sufficient justification? Or are
the TNCs so powerful they can also influence the budgets of the United Nations?

The agents of globalisation continue to do propaganda arguing that "benefits
far outweigh" the costs of globalisation. This propaganda is carried out
through new information communication technologies and huge media
organisations that are also multinational enterprises. (#16 WE) But the
question remains, is globalisation a bubble that will soon burst? Who is in
control? The ILO suggests that the optimal strategy for developing states is
to reap the gains of higher output and efficiency from globalisation. As for
the negative effects, they are called to deal with them through policy
interventions on national and global level. Globalisation is better than
protectionism, they say. (#7 WE) But for how long will expansion last given
the nature of economic boom and bust cycle?


3. Summary of impact of globalisation

Before going to the phenomena of labor migration let me summarize the social
effects of globalisation. There are two large effects -- segregation of the
North (including NICs) as centers and source of trade, technology and
investments; and the marginallization if not disintegration of economic and
social systems in many countries in the South.

Market economics and Structural Adjustment Programs have been the cause of
the deterioration of many economies in the South. Trade liberalization is
destroying native industries and causing widespread unemployment and poverty.

Structural adjustment programs are depriving the poor of the traditional
protection they received in the form of state subsidies, job security and
access to the local market. Now they must privatize, make unions scarce and
compete with foreign products in the local market. Workers rights are being
curtailed to promote an ideal climate for investment and trade.

South economies are becoming vulnerable to outside competition resulting in
a larger dependence on trade for basic commodities. Whereas states used to
have Food Security, now they are made to rely on foreign sources for basic
goods. Currencies are made to float in the currency market ostensibly to
make Southern goods more competitive in the world market. In effect it is
robbing economies of their means to be self-reliant and independent.

The so-called dispersion of growth to the South is nothing more than the
favoring of a handful of Southern states who have been allowed to benefit
from trade and investment flows from the North. While FDI outflows have
increased yearly by 29% since 1983, expansion has primarily occurred in the
North. Inflows to the South also expanded but their share of FDI declined
from 25% in 1980 to 17% in 1989. (Villalba, 82)

The share of the South is still minimal -- a total of US$30 billion in 1989.
But 75% of these flows went to only 10 developing countries which are mainly
located in Asia.

And yet some stratification between the countries of the South is becoming
evident. In Asia, there has been phenomenal growth in the NICs and near NICs
in East and Southeast Asia -- south Korea, Taiwan, Hong Kong, Singapore,
Thailand and Malaysia. These have created Asia's new urban centers as
against Asia's rural countryside.

One of the features of globalisation is the information revolution that
allows the flow of much more information about the world to more countries.
Television and other communication media are creating a "global village"
enabling the world to see the same news, programs, perspectives, world views
and meanings.

At the same time global media are also showing more people about the
disparaties in the income and opportunity between countries. According to
the ILO, "the richest 20% of the world population produced 84% of the global
GNP while the countries with the poorest 20% account for only 1.4%." (p.4
ILO 96)

The promotion of consumer values through the global media is changing
consumer patterns, tastes for food and diet, for modes of dressing,
transport and other ways of behavior. Globalisation is profoundly changing
the cultures of societies not always with positive consequences.
Homogenization translates into the disintegration of the diverse cultural
identities  of peoples of the world.

4. Impact on labor migration

Labor migration is often one of the unwanted results of globalisation.
However, unlike in the past, today this phenomenon is much more difficult to
control through protectionist immigration rules. The stress on
"liberalization" of the movements of capital and goods, makes it ethically
difficult to set discriminatory barriers against the movement of people.
Globalisation would be a farce if this was so. More importantly there is an
explicit connection between globalisation and migration in that the factors
that create migration are generated by the effects of globalisation.

The number of international migrants today of about 125 million (World Bank
1995:65) compared to some 50 million (IOM figures) in the late 1980s seems
to indicate the growth of population movements. These include refugees,
displaced persons, settlers, professionals as well as contract workers. Of
course, factors such as the famines and wars in Africa, the war in the
Middle East and Yugoslavia as well as the collapse of communism in Eastern
Europe have swelled the numbers of migrants. Though these specific movements
may not be immediately and directly attributable to globalisation they have
been exacerbated by it.

Discounting refugees, settlers and other displaced persons, IOM figures for
migrant workers could reach 25 million. The greatest destination of migrants
are the Gulf and Asia with 10 million; followed by about 4 million each in
Europe and North America; 3 million each in Africa and in Central/South
America. The IOM estimates that 30 million migrants are in irregular
situations -- without legal permission to stay or as illegal workers. (Taran)

Migration in Asia

In sociology we refer to two factors -- the "push" and the "pull factors --
that cause migration.

The "push" factors are those which make people move out from their
communities, countries. The collapse of many economies in the South is a
push factor because economic collapse means people are not able to find
jobs, good wages and social security in their own countries.

The "pull" factors are those which attract people to move to another place.
These are job vacancies, higher wages and more social security. In very poor
countries jobs and wages derived from overseas already create for the
migrants and their families long term social security at home.

"Pull" factors are primary. There can be no movement of labor across borders
especially ones separated by oceans and great distances if there is no
demand for them in the host countries in the first place.

In Asia an estimated 10.375 million migrants worked overseas in 1992. The
main destinations were the Gulf states with about 5,075,851; Malaysia with
1.5 million; Japan 1 million; Singapore .3 million; Taiwan and Hong Kong,
.15 million each; south Korea .1 million; Macau and Brunei .05 million each.
(Living, p.3)

	Trade and investment patterns 

The changes in the Asian labor market during the last three decades result
from national economies in Asia becoming integral parts of the
regional/global economy. The integration is different in many respects from
the effects of the bilateral relations which existed in the colonial and
post colonial period between colonizer and colonized.

Whereas in the colonial period the national economies of Asian countries
were integrated with the economies of their colonial masters, mostly, the
more contemporary national economies are integrated in three or more ways:
they are integrated by the growing influence of Chinese overseas capital; by
the development of Japanese technological leadership; and by the development
of inter-Asian investment and trade within the framework of globalising
market regions.

In the 1990s there is the phenomenal and simultaneous development of the
regional trade and investment block concept as exemplified by the creation
of the Europeran Economic Community (EEC), the North American Free Trade
Area (NAFTA) and the ASEEAN Free Trade Area (AFTA). The impetus of AFTA
still needs to be thoroughly studied. However, there are some distinct
factors which can be mentioned about this development. The first is the need
for Asia to become more competitive vis a vis Europe and North America.  The
second is the growth of overseas Chinese capital moving towards China or
towards Asian countries where ethnic Chinese relations exist or can be
developed. The third is the growing need of Japan to establish a
rationalized Asian technological production base which can maximize
locational advantage in relation to access to resources and markets. 
However, also in the 1990s the world is seeing the development of Asia as a
center of "developing country" investment and trade. The NICs are beginning
to play not only an important role as models of development but also a role
as investing countries within Asia and outside.

As Asian countries develop to the point of becoming foreign investing
countries, they need to rationalize production organisation by making use of
cheaper resource and labor which are available within the region.

With the acceptance of structural adjustment programs by most governments,
there has risen a desire by many countries to liberalize the movement of
capital, commodities, services and technology across borders. There is also
a desire, nay intention to reduce the role of the state in economic affairs
and to enable the market to run its course. The role of the APEC (Asia
Pacific Economic Cooperation) is precisely to hasten this process. 

What we see as APEC is a mechanism to  liberalize trade and investment
without the encumbrances that government-led trade blocks are heir to. It is
ironic, to say the least, that through the APEC process, we are witnessing
the voluntary abdication of responsibilities by governments in favor of the
market.  

	Labor patterns

Industrial development in Asia has brought about many changes in the
structures and patterns of employment and labor. There has been a movement
from an agricultural pattern of employment to an industrial pattern and more
recently to services. The skills level of the labor force has changed as
well from an agri-based skills level to an industry-based skill level and
increasingly towards a services-based skill for developed and the newly
industrializing economies.

The demand pattern for labor has also changed. Technological advances have
enabled companies to relocate certain branches or sectors of production to
cheap labor countries. Thus, labor intensive sectors of garment
manufacturing are moving from Japan and the NICs to cheap labor countries. 

Asian investments integrate Asian labor by bringing together from different
countries under the command of capital from the sending countries, e.g.
workers employed by say Toyota, come under one enterprises whether the
workers are from the Philippines or India or Thailand. Labor migration on
the one hand is integrating labor of sending and receiving countries by
putting foreign and local workers together under the same wage and working
conditions in the host country and exposing indefensible discriminatory wage
and work standards.
   
Small and medium enterprises in the NICs prefer contract labor over local
labor because contract labor demands less long-term social and economic
benefits. They demand no provident funds, social security and medical benefits. 

Changes in the labor structure have also been forthcoming since the NICs
began to post high growth rates. The changes in population composition and
in the labor force have meant that the age structure of the population has
been changing. Japan and the NICs are getting to have an older population,
with people achieving a longer life span and marriages occurring at a later
age. Births are being controlled and nuclear families are shinking. There
are far more women going through tertiary education and willing to do
economic work than in the past. The knowledge and skills level of the
population have also improved relative to the demands of the national economies.

The negative effect of these population changes are several. First, the
retirement age of the population is becoming shorter. There is higher
expectation for social mobility. There is more discrimination about the work
that local populations want to enter into. Fewer local workers are willing
to accept 3D jobs.


Asian Migrant Centre (AMC)
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Tel: (852) 2312 0031 Fax: (852) 2992 0111
Email: amc at hk.super.net