Towards an Asia-Pacific Integrated Market: Migration, Tourism and Air

Connectivity

Saman Kelegama Institute of Policy Studies of Sri Lanka

Presentation to the Second Meeting of the Working Group on Formation of an Integrated Market in Asia and Pacific,

UNESCAP, Bangkok, 26-27 March 2015

Migration Scenario in Asia Pacific

• Asia Pacific (AP) is a home over 30 million migrants and available data shows that intra-regional migration is increasing, and in this context some countries are migrant recipients while others are suppliers

• The full potential of migration is not taking place in the AP region due to the migration related problems such as irregular migration, influx of refugees, underutilized migrants, exploitation of migrants, etc.

Key Impediments for Intra-Regional Migration

• Legal frameworks governing migration do not match the demand and supply of migrant labour –large number of irregular migrants in the AP region

• High demand for low skill migrants curbed in many AP countries due to political sensitivities, language problems, etc. and in some AP countries highly skilled migrants remained under-utilized and shortages exist in high skilled sectors

• Labour standards and protection of the rights of migrants are far from satisfactory due to low ratification of migrants related labour laws in AP countries

Closing the Gap on Limited Legal Opportunities

• Implementing a Employment Permit System as in Korea where temporary low skill migrants have to return to their country of origin after the expiration of the contract

• Mainstream migration to the overall development strategy of the individual AP countries: remittances, skill gaps in human resources, etc., can be build into the mainstreaming

Closing the Gap on the Skill Mismatch

• Lack of disaggregated data on migration (e.g., students, family reunion, etc.) and on domestic skill shortages constraints detailed policy analysis

• Data problem complicated by different definitions used by various countries for immigrants -- the lack of a common definition is also a problem

• Many countries have use graduated overseas students to address the skill shortages at the higher levels (e.g., IT Indian graduates in the US market)

Enhancing Student Migration

• Migration for human development seen as a stepping stone for labour migration

• Intra-regional student flow is high in the AP region– 93% in Japan, 94% in Korea, 92% in Malaysia, 81% in Australia, 67% in New Zealand, and so on

• Japan has a five pillar strategy to attract students from the AP region (300,000 students by 2020; globalization of Japanese Universities, recruiting international academic staff, enrollment facilitation, support for job seeking after studies, etc.)

• Student migration is a major foreign exchange earner for some AP countries

• Migrant students work part time and some countries have mechanisms to absorb international students into the labour force at the higher skill levels

Closing Higher Skill Gaps via Student Migration

• Student recipient countries in the AP should note that students migrate for better quality education and where costs are significantly cheaper that US and EU

• AP weak in student exchange programmes, summer courses, curtailing discrimination against foreign students, internationalization of Faculties, etc.)

• There is much scope for further promoting student migration within the region and using qualified migrant students to close the high skill gaps

Closing the Low Skill Gap via Bilateral Agreements

• Malaysia has encountered labour shortages and depends on foreign labour for low skilled jobs

• Malaysia has 1.8 million Nepali workers mainly in small restaurants, hotels, factories, and industries and they are working under harsh conditions exploited both by Malaysian employers and Nepali recruitment agencies

• Malaysia has close to 500,000 Bangladeshi workers mainly in the construction sector (one fifth of the construction labour force) and this recruitment is based on a Manpower Export MOU signed with Bangladesh in 1992 and there are less complaints about working condition and rights

• Bilateral agreements can assist for migrant workers at low skill levels

Closing the Gap on Labour Standards

• Declarations on safeguarding the rights of migrants takes time to come into effect and when in effect have implementation issues (e.g., ASEAN Declaration and Protocol and the Promotion of Rights of Migrant Workers)

• Non-binding regional consultative processes among migrant origin countries are also not very effective in safeguarding the rights of the migrants(e.g., Colombo Process)

• Until a regional framework in worked out, there are measures that can be considered: e.g., Trade Union collaboration between countries of origin and destination (e.g, Nepali Trade Union – GEFONT- and Korean Confederation of Trade Union, Malaysian Timber Trade Union, etc.) to protect the migrant workers

• In the context of low ratification of international conventions on migration in the AP region, more bilateral, subregional, and regional regulation and protection of the migrant workers can be considered

Closing the Gap: Regional Framework

• There is some degree of bilateral, bilateral-plus, sub-regional cooperation on migration in the AP region

• Broader trans-regional frameworks like Colombo Process where some members of the AP region are included also focus on migration issues

• No forum in the AP to discuss migration issues for the entire region other than the Asia Pacific Consultation of Refugees and Displaced Persons

• There is a need to establish an Asia-Pacific Migration Forum to address intra-regional migration related issues

AP Tourism Scenario

• Growing evidence of increasing intra-regional tourist flows: Japan – 78%, Korea – 30%, Taiwan – 32%, China – 11%, Hong Kong -11%, etc.

• There are number of organizations to promote intra-regional tourism: PATA, APTA, APEC Tourism Forum

• ASEAN Economic Community working towards common visa for non-ASEAN nationals to boost tourism

Tourism Promotional Measures

• Tourism development Triangles are in operation ( Singapore-Johor-Riau, Indonesia-Malaysia-Thailand, Cambodia-Laos-Vietnam, Cambodia-Laos-Thailand)

• Tourism services liberalization to some degree has taken place in ASEAN and PICTA (liberalization of tour operators, travel guides, travel services, etc.)

• Visa facilitation for tourist promotion prevails in some countries (20% of the world population does not require a visa, 19% can obtain visa at arrival, and 7% could use e-visa)

Visa Facilitation

WTTC and UNWTO identified the following areas for improving visa issuance:

• Improve delivery of information

• Facilitate current processes

• Provide differential treatment for key market segments

• Implement eVisa programmes

• Establish regional agreements

Visa Arrangements in AP

• Thailand and Cambodia agreed for visa free entry in 2007,however implemented got delayed due to security reasons

• Thailand has signed a letter of intent with Indonesia and Philippines for digital, paperless SMART visa for enter the country

• How meaningful these arrangements would be in the context of the AEC is yet to be seen

• Korea & China: Korea’s Jehu island made a visa waiver for Chinese tourists -- consequently there was a huge wave of Chinese tourist arrivals so much so it became the most popular tourist destination for Chinese tourists

• APEC Business Travel Card simplifies entries to card holders

Tourism-Aviation Nexus

• In the modern world with increasing income and information, global travel for leisure has increased and in this context quick air connectivity plays a vital role

• Besides connectivity, frequency of travel, reliability of flights, advances in aircraft design, etc., play a vital role in air travel

• Tourism will flow to places with better and reliable air connectivity

Aviation Liberalization

• Era of national carrier and state-owned airport is gradually coming to an end

• Bilateral Air Service Agreements ( stipulating: airport, frequency limits, capacity of the carrier, airline pricing, beyond services, foreign ownership of aircraft, etc.) are gradually challenged

• Liberalization of air services (LAS) and going beyond bilateralism are the current trends

• Based on the success in US (1992), EU (1987-1993) and others like India-UK ASA of 2004, air service liberalization is now on the agenda of many countries

• Since LAS is not included under GATS, it requires separate attention

AP: Trans-Tasman Single Aviation Market (SAM)

• Initiated in 1996 and coming into operation in 2002, and Trans-Tasman proved to be a successful liberalization of aviation services

• Provision of allowing airlines of either country to operate domestic flights within the other country

• Trans-Tasman market was a breeding ground for competitive air services by carriers in bilateral agreement and others

• Qatar, New Zealand airways, etc., benefitted and the Agreement changed the dynamics of Trans-Tasman aviation market

AP: ASEAN Open Skies

• ASEAN SAM came into effect on 01 January 2015

• It will not only promote intra-regional tourism but also international tourism flows

• Existing regional value chains will benefit from the increase in connectivity

• Regulatory framework will determine capacity, frequency of flights, etc.

Budget Airlines

• Became popular 10 to 15 years ago in EU

• Grown rapidly from 5% global passengers in 2001 to 26% in 2011

• Budget airlines have compelled tourist seeking countries to open up air space

• Local airports in origin and destination can be used due to the availability of budget airlines

AP – Budget Airlines

• Thai and Malaysian Airlines dominated Thailand -Malaysian markets for many years

• With the entry of Air Asia to the Malaysian market in 2004 tourism in both countries received a boost in 2005 – 1.3 million travelled between the two countries and 370,000 travelled in Air Asia which captured 37% of the market

• Air Asia between Singapore and Kuala Lampur had to fly to Senai in Johor, and not to the Changi airport in Singpore; in 2008 air space was opened to Air Asia, Tiger Air and Jetstar Asia

• As a result, there has been a 28% increase in aircraft movement between the two cities

• Air Asia embarked on joint ventures with airlines in Thailand, Indonesia, Philippines, and India to enhance air connectivity

Policies for Closing the Gap on Tourism

• Tourism development triangles should be converted into tourist circuits

• Circuits can be developed across countries with cross border cooperation – may look at the Central American model

• AP institutions involved in tourism should engage in sub-regional as well as regional tourism promotion in other AP countries

• APEC Business Travel Card Scheme may be extended to medical tourists, students, etc.

• Air services liberalization and going beyond bilateralism will not only improve connectivity but also reduce cost of travel by inducing competition and budget airlines

• Thank you