How will the ASEAN Economic Community impact Cambodia?

The end of 2015 is set to be the launch of the new single market in Southeast Asia, otherwise known as the ASEAN Economic Community (AEC). Ten countries in the region, including Cambodia, are expected to benefit from “the free flow of goods, services, investments, and skilled labor, and the freer movement of capital across the region.” (Nay Pyi Taw Declaration, May 2014)

But with the construction of the Greater Mekong Sub-Region’s special economic zones also coming to a close in the next twelve months, what are the implications for migration in the area, and how will this affect Cambodia?

Is Cambodia ready for the AEC?

The AEC is predicted to increase Cambodia’s real GDP by 4.4 %, its exports by 5.3 % and private investment by 24.8 %.

However, poor infrastructure in road, rail, ports, as well as the limitations of the local electricity supply and telecommunications pose practical problems, according to Hing Vutha’s report ‘Cambodia’s Preparedness for ASEAN Economic Community 2015 and Beyond.’ Bureaucratic and logistical costs currently make the export procedure in Cambodia lengthy and expensive.

Cambodia may also lag behind others in terms of education and skill, due to the low literacy rate (73.9% 2012) and the majority of workers still educated only to primary school level. Many may not be able to compete with other countries like Singapore and Malaysia in a single jobs market.

Movement of skilled and unskilled workers

According to the ARTNeT policy brief on ‘Moving Freely? Labour Mobility in ASEAN’, Mutual Recognition Agreements (MRAs) will ensure standard qualifications are recognised in professions like accountancy and medicine across ASEAN, alongside the development of the ASEAN Qualification Framework. However, there is nothing in place for unskilled workers.

“By limiting substantial co-operation on labour market access to high-skilled labour, ASEAN members are missing out on the opportunities and positive developmental impacts from facilitating well-managed migration.”

Helen Sworn on 'Preventing Slavery & Trafficking in Persons in ASEAN', Bali

Helen Sworn on 'Preventing Slavery & Trafficking in Persons in ASEAN', Bali

AEC’s agreements The Movement of Natural Persons (2012) and the ASEAN Comprehensive Investment Agreement (ACIA) are inherently selective, the first created with businesses sending personnel overseas temporarily in mind, and the second applying only to those who are employed with a registered company. These do not include unskilled labour or people simply seeking employment or citizenship elsewhere, one of several points where the AEC differs from the Europe Union. The Asian Development Bank’s (ADB) plans to facilitate trade between the six GMS countries (Cambodia, Vietnam, China, Laos, Malaysia and Thailand) are also gathering steam this year. 

Speaking on the subject earlier this month at the 8th Summer Institute in International Humanitarian Law and Human Rights in Bali, Indonesia, Chab Dai’s Helen Sworn has warned on the implications of Cambodia’s position in the midst of two new economic corridors that will essentially link China and India via Southeast Asia. ADB estimated back in 2004 that half a million trucks will travel through the region per day, which will increase the spread of diseases like HIV/AIDs as well as the risk of unsafe migration. Source communities will have fewer prospects and access to education as people move to economically stronger countries, with children left behind as parents migrate for work.

Human rights NGOs like Adhoc and NGOCRC have also warned that the ASEAN integration will lead to greater numbers of children in particular being trafficked or abused. Reported in Voice of America, Ya Navuth, head of the NGO Caram said:

“Children could also face more risk from economic pulls, experts warn. That includes families sending their children to work in other countries, where they will be vulnerable to abuse.”

How can Cambodia respond to the ASEAN and GMS changes?

Hing Vutha, speaking at the Chab Dai member meeting in May
The Migration Policy Institute report on ‘A ‘Freer’ Flow of Skilled Labour within ASEAN: Aspirations, Opportunities, and Challenges in 2015 and Beyond’ recommends ‘temporary schemes’ to expand the market access for low-skilled labours, creating legal channels to reduce irregular migration and ensuring sending countries be involved in monitoring the candidates before they emigrate.

Hing Vutha meanwhile, brings the emphasis back to education:

“Improving the education system should be the prime policy focus…Cambodia can benefit from the AEC since it can continue to import skilled labour from other ASEAN countries to tide it over this period of skills shortage. But over the longer term, the country should also focus on developing the skills of domestic labour so that it can reduce its dependence on foreign skilled labour.”

Though the ASEAN Convention on Trafficking in Persons and the ASEAN Plan of Action are expected to make positive steps on this issue before the end of the year, it’s clear that we and other organisations fighting to stop human trafficking in the region will need to maintain a coordinated effort to work across border lines, not just within one country.

Blog post written by Laura Gavin. Featured photo of ASEAN flags in Jakarta by Gunawan Kartapranata used under Creative Commons license.