International migration is controversial the world over. In recent times, Brexit and President Trump’s border wall have drawn attention to the perceived costs of migration, in regard to economic, social, and labour market impacts. For migrant- sending (out-migration) countries like Indonesia, the main issues debated in the political domain relate to the costs of migrant ‘exploitation’ and the potential brain drain of skilled workers. Those costs are juxtaposed with benefits individuals and household can receive from better jobs, the flow of remittances, and the application of new skills (brain gain) and capital on return.
Testaverde, Moroz, Hollweg, and Schmillen, all from the World Bank, nail their colours to the mast from the outset: the book is about improving opportunities and overcoming obstacles to migration on fixed-term contracts, by far the most common migration in the region. The context is ASEAN and the coverage is of higher- income, net-receiving countries (Singapore, Malaysia, Thailand, and Brunei), and lower-income, sending countries (Philippines, Indonesia, Vietnam, Cambodia, Lao PDR, and Vietnam) that for the most part export blue collar workers. It deals with mostly unskilled, blue-collar workers (regulated and unregulated) and the much more controlled migration of skilled workers within ASEAN. In recent times, the movement of skilled workers has been one of the policy platforms of the ASEAN Economic Community.
The book makes good use of a quite recently compiled International Labor Migration Statistics Database in ASEAN (2015), itself drawing mainly on the United Nations database, Trends in the International Migrant Stock (2015). The World Bank authors search much further, however, with an impressive literature survey. This covers both international experience in other regional groupings, especially in the European Union, as well as information about government policies (or the lack thereof) in relation to migrant admissions, employment and exit, and the enforcement of these regulations within ASEAN.
The book is divided into two parts, the first dealing with migration and regional integration, and the second with migration policy. The first will probably be of more interest to non-migration specialists. It covers structural change, trade, and investment in ASEAN, from the signing of the ASEAN Framework Agreement on Services (AFAS) in 1995 to the declaration of an ASEAN Economic Community in December 2015.
Two themes are likely to draw the attention of readers interested in Indonesia and labour-exporting countries. First, labour mobility costs (especially payments to labour recruiters) are high across the region. They contribute to sometimes very large wage differentials between the labour importers and exporters, which in turn provide a strong incentive for migration, both regulated and unregulated—and much of this is unregulated in the case of unskilled workers. The authors document the Philippines as a model—though not without blemishes—to demonstrate how other labour exporting countries can reduce costs to migrant workers and improve their welfare. There is considerable discussion of improvements in admission procedures in the Philippines (simplifying and improving recruitment procedures, and reducing information asymmetries), and efforts to reduce the malpractices of recruiters and employers in destination areas. The support of the strong, independent Philippines Overseas Employment Agency (POEA) in these areas and in the post-migration phase is an example of what other countries, including Indonesia, might achieve by assisting migrant workers and their families. The book argues that Indonesia has made some progress on all these fronts but still has a long way to go, especially regarding the implementation of regulations and the cooperation among agencies in Jakarta and among different levels of government.
Also of interest are econometric estimates of how reductions in migration costs can complement trade reform, raise incomes and promote growth. The authors find that reducing labour mobility costs—including reducing restrictions imposed by labour regulations at home—has a strong positive effect when combined with trade liberalisation to ensure that ‘Enhanced trade integration benefits not just a select few but the population as a whole.’ (p. 149). The benefits are greater, moreover, if the costs of mobility of unskilled labour as well as those of skilled workers are reduced. Although benefits and costs vary across countries, the main findings apply broadly across ASEAN, including Indonesia. The book makes a strong case for policy reform rather than quantitative restrictions such as bans on the employment of certain categories of migrant workers. The latter policy has been adopted in Indonesia (and in Myanmar) by phasing out the officially sanctioned deployment of domestic workers, hitherto by far the largest migrant category. It is suggested that the latter can only be achieved at considerable cost to individual workers and families, mostly from poorer regions and households. Many migrants are denied much higher-wage jobs abroad, while others are driven into undocumented employment streams.
The book makes a valiant attempt to capture diversity in migration patterns and policies across ASEAN. To this reviewer’s knowledge, it is the most comprehensive treatment of migration costs and benefits within ASEAN. Nonetheless, the treatment of Indonesia, by far the most populous country in the region, was somewhat piecemeal, with little attempt to examine some of the major sub-national issues, especially migration from the poor regions of eastern Indonesia. Also, the absence of a macroeconomic and economic growth framework to ground the story is a pity. The book is very much an institutional and supply-side story, with scant attention paid to the changing patterns of demand for labour across individual countries and groups of countries, and their effects on migrants and migration flows.
These are not major quibbles, however, and I strongly recommend the book to specialists working on migration, and to generalists working on aspects of globalisation in ASEAN. To ground the study for those interested in Indonesia, the book might be read together with a companion volume published by the World Bank in the same year, Indonesia’s Global Workers: Juggling Opportunities and Risks (Jakarta 2017). The latter is based on surveys of migrant households in 2013–14. It examines the characteristics of Indonesian migrant workers, within and outside ASEAN, and their motivations for taking jobs abroad. The Indonesia book also discusses female domestic workers in detail and offers a range of policy options for greater compliance with regulations and for sustaining the benefits of migration upon return.