ASEAN Economic Community and Thai Labor

The ASEAN Economic Community is coming in 2015. Within the blueprint for the AEC, there is an article called “Free Flow of Labor.” The purpose of this article is to eliminate the barriers of skilled professional workers being employed within the countries of ASEAN. Through a series of negotiations for liberalization over several years, ASEAN nations are to come to an agreement for the recognition of professional qualifications in multiple occupations. Recognition of the professional qualifications means that citizens of ASEAN countries can be employed in each member countries without an employment visa.

Some hope that eliminating the barrier to skilled professional workers will increase the choices available to Thai consumers. Service providers will be more efficient and competitive to ensure an efficient and productive labor market. Professionals will be free to move to where their labor is required thereby increasing their wage scale. Employers will benefit by having a larger pool of skilled labor for employees.

There is also anxiety among some professionals in Thailand that their employment opportunities will fade with increased competition. They believe that Thailand is not ready and that professionals from other countries take their jobs. Professional organizations are increasingly vocal in protecting their members from competition from foreign workers. The truth is that in Thailand, the hopes and fears of increased competition is unfounded.

The ASEAN Economic Community does not allow the free flow of skilled labor or service providers. Only certain professions that ASEAN members have mutually agreed are allowed to work freely across country boundaries. All members of the ASEAN have to sign Mutual Recognition Agreements to jointly recognize professional qualifications of its citizens. There has been difficulty in negotiating the agreements. The agreement set a target of fifty-two professions to be liberalized by 2015 but Mutual Recognition Agreements have only been signed for seven professions: engineers, nurses, physicians, dentist, architects, surveyors, and accountants.

While there can be no impediments to foreigners in the AEC professions, those professional have to abide by local regulations. This means that the individuals are required to pass local licensure and certification laws. In Thailand, all of the AEC professions require licensure. The test for licensure is only available in Thai language. This is a serious impediment to most foreign nationals from being licensed or qualifying as a recognized AEC professional in Thailand.

Thai is a very difficult language for non-natives. Learning to read and write Thai on a professional level is nearly impossible for most people. The language requirement for licensure means that there will not be an influx of ASEAN professionals coming into Thailand. Professional organizations will impede any changes to expand the licensure language to a more international language like English.

However, there is another issue that should put fear in the government of Thailand. English is the official language of ASEAN and it is the language that is used for communication. Thailand’s most skilled and brightest are generally fluent in English and they could be looking for opportunities available in other countries where licensure is available in English. The language restrictions on recognized professions does not prevent Thai professions from attempting to become licensed in a foreign ASEAN country where licensure exams are conducted in English or in countries that accept third country professional licenses.

ASEAN’s liberalization of barriers for skilled labor might create a brain drain for Thailand. Internationally inclined and skilled Thai professionals could leave the country. The best and the brightest Thai nationals who are able to communicate effectively in English may be attracted to working in a foreign country. They benefit from having a larger number of employers to market their skill set. Working in international firms could lead to additional opportunities, higher wages, and benefits for them.

The combination of language restrictions to professionals and the liberalization of skilled labor markets in ASEAN will make Thailand highly uncompetitive in ASEAN for skilled labor. There are multiple options for Thailand. Thailand could keep the status quo and hope that Thai professionals do not leave the country in large amounts. Thailand could opt out of the “free flow of labor” article in ASEAN to prevent Thai professionals from easy employment access to other ASEAN nations. Or Thailand could remove the language restrictions and open up their local markets to increase competition. All of their options have their advantages and disadvantages.

Thailand needs to look into itself. Will Thailand insulate itself from the rest of the world and live in fear that their population is not ready? Or will Thailand open itself up to competition and suffer the initial pains to ensure that its population could compete in the international arena? For the answer, Thailand should look at the economic situation of economically open nations versus the nations that have protectionist policies.

 

Category: ASEAN, Business in Thailand