CARI Policy Brief: Greening ASEAN – Paper 4: Review and Recommendations for Future of Work, Equality and Social Justice
By CARI | 3 February 2021
Author: Eleen Ooi Yi Ling | Editor: Aznita Ahmad Pharmy | Webmaster: Nuratiqha Abd Razak | Research Director: Hong Jukhee
With special thanks to Matthias Gelber, Director of Sustainability of Global Sustainability Exchange; Erin Sinogba, Independent Sustainability Consultant; Chris Humphreys, Executive Director of EU-ASEAN Business Council, for providing input.
CARI is pleased to release a new series of policy papers focusing on the sustainability agenda impacting ASEAN. Particularly, by examining the COVID-19 related measures that were released since the pandemic has started. Following the onset of the COVID-19 pandemic, ASEAN countries have come up with stimulus packages focusing on several priority areas covering healthcare, workforce, tax, business, households, education, food security, and priority sectors such as tourism, hospitality, aviation and small/informal businesses.
Paper 4 on the Future of Work, Equality and Social Justice reviews ASEAN countries’ stimulus packages, related policy instruments, statement of commitments, FDI policies, announced inked projects, funding obtained and changes to the legal landscape for areas of opportunities that will lead to a sustainable and green future of work for the region. The paper contains 15 key observations and 14 recommendations which can be implemented as part of ongoing and/or future stimulus packages. The main 6 key findings are as the below.
1) Most short term stimulus packages in ASEAN have little focus on environment and climate-aligned agenda green jobs.
Short term government relief packages in ASEAN focus mainly on alleviating the immediate effects of the pandemic, and include wage subsidy schemes, cash handouts and larger financial support for businesses including SMEs, state-owned enterprises and micro-businesses to replace lost income and to counteract the effects of economic shocks as a result of the pandemic. There are ongoing efforts to create and keep jobs impacted by COVID-19, but none of them green.
2) COVID-19 has worsened income inequality for AMS with weaker fiscal capacity.
- More than half of workers in most ASEAN states work in the informal sector.
- 70% of ASEAN households have had their income negatively impacted.
- The majority of those in vulnerable employment are youths aged between 15-24 years old.
On the whole, social protection coverage (which generally includes social insurance, transfers and labour market programmes) also typically excludes the informal sector, which comprises a large part of many ASEAN economies.
3) The need to adapt work-life to pandemic has led to new work trends in the region while putting more jobs at risk due to the push for automation.
The emergence and the acceleration of technology use have also further driven working arrangements in the region.
- Digitalisation: During the peak of the pandemic in the region, many of the ASEAN workforces moved to teleworking, flexible work arrangements, and short work schemes, driving the rise of the gig economy.
- Automation: COVID-19 is expected to accelerate the automation of the workforce through the use of Artificial Intelligence (AI) and robotics. The ongoing health crisis creates strong incentives to automate with workplaces actively reinventing their operations to minimise health risks to workers and customers.
- New Emerging Jobs: The pandemic has moved society in the direction of contactless commerce, a development that could spur demand in the region for more skilled workers in digital fields. Increased demand for healthcare and related services also lead to job creation for professionals specialising in areas like specialised sanitisation services and mobile healthcare.
4) Imbalance in fiscal policy responses highlights opportunities for intra-regional ASEAN cooperation and solidarity
AMS demonstrates different abilities to match the level of fiscal expansion needed to counter the widespread labour market disruption. Low-income countries are at a disadvantage given their limited fiscal space. Medium-income countries will be able to weather the short term effects of the labour market disruptions, but questions remain as to their ability to sustain this in a prolonged crisis, while high-income countries have more than sufficient resources to address the decrease in working hours of up to 5.4%.
5) RCEP could provide an economic boost amid COVID-19 shock and rising protectionism. Long-term economic benefits to accrue for RCEP’s most externally oriented economies.
Despite not directly addressing workers rights and environmental protection or standards, the RCEP agreement can potentially act as an important catalyst in reviving trade and investment flows, supporting incomes and employment across the region amid a gradual economic recovery. Countries like Cambodia, Laos and Myanmar are expected to see an increase in investment linked to manufacturing once the RCEP agreement is ratified. For manufacturers that involve processes that need careful labour-intensive involvement, such as finishing garments, the unified rules of origin regulations under RCEP will motivate an increase of manufacturing investment as concerns finishing of products, thus affecting the labour demand in the countries involved.
6) Key international green funds are supporting green initiatives in the region, encouraging AMS’s move to increase social protection and look to green initiatives in creating jobs.
Some AMS have gradually moved into the green area or expanded on current projects to tap into international funding for sustainable and environmental development projects.
Key recommendations are highlighted below:
- The need for sustainable solutions leads to job opportunities.
- Investment into green Infrastructures will drive the growth of green jobs.
- Need to facilitate the move to green jobs in reskilling programmes.
- Encourage the growth of social enterprises in climate aligned products and services.
The pandemic has made it a necessity for some of the AMS to develop previously less developed economic sectors in natural resources and to accelerate human development. In the medium to long-term, ASEAN needs to ensure that it solves prevailing issues related to livelihood, income disparity, gender issues and economic growth while taking into account climate-aligned considerations to ensure a resilient and sustainable recovery for the region.