Development Analysis Network - March 2001
Labour Markets in Transitional Economies in Southeast Asia and Thailand
English 246 pp.

Foreword 

The Development Analysis Network (DAN), which formed in 1997, is a network of research institutions in Thailand, and the Southeast Asian Transition Economies (SEATEs), namely Cambodia, Laos and Vietnam. It was set up to conduct comparative research on topics of common interest. The funding for the two initial DAN planning meetings came from the United Nations Development Programme, and it allowed scholars from the concerned countries to meet in order to elaborate a joint research agenda. The International Development Research Centre of Canada has subsequently provided the financial support for the work of DAN and its publications.

The institutions participating in DAN are: the Cambodia Development Resource Institute and the Cambodian Institute for Cooperation and Peace, in Cambodia; the National Statistical Centre and the National Economic Research Institute, in the Lao People’s Democratic Republic; the Central Institute of Economic Management and the Institute of Economics, in Vietnam; and, the Thailand Development Research Institute, in Thailand. The Cambodia Development Resource Institute acts as the network's coordinator.

The first phase of the network’s research was conducted in 1998-99 on the impact of the Asian financial crisis on the SEATEs and Thailand. This was successfully concluded with the organisation of a dissemination Conference in Phnom Penh, in January 1999, and the collected papers were subsequently published as a book.

The second, and present round of DAN research has concentrated on labour markets. The impetus to undertake research on this topic began with the Asian financial crisis that rendered large numbers of people jobless and increased the suffering of the poorer sections of society. In addition to being vulnerable to influences from beyond their borders such as the financial crisis, the transition economies also suffer from structural underdevelopment.

The findings of this second phase of DAN research were disseminated in a Conference held in Laos in December 2000. Since then the papers have been revised and edited, and with this volume, have now been published.

The findings of these studies suggest that labour issues are daunting in all four countries. Problems arise to varying degrees from multiple sources – external shocks, internal political uncertainties and/or economic management, the challenges of poor infrastructure and underdeveloped human capital. Open unemployment is largely not visible in these countries because the poor can scarcely afford to stay jobless and also the agrarian and informal sectors shelter many more persons than what the principles of productive employment would dictate. As a result, levels of underemployment and poverty are high. Interestingly, the more a country is dominated by the agrarian and/or informal sectors and non-tradable activities, the larger are the proportions of its poverty. This implies that integration of labour in these countries into the international division of labour could improve standards of living. The fact that well over a third of the population in Cambodia, Laos and Vietnam subsist below the poverty line, is evidence that insulation is not beneficial.

There is a general realisation that while economic integration and trade can be mutually advantageous, it is more important to address the internal constraints to development in all the four countries. These are political, economic, and technological, as well as social. These studies all bring home the grim reality that if labour issues are left unaddressed, the resulting problems can pose threats to the stability of the region.

We sincerely hope that, like the findings of the first DAN study, the outcome of this phase will also be of interest and of use to policy makers and academics alike.