Labour Markets in Asia: Reforming the Informal Sector and the Platform economy


Bishnu Upreti*
International conference on Universal Social Protection and Labour

For stocktaking, as a researcher I am sharing 5 issues that are needed to achieve social protection as defined in the Global Social Protection Charter (GSPC):

1. Governance issues

  • Increase in security budget in South Asia (e.g., WMD, nuclear weapons, arms trading, etc.) directly affects social protection:,
  • For example:
    • a) Increased defense budget: in 2016 India: $ 55.9 billion, China $ 215.7 billion and Pakistan: $ 9.9 billion (SIPRI 2017)
    • b) India increased defense budget by 9.46% in FY 2015-16 to Rs 2,46,727 crore, which is Rs 23,357 crore more than FY 2014-15 (Kanwal, Indian Defense Review., 28 Feb , 2015)
    • c) investment in space/satellite technology (e.g., in espionage, missiles (Brahmas, Agni, grand plans to build) in India
    • d) Nuclear power expansion: India invests $8 Billion for six nuclear-powered submarines and seven stealth frigates (Diplomat 19 Feb 2015).
  • Many Asian countries (both labour exporting and importing) are facing armed conflicts or civil unrests, political tensions, ethnic and religious radicalization and youth militarization.
  • Governance in some labour recipient countries in Asia are not conducive to achieve social security according to universal social protection framework.
  • Violence against women, poor service delivery and elite capture of state resources are common in the South Asian countries.

2. Demographic issues/challenges will alter the current labour market sphere:

a. Increasing ageing workforce in many countries (e.g., Nepal)
b. Growth of world’s population: 1.6 bn at the beginning of the 20th century will reach 8 billion by 2030, and more than 9 billion in 2050
c. Demographic changes in Islamic countries: dramatic population increase in: Bangladesh, Egypt, Indonesia, Nigeria, Pakistan, and Turkey.
d. Negative population growth in developed countries.
e. SA regional demographic changes: Pakistan may grow to 349 million, up 134 percent in 2050. In Afghans close to 75 million in 2050; India’s population will reach 1.6 billion by 2050): all of them affect labour markets.

3. Asian labour market issues: labour market dynamics is affected by:
a. Political situation of the labour exporting and importing countries: political stability/instability, conflict or peace and government policies, leadership (e.g., emergence of far rightist politicians intolerant to foreign labour force, migrants, etc.)

b. Economic dynamics: big companies moving to cheap labour countries, e.g., Vietnam, China to other SE-Asia countries.

c. Natural calamities (e.g., tsunami of 2004, earthquakes) alter labour market.

d. Challenge for balancing employers’ conditions (higher efficiency and flexibility) and labour’s needs e.g., secure employment, better wage, ensuring social protection).

e. Skills and employability: Skills enhances employability (e.g., nursing or driving) but many Asian labour producing countries have not prioritized this issue. Skill development is shaped by rapid process of globalization, advancement of new technology and changing patterns of work. It takes time for skill development and global markets needs are immediate, there is often a mismatch between skills of available labour force and labour demands for new jobs.

4. Social protection issues/challenges (tension between provisions and actual implementation)

  • On one side, there is debate of ensuring universal social protection (means everyone must have access to all services: basic social security, labour rights, access to universal benefits of health, education, civic services like water, energy, sanitation, public transport, clean air and environment, and basic human needs like shelter, food, clothing. On the other side actual translation of these provisions to action is quite a challenge for many developing countries to guarantee access to all these needs of all labour demands. Nepal’s new Constitution has very ambitious fundamental rights (articles  31 to 48 = 18 articles) but it is quite a challenge to implement)
  • Such a mismatch in the case of Nepal creates tensions and conflict and adds complications in the labour market.
  • Cooperation of private sector: common expectation is that guaranteeing access to these services is a responsibility of the state, but the state alone cannot do much if private sector does not cooperate (e.g., Nepal Government launched a historical contribution-based (by workers and the employers) Social Security Scheme on 27 November 2018 with specific deadline of 18 February 2019 and asked all companies to join but. But out of 900000 companies only 1,620 from the formal private sector have registered (KTM Post of 19 Feb 2019).

5. Geopolitical issues

  • Indo-Pack tension and its effect on regional labour dynamics.
  • Open border between Nepal and India and flow of migrant labour.
  • BRI (OBOR) and China’s strategy of labour mobilization in the region.
  • Europe faces a ‘migration crisis’ (research findings of Allen William and team 2018) and consequent impact on mobility.
  • 2015 Indian blockade and crisis in Nepal led to severe economic crises in Nepal.

6. Conclusions

a. High time for labour market reforms and a need to formalize labour market governance with fair working conditions (decent wages, defined period, working hours, rest and leave, standard social security, freedom of association, right to collective bargaining, preventing labour discrimination, forced labour and child labour, sexual harassment) in each country. Otherwise, conflict and tension in societies is inevitable leading to political instability.

b. Labour reform need to focus on making cooperatives a) owned by employers and employees b) efficient, equitable and fair work conditions requires i) functional regulatory and institutional frameworks, ii) strong and fair labour administration systems, iii) collective interests are framed in transparent agreement;

c. Addressing to achieve the social protection of labour, with well elaborated agreement between the countries exporting and importing labour forces under the framework of Universal Social Protection Charter as a necessary condition,

d. Promoting social protection as per the provisions of the USPC requires governments’ commitments, conducive policies, laws and intuitional arrangements. The following actions will help to achieve social protection:

i. Collaboration between global, regional and national networks for sharing learning and exert positive pressure.
ii. Closely working with national governments and providing them evidence based options and making regular follow up.
iii. Concerted action among academics, researchers, advocacy groups, civil society organizations/actors and political parties.
iv. Regular sharing of experiences, success stories and good practices between all stakeholders including governments.
v. Strengthen research to generate evidence and to address new issues.

e. Developing Countries cannot be developed by supplying labour to other countries because:

i. developing countries require labour force for their own development,
ii. international labour market in Asia (mainly middle-east) is volatile (example is the Arab Spring of Tunisia in late 2010 with a self-immolation of a street vendor and spread almost all over the Arab world);
iii. Among the 4.5 million migrant works of Nepal most of them are in the Arab world and Malaysia but they are not getting standard social protection, not even basic social security, labour rights, access to benefits of health, education, public transport etc.)
iv. European risk assessment about migration is not supportive.

*Bishnu Upreti is a researcher at the Nepal Centre for Contemporary Research