Globalisation compelled labour markets to integrate and converge towards common standards. Preparing professionals on this requires multifaceted strategies, since the labour market has expanded towards international borders, prompting economies to underscore the importance of human resource development as key for competitiveness and mobility. In harnessing the opportunities that ASEAN MRAs bring, there is a need to facilitate the formation of a stronger skill base by underscoring knowledge capital alongside social and human capital.
ASEAN and MRAs
The establishment of the ASEAN Economic Community (AEC) is expected to ease the mobility of professionals in the region. To facilitate regional mobility of professionals, together with Mode 4 (Movement of Natural Persons) of the General Agreement on Trade in Services (GATS), ASEAN Member States (AMS) entered into Mutual Recognition Arrangements (MRAs), which are framework arrangements established to unify differences in standards and qualifications imposed by respective AMS on practising professionals. MRAs are geared towards supporting liberalisation of trade in services that will enable mobility of skilled labour and professionals in the region. To date, these arrangements cover those from the fields of dental services, nursing services, and medicine (i.e., highly regulated); accountancy, architecture, and engineering services (regulated); and tourism (i.e., unregulated) (Hamanaka & Jusoh, 2016). Acceding to MRAs implies willingness of AMS to collectively converge towards international standards, procedures, and qualifications (Iredale, 2001) that will promote the efficiency and competitiveness of service suppliers (Aldaba, 2013).
However, despite the existence of MRAs, the environment for the cross-border mobility of professionals remained very restrictive because of domestic regulations, which are compliance measures imposed by receiving economies on all foreign professionals to secure authorisation to supply services. Although these are not intended to exclude foreign service-providers (Crozet et al., 2016), they exist because of the continuous involvement and control of AMS in the process of allowing foreign professionals to practise in their labour market, rather than simply depend on an inexorable outcome of labour market internationalisation (Meyer et al., 2001). One of the intentions is to protect job opportunities for local service suppliers.
Although local professionals are deemed ready to participate as per the MRAs, the sufficiency condition requires that professional standards and protocols meet standardised regional specifications, which is challenging to accomplish. Hence, one may question whether MRAs are still important and relevant, given the constraints brought about by domestic regulations.
Relevance of MRAs
Despite MRAs becoming seemingly irrelevant because of domestic regulations, there is still value in them. We argue that AMS, particularly the developing economies, should continue investing in them. Rather than viewing MRAs as purely a facilitator of free movement of skilled labour in the ASEAN region, it can also be viewed as a significant avenue for improving human capacity. That is, even if receiving economies restrict professionals from sending economies because of their stringent domestic regulations, the sending economies still benefit from MRAs with their human resource development component.
Human resource development is the formation of the following dimensions of human capacity: human capital (i.e., motor, intellectual, and productive skills that can enhance an individual’s employability and increase lifetime income), social capital (i.e., human qualities, attitudes, and social skills that can enhance interpersonal relations, interdependence, cooperation, and teamwork), and knowledge capital (i.e., higher levels of knowledge and competencies resulting in growth of research capabilities of an economy through the creation of new innovations).
The formation of these dimensions is implied in the elements of MRAs. Despite the indirect link between MRAs and human resource development, this compels all economies participating in the MRAs to foster human resource development.
The fact that MRAs can nurture human, social, and knowledge capitals has motivated all participating economies to upgrade their educational systems, training, accreditation, certifications, licensing, and professional regulatory frameworks to enforce higher standards in the conduct of professional practice. Given these elements of MRAs, economies have pursued the formation of human capital, the creation of new knowledge, and the building of social capital. Hence, professionals are compelled to continuously improve on their respective crafts.
In harnessing the opportunities MRAs bring, there is a need to facilitate the formation of a stronger skill base by underscoring knowledge capital alongside social and human capital.
In developing human and social capitals, among others, there is a need for professional programmes to continuously (1) improve their curriculum design and delivery; (2) upgrade faculty qualifications; (3) institute progressive systems of determining and improving professional hard and soft competencies; (4) enhance continuing professional development programmes by making them more developmental than regulatory; and (5) institute a strong academe-industry linkage that will allow professionals to accumulate relevant and significant experience, accredit programmes, and institute credible certifications and licences. All of which are geared towards uplifting and ensuring the quality of professionals’ competencies and bridging any competency gaps.
In developing knowledge capital, there needs to be investment in research and development that can stimulate technological development and create new practices that upgrade human resource practices. Incidentally, knowledge creation and technological development are vital in enhancing the conduct of professional practice. Although research is not always practicable (for example, in the academic context), it can generate patents, innovations, and new methodologies that can contribute to the development of society in the long run.
This recommendation hinges on the findings of various pieces of scholarly literature regarding the significant link between university research and productivity growth in developed economies. Research and development enhanced the productivity of human capital by accounting for the differential income of university graduates. It also enhanced the productivity of the rest of the economy, especially for firms that finance a good portion of university research. This created spillover effects that benefited other firms and enhanced the supply of human capital, particularly graduate students with specialisations in science and technology (Martin & Tang, 2007). Moreover, in the US, university research also facilitated the development of knowledge for the creation of new technology to aid developed economiesʼ lead in digital information (Lynch & Aydin, 2004; Frenkel & Leck, 2006). Furthermore, because of increased investment in education, research for skills development, and technology adoption, East Asian economies (China, Japan, and Korea) experienced sharp increases in national income and standards of living (Pandey, 2003). Therefore, engaging in research- and technology-oriented curricula as a subset of an export-led development strategy can provide demand signals for the skills required for improving competitiveness.
Indeed, the formation of knowledge capital through research and technological development is a facilitating factor towards international competitiveness, thereby contributing to economic growth, efficiency, productivity, and competitiveness. In the midst of the Fourth Industrial Revolution (variously styled as “FIRe” or “4IR”), which changed the way people work and live, professionals must be able to swiftly adapt to a continuously changing demand that is becoming increasingly complex. Taking the lead from developed economies such as the US, China, Germany, Japan, and Singapore, they have taken advantage of FIRe to produce more research in engineering, computer science, chemistry, physics, biological science, social sciences, and environmental sciences in preparing their human capital.
While professionals from various AMS are deemed comparable with each other to participate in the regional mobility of labour, each AMS must go beyond comparability. Therefore, for developing economies to participate in FIRe, they should not only prepare their human capital, but they should also expand their knowledge capital in key areas that are being used for interconnectedness under FIRe. To sustain comparability and readiness, there has to be a continuous improvement in the education of faculty members who are handling professional degree programmes, through research and publication. Although publication is not required in professional practice, faculties should be experts in their respective fields. Otherwise, they become merely trainers that cannot articulate nuances and developments in their respective fields. With expert professors, appropriate training and education of professionals is ensured.
This article is based on the study of Rivera et al. (2019) “Assessing the readiness of Filipino MRA-supported professions to participate in the mobility of skilled labor in the ASEAN region: Lessons for APEC economies”, released as Discussion Paper Series No. 2019-12 by the Philippine Institute for Development Studies (PIDS) and funded under the Philippine APEC Study Center Network (PASCN) Research Program (PASCN-RGA/18-2019/36).
This article was originally published in The World Financial Review on 29 September 2022. It can be accessed here: https://worldfinancialreview.com/the-relevance-of-asean-mutual-recognition-arrangements-in-human-resource-development/
About the Authors
John Paolo R. Rivera is an economist with an extensive research portfolio in the areas of tourism development, poverty, remittances and migration, entrepreneurship, international trade, and development economics. He obtained his Doctor of Philosophy in Economics from De La Salle University School of Economics. He is currently the associate director of the Asian Institute of Management – Dr. Andrew L. Tan Center for Tourism.
Tereso S. Tullao, Jr. is a University Fellow and Professor Emeritus of Economics in De La Salle University. As a researcher, he has published several articles, monographs, and books in Filipino and English in the fields of economics of education, trade in services, movement of natural persons, migration, and remittances. He earned his Doctor of Philosophy at the Fletcher School of Law and Diplomacy, Tufts University.
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