Minimum Wage Systems of the Greater Mekong Subregion

IMG_2768

Earlier today, I attended the 5th International and National Stamford Conference (http://conference.stamford.edu) at the Asoke campus of Stamford International University at Exchange Tower. My paper was on “Minimum Wage Systems of the Greater Mekong Subregion.”

Abstract:

As a policy, the minimum wage has always been controversial and its results contested. Proponents claim that it leads to the eradication of the worst excesses of exploitation in a labour market, while opponents argue it prices poorly-skilled workers out of a job. Evidence is inconclusive for this basic issue, partly because of insufficient evidence and the research is even more limited when it comes to consideration of subtler objectives of the policy, such as the desire to promote regional development in an unequal society or protect particular sectors (e.g. Malaysian plantation workers) or to reconfigure spatial development within a country so as to manage flows of migrant workers more effectively. The evidence on minimum wages that does exist tends to be derived from the developed economies and to be bound within a single discipline (e.g. economics) which is unable to incorporate the range of other effects and implications with which a minimum wage is associated. Assessing the effects of minimum wages in the Greater Mekong Sub-Region (GMSR) is more complex because of the absence of reliable data in many areas, the prominence of the informal sector, the large-scale undocumented internal and cross-border migration flows and the continued importance of the agricultural sector. Even so, the importance of the minimum wage as a tool of social policy has been intensified as more and more parts of the region become subject to the Factory Asia paradigm of import-substituting, export-oriented, low labour cost competitive manufacturing. Adoption of this paradigm leads to the creation of a working class and significant rearrangement of gender relations, among other changes. There is a need, therefore, to investigate the current minimum wage systems used within the GMSR and the alternatives that might be adopted, seeking to understand how they are set (e.g. imposed by government or as a result of tripartite negotiations), at what levels are they set and why and to what extent is it possible to trace the relationships between minimum wage systems and other forms of social policy. The experiences of the GMSR members in this regard are ranged along the trajectory of the Factory Asia paradigm, with Myanmar and Laos just starting to embrace it and Thailand having reached the limits of what it can achieve and seeking an upwards exit. The minimum wage strategy is, consequently, affected by time as well as space and is also dependent to some extent on the external environment.

Advertisements

Journal of Shinawatra University, Vol.3, No.2 (May-August, 2016).

Download the full version of the journal JSIU 3.2.

Journal of Shinawatra University

Volume 3, Number 2, May-Aug, 2016

Table of Contents

Editor’s Introduction                                             3

Peer Reviewed Papers

The Sino-Thai Relationship in the Context of Various Perspectives of International Relations – Sirirat Ngamsang                           5

A Study of Marketing Issues in Social Welfare and Planning for Rural Development Society – Surabhi Singh                               18

Paw San Rice Marketing in Shwe Bo – Khin Kyi Zin                   29

 
Book Reviews

Future Cities by Camilla Ween – John Walsh                         52

SEA Is Ours by Jaymee Goh and Joyce Chng, eds. – John Walsh         54

The Food Wars by Walden Bello – John Walsh                        56

General Editorial Policies                                       59

Yes, I know it is 2017 now – the circumstances are beyond my control.

 

Savan-Seno Special Economic Zone and Industrial Development in Lao PDR

 

 

On Friday, I attended the 3rd National and International Conference on Politics, Philosophy and Economics at Rangsit University in Bangkok, which was organized by the Political Science Association of Kasetsart University, which is an active body with various conferences and journals published. It was not a very large conference but it was a friendly one and well-organized.

My presentation was entitled “Savan-Seno Special Economic Zone and Industrial Development in Lao PDR,” which was successfully conducted. There is a full-text version of the paper available but only the abstract was included in the conference proceedings so I will wait to see if it gets published (in revised form) elsewhere.

Provision of Educational Services in Special Economic Zones in the Greater Mekong Subregion

Yesterday I attended the last day of the Newton Fund Researcher Links Workshop at the Asia Hotel in Bangkok organized by the British Council and hosted by Khon Kaen University. The purpose of the workshop is to help foster links between British and Thai academics, particularly early career Thai academics.

My presentation was on Provision of Educational Services in Special Economic Zones in the Greater Mekong Subregion

Abstract

Special economic zones (SEZs) are time and space-limited areas in which the regular laws of the land do not apply. Instead, various provisions are made to privilege capital above labour and, thereby, encourage domestic and especially international investment. States welcome this kind of investment because it provides direct employment and the prospect of technology transfer and industrial deepening. In the Greater Mekong Subregion (GMS) (i.e. Cambodia, Lao PDR, Myanmar, Thailand, Vietnam, Yunnan Province of China and Guangxi Zhuang Autonomous Zone) SEZs are being enthusiastically promoted because of the help it is hope they will provide states in passing through the Factory Asia Paradigm (FAP) – i.e. import substituting, export oriented, intensive manufacturing based on low labour cost competitiveness and a potential exit from it that would represent graduation from the Middle Income Trap. At various stages of the FAP, it is necessary to provide educational services to employees at different levels of seniority. This might include specific on-the-job training, vocational skills-based education or more advanced forms of learning to foster creativity and innovation. Within the GMS, educational provision has begun to be provided in some of the different types of SEZ that have been opened or which are still being built. More will be expected in the future as, for example, the Thai government has recently called for foreign universities to open facilities within its SEZs to try to meet state-level developmental goals. This paper investigates the current level of provision of such forms of education and compares it with what might be required, together with a brief consideration of how the gap might be bridged.

Keywords: education. Greater Mekong Subregion, special economic zones, vocational education

There is going to be book on the workshop’s themes in due course and I plan to submit a chapter to it.

The Role of E-Commerce in Enabling Mekong Region Subsistence Farmers to Enter Regional and International Markets Equitably

This weekend I was at the Grande Westin Sukhumvit Hotel for the Second ERIA (http://www.eria.org/) Workshop on Cross-Border E-Commerce in ASEAN and East Asia.

IMG_2737

IMG_2735

My paper was “The Role of E-Commerce in Enabling Mekong Region Subsistence Farmers to Enter Regional and International Markets Equitably.”

Abstract

There are still large numbers of subsistence farmers in the Greater Mekong Subregion who live in or close to poverty. A recent four-country survey found that nearly half of all people interviewed has some form of food insecurity experience over the past year and these results were higher for people in rural areas (Hapfel & Walsh, forthcoming). Problems from which such households suffer include lack of capital and education, poor access to specific inputs and technical knowledge and no awareness of how to obtain market access. When farmers do enter into contracts for cash-crop production, they face problems such as lack of effective contract law, contracts in verbal not written forms and the propensity of either side to the contract to change conditions in response to short-term price changes. In any case, farmers suffer from the need to trade commodities in volatile markets, the lack of local market development that would make product diversification less risky and inability to convert commodities into value-added products in the context of a region vulnerable to environmental shock and the emerging effects of global climate change. While farmers’ fortunes have been transformed in Thailand, this was at least partly the result of an active, interventionist private sector and extensive transportation and distribution infrastructure that do not exist to anything like the same extent in other Mekong region countries. However, what people in rural areas do now have in great numbers is access to the internet through relatively cheap mobile telecommunications. The penetration of mobile telephones in every country has now become very high and, while freedom of speech with respect to political issues is still restricted, this rarely has an impact on commercial relationships and networks. At the very least, this technology permits people to exchange knowledge about market prices and demand conditions for various products. However, the technology does not permit communications with people speaking a different language nor suggest how to find new market contacts, especially when they are cross-border in nature. There is a need, therefore, to try to understand what mechanisms need to come into existence in order to promote the kinds of remote linkages required to help bring farmers into market relationships on a more or less equitable basis. Is it necessary to introduce either new laws or regulations to ensure e-commerce takes place in a desirable manner or else to change the way that existing laws or regulations are policed? This paper identifies the current conditions under which farmers in the Mekong region currently exist and analyses their ability to access both mobile telecommunications in itself and the network benefits that may flow from it. It also outlines what legal and regulatory frameworks exist and how they may need to be modified to promote equitable market development. The analysis leads to a discussion of what might be achieved through e-commerce in this context and provides recommendations for stakeholders at a variety of levels.

Keywords: agriculture, e-commerce, equitable development, Greater Mekong Subregion, markets

The event went well and we researchers are now asked to submit the final version of the papers on August 20th, 2017.
 

Fostering Economic Cross-Border Interactions in the Greater Mekong Subregion

Last week I also attended the International Convention of Asian Scholars (http://icas.asia/icas-10-chiang-mai-2017), also held at the International Convention Centre in Chiang Mai (http://www.cmecc-mice.com/).

IMG_2718IMG_2709

(Mr Eric Bediako, PhD candidate at Shinawatra University, prepares to give his paper.)

My paper was “Fostering Economic Cross-Border Interactions in the Greater Mekong Subregion”

Abstract:
The Thai governments plan to create a series of border special economic zones (SEZs) in provinces bordering Lao PDR, Cambodia, Myanmar and Malaysia has raised a number of questions. Among these is the issue of how the SEZs will actually stimulate the cross-border complementarity of resources that appears to be envisaged, as well as the secondary or indirect effects that this will have on individuals and organizations. Cross-border trading is increasing in nearly every part of the Greater Mekong Subregion (GMS) but the nature of the trade can still involve basic commodities and non-value-added products. This contributes to the possibility of asymmetric trade that benefits one side more than the other, as has often been the case with cross-border contract farming, for example. In addition to trade, cross-border visits involve leisure, retail and health issues, as well as land speculation and real estate development. This paper takes a case study approach to several instances of cross-border interactions in the GMSR, including the proposed border SEZ at Nong Khai and the link with Vientiane, the Poipet-Aranyaprathet cross-border casino-real estate boom and the northern Myanmar-China series of interactions. It is argued that these interactions can function reasonably well without additional regulation but that their effects are complex and unpredictable. From a developmental perspective, one positive approach from states would be to assist in building necessary infrastructure as an enabling technology and then allowing people to make use of it.

 

 

 

Spatial Economic Initiatives in Thailand

Last week I attended the International Conference on Thai Studies (http://www.icts13.chiangmai.cmu.ac.th/) held at the International Conference Centre in Chiang Mai (http://www.cmecc-mice.com/).

IMG_2702IMG_2691

(Walden Bello acting as discussant).

My paper was “Spatial Economic Initiatives in Thailand.”

Abstract

In common with other mainland Southeast Asian countries, Thailand has historically been dominated by a primate city, Bangkok, in which all principal economic, social, political, religious and monarchical institutions have been concentrated. Awareness of the problems that this concentration has caused has been recognised in developmental plans since the 1950s, when efforts at decentralization were first introduced. Assisted by improvements in transportation infrastructure made during the Cold War period, initiatives such as the creation of the Northern Region Industrial Estate have been intended to develop other parts of the country to modify migration flows and reduce income inequalities which have become more marked through the years. The Board of Investment has been instrumental in offering incentives to foreign and domestic investors in industrial estates to the north of Bangkok in Pathum Thani and Ayutthaya, where good roads link the places of production with the markets of the capital and the main port of Laem Chabang. Currently, the border special economic zone policy aims, insofar as its objectives have been coherently stated, to promote development in border regions which can take advantage of cross-border trade and investment. In these efforts, success has usually been achieved when public sector agencies have provided what private sector interests wanted and this is likely to continue in the future. This paper explores the various economic spatial initiatives that have taken place in the country and attempts to analyse when and where these have been successful and what lessons failures have been able to provide.

Keywords: Thailand, special economic zones, economic geography, regional development