In observance of the International Migrants Day, Dec 18
Japan has embarked on a major migration policy shift with a new law that passed the Upper House of the Diet in December 2018. Starting in April 2019, the new law will allow inflows of two types of foreign workers: (i) low-skilled foreign workers who would reside in Japan for up to five years and work in 14 specific sectors, including farming, construction, hospitality and shipbuilding sectors, but shall not be allowed to bring their family members, and (ii) foreign workers with a higher level of skills who would be allowed to bring their family members and could be allowed to live in Japan indefinitely (see Migration and Development Brief 30). According to news reports, Japan plans to induct 340,000 migrant workers over the next five years, though this may not be sufficient to compensate for a declining population which fell by 373,000 in 2017.
Japan has around 2.4 million foreign residents of whom 1.6 million come from Low- and Middle-Income countries (LMICs). If bulk of the new migrants come from LMICs, the new policy would represent a great development opportunity. LMIC migrants sent an estimated $7 billion in remittances from Japan in 2017. Around 98 percent of this accrues to the top 10 LMIC migrant source countries: China, Philippines, Brazil, Vietnam, Peru, Thailand, Indonesia, India, Bangladesh and Pakistan.
Outward remittances from Japan will increase with new migration. Remittance propensities could be even higher if Japan’s high remittance costs of around 10 percent were reduced. Due to geographical distance, cultural/linguistic proximity, trade/investment linkages and historical connections (including presence of Japanese diaspora), China, Philippines, Brazil, Vietnam, Peru, Thailand and Indonesia are arguably better positioned to harness this opportunity. But South Asian countries such as India, Bangladesh, Pakistan can also reap benefits if they play their policy cards well. Japan’s GDP per capita is nearly 25 times that of India, 40 times that of Pakistan and 45 times that of Bangladesh, but their share of migrants in Japan and proportion of remittance outflows from there is quite low. At a time when migration of low-skilled workers to Gulf Cooperation Council (GCC) countries is slowing down due to the impact of labor market nationalization policies and lower oil prices, Japan provides a viable alternative destination. Over-and-above remittances, greater migration to Japan could open new channels for innovation, skill upgradation, entrepreneurial exchange and diaspora investments.
To successfully harness the opportunity, LMICs, especially those in South Asia, need to:
1. Assess the needs of the Japanese labor market and provide appropriate training to potential migrant workers, perhaps in consultation with Japanese agencies.
2. Provide cultural and language skills to make adapting to Japan’s unique cultural norms easier.
3. Work towards bilateral recognition of educational and vocational qualifications.
4. Adopt formal guidelines for recruitment and deployment of various categories of workers, and adequate measures to lower employee-borne recruitment costs to avoid exploitation by unscrupulous recruitment agencies.
5. Negotiate bilateral labor migration agreements to ensure proper working conditions and welfare of migrant workers.
6. Address the issue of high remittance costs in coordination with Japanese agencies.
Bangladesh, for example, has already embarked on promoting skills training for caregivers, a class of workers Japan urgently requires (see Migration and Development Brief 29). To prevent activities of unscrupulous operators, the Philippines stopped recruitment agencies from hiring caregivers for Japan till formal guidelines were issued by the Philippine Overseas Employment Administration (POEA) on their recruitment and deployment together with a list of authorized recruitment agencies.