Page 72 - AEI Insights Vol. 7 2021

AEI Insights, Vol 7, Issue 1, 2021

production. So, they have relatively higher level of the LFPR with basic education. By contrast,
these poorer countries may lack of appropriate education policy for higher learning and labour
policy for the promotion of employment among workers with the higher level of educations.
These countries have relatively lower level of the LFPR with advanced level of education.

The impact of COVID-19 pandemic on ASEAN’s labour market
Disruptions in the regional and global supply chain, travel bans and lockdowns due to the
pandemic have had extensive repercussions on the labour market causing widespread limits on
business and workplace operations. As work and business is the source of income to many, the
lockdown and other containment measures have decelerated most of the economic activities in
ASEAN (United Nations, 2020) affecting workers in the labour market. This includes
temporary business closures as the community were forced to stay at home following
quarantine orders. The most affected industry in ASEAN is travel and tourism as ASEAN relies
heavily on this sector. In 2018, travel and tourism contributed 12.6 percent to the economy of
ASEAN (ASEAN, 2020). However, the travel restriction and border control have restricted
entry of foreigners, leading to a large drop in the number of tourists into ASEAN countries.
The pandemic has not only halted the aviation industry but also impacted the tourism and
hospitality related sector (ASEAN, 2020) such as hotels and restaurants due to the cancellations
of tickets and room reservations (Foo, Chin, Tan, & Phuah, 2020). As Cambodia, Thailand and
Vietnam are the ASEAN countries with the largest share of employment in tourism reaching
6.7, 9.0 and 6.9% respectively (ILO, 2020a), workers in tourism-related industries in these
ASEAN countries suffer most.

The repercussion of the pandemic on the labour market is reflected in the various forecasts of
the impact on the regional GDP. Vietnam’s GDP growth projections for 2020 is 2.7 percent
from 7.0 percent in 2019 (International Monetary Fund, 2020). Similarly, GDP growth is
projected to decline to 0 percent in 2020 in the ASEAN+3 (Brunei Darussalam, Cambodia,
Indonesia, Myanmar, Lao People's Democratic Republic, Malaysia, Philippines, Singapore,
Thailand, and Vietnam), plus China, Japan, and South Korea, from 4.8 percent in 2019. The
GDP declines are more likely for Cambodia and Thailand, as these countries have very close
ties with tourism and development in terms of trade services (Kimura, Thangavelu, Narjoko,
& Findlay, 2020).
In Southeast Asia, the unemployment rate has soared to almost unimaginable levels as a result
of the pandemic that has ravaged economies to varying degrees. Thailand is expected to
experience the worst economic downturn of any state in Southeast Asia, mainly due to its heavy
reliance on global tourism. The unemployment rate in Thailand increased to 1.9 percent in
August 2020 from 1% in the same month of the previous year. It was reported that job losses
in Malaysia increased by 42 percent year-on-year for the first quarter of 2020.
The lockdown efforts to mitigate the spread of the pandemic have resulted in the reduction of
business operations, temporary reduction of working hours or workdays, and reduction of
employees, affecting workers of all ages in the region. Such a situation may explain the reason
to why certain self-employed jobs tend to increase during a crisis, as self-employment becomes
a default option to many job losers for their economic survival and income (International
Labour Organization, 2020). As a result, underemployment would increase on a wide scale
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