International Labour Migration and Foreign Direct Investment in East Asian Development: Taiwan and Japan Compared

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Title:	International Labour Migration and Foreign Direct Investment in East Asian Development: Taiwan and Japan Compared
Authors:	蔡青龍;Tsai, Ching-lung;Tsai, Pan-long
Contributors:	淡江大學東南亞研究所
Date:	2003-03
Issue Date:	2011-10-20 20:32:13 (UTC+8)
Publisher:	Chiba, Japan：Institute of Developing Economies, JETRO
Abstract:	The factor movements of international labor migration (ILM) and foreign direct investment (FDI) are integrated parts of the global or regional development process. They represent the outcomes of market forces generated to equilibrate factor rewards across countries at different stages of development. This paper first introduced a conceptual framework of the Investment-Migration-Development Path (IMDP), which was constructed by combing two strands of literature on ILM and FDI. Based on the experiences of Japan and Taiwan, the study then utilized the IMDP framework to highlight the development-FDI-ILM nexus observed in the East Asian development. Japan was under the pressure for importing foreign workers or relocating production abroad in the 1960s and 1970s. While labor importation was prohibited, the first wave of Japanese FDI landed Taiwan and other Asian NIEs around 1970. The Japanese FDI fitted the comparative advantages of the NIEs. As observed in Japan, Taiwan entered the stage of labor shortage in the 1980s and had to face the choices of investing overseas or receiving foreign workers. In the late 1980s and early 1990s, there were massive out-flows of FDI from Japan, Taiwan and other NIEs to Southeast Asia. In the meanwhile, a growing number of illegal workers emerged in Japan and Taiwan to meet the needs of firms and to fill the vacancies of the dead-end and 3-D jobs shunned by local workers. While Japan insists on the refusal of unskilled laborers from overseas, Taiwan started to import a limited number of contract workers form Southeast Asia in 1992. The IMDP analysis found that FDI and ILM have been treated asymmetrically in policy formation. Internationally, there are no comparable institutions like WTO in trade and FDI, which endeavour to facilitate ILM. At the national level, there remains strong resistance to (unskilled) foreign workers in many countries, despite the evident trend toward further capital deregulation and liberalization. However, there is no way for a (more) developed country to avoid the ILM problem. More pragmatic considerations and economic ways of thinking are surely needed.
Relation:	Trade, Investment and International Labor Migration in APEC Member Economies, pp.133-168
Appears in Collections:	[Graduate Institute of Southeast Asian Studies] Chapter

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