Japanese Direct Investment and its Impact on Migration in the ASEAN 4

Abstract

Although the manufacturing sector's share of employment is still small in ASEAN-4 countries, the development of manufacturing, especially labor-intensive industries, will be indispensable for absorbing part of the increase in labor force. In these countries, Japanese direct investment (JDI) has been more highly concentrated in the manufacturing sector than JDI in other regions. The Japanese “New Asian Industrial Development (AID) Plan” is a comprehensive economic cooperation package, which supports the introduction of JDI and the promotion of exports in ASEAN-4 countries. JDI and AID may, in turn, help alleviate the domestic labor market situation and reduce the incentive for workers of ASEAN-4 countries to migrate to work overseas.