The World Economic Forum's global competitiveness report last September set out the logic that shapes a globally competitive, flexible labour force.
The "efficiency and flexibility of the labour market", the report argues, "are critical for ensuring that workers are allocated to their most effective use". It continues: "Labour markets must therefore have the flexibility to shift workers from one economic activity to another rapidly and at low cost…"
This is the sort of exhortation heard so often that it no longer resonates. It has been embraced as "normal" in the context of an increasingly global economy. If countries wish to remain competitive they must be "agile" and "flexible". But what does it mean for those who are part of the "labour market"? What does it mean to live in a flexible labour market?
There are moments when policymakers and academics alight on something that the careful observer probably always realised was present - it just didn't have a label. And without a label it didn't have a presence in the minds of policymakers. Such was the case with the "discovery" of the informal sector by the International Labour Organisation (ILO) in 1972, in the wake of an employment mission to Kenya.
The informal sector comprises the shoe shiners, roadside newspaper sellers, stallholders, garbage pickers, bicycle menders, street hawkers, charcoal makers… all those women, men and children who fill the interstitial spaces that the formal economy does not. These activities are unregulated, family-owned, unskilled, labour- intensive - and use low or intermediate technologies. But they are also dynamic, efficient, adaptable, flexible and profitable.
In its 1972 report, the ILO assumed that as economies modernised, the informal sector would decline, wither and, in the end, largely die out. The formal sector would gradually encroach onto the terrain of the informal sector and there would be a progressive formalisation of the economy.
This, indeed, is what appeared to happen in South-east Asia between the 1980s and 1990s. In Thailand in 1980, the informal sector accounted for close to 80 per cent of total employment. By 2000, it had declined to under 60 per cent, and was expected to fall still further. Similar trends were evident in Malaysia, the Philippines and Indonesia.
To the surprise of many, however, since the turn of the millennium, most of the countries in South-east Asia have either seen a halt to the decline of informal employment or, in some cases, an actual expansion in its significance. In Thailand in 2010, informal employment accounted for 63 per cent of total employment. In Indonesia, the proportion was 66 per cent; in the Philippines, it was around 75 per cent; and in Vietnam, some 85 per cent.