Skill development and regional mobility: lessons from the Australia- Pacific Technical College Michael A. Clemens, Colum Graham, and Stephen Howes* Presentation for 2014 AAIDP Workshop February * presenter 1

Introduction We want more labour mobility but – Developed countries don’t like unskilled migration – Developing countries don’t like skilled migration: “brain drain” Can “Global Skills Partnerships” solve this problem? – “[d]estinations can create the skills they need while building rather than sapping skills at the origin” APTC as one of the first examples of a Global Skills Partnership – Did it work as a Global Skills Partnership – Why or why not? – What are the lessons? 2

About APTC First announced in late 2005 at the Pacific Islands Forum in PNG by PM Howard in response to Pacific pressure to enhance labour mobility Name and funding commitment at 2006 PIF – “The college will assist economic growth in Pacific island countries by addressing skills shortages and increasing workforce competitiveness, and will also assist mobility of skilled workers between the Pacific and developed countries.” – The bold part is the APTC international mobility (IM) goal 3

About APTC (cont.) Commenced in July Today has campuses in Fiji, PNG, Vanuatu, Samoa, and the Solomon Islands. A new institution; contracted out Offers Australian Cert III and IV diplomas in automative, construction, tourism, health and community services. “Postgraduate” or “top-up” provider (to control costs; and avoid competition) By Dec 2013, 5,600 graduates. Cost of $300 million

Did APTC achieve its IM goal? As of date Jan.Jul.Mar.Nov. Annual graduate tracer surveys (our analysis) Total graduates to date (stock) — % migrant1.7%1.8%1.5%— % in Aus/NZ—1.4%1.2%— 2013 cumulative tracer survey (Swanton and Ong analysis) Only 2007–2011 graduates (stock)———4804 % migrant———3.3% % in Aus/NZ———[2.6%] * Cumulative migration by APTC graduates 5

Was the problem lack of demand? No direct question asked in tracer surveys. But – 5.4% of annual tracer survey respondents provide unsolicited comments that they want to migrate – A 2013 cumulative tracer study reports that 86% “intend to move country or region for work” Perhaps split – External evidence of high demand to migrate On the Australian side, continued skill shortages, especially in areas targeted by APTC 6

So why did APTC not achieve its IM goal? Cost – Recognition of overseas work experience is necessary for APTC graduates to migrate to Australia. – This requires passing a skills assessment administered by a Registered Training Organization. – This and visa costs are expensive. We estimate $3,000 to $5,000. Lack of employer linkages – Sponsored migration easier than unsponsored, but the Pacific not a natural recruiting ground for employers. 7

Why was not more done to achieve the IM goal? Not because the economics of the project suggested the IM goal unimportant. – 2010 AusAID CBA: ERR with international mobility (25-50%): 12-20% ERR without international mobility: <8% – 2011 World Bank Pacific labour market analysis Formal TVET institutions should only be a priority in the Pacific in countries that have access to international labour markets. 8

So why was not more done? A lack of political commitment to the APTC IM objective in Australia. – One example is Senate 2010 enquiry into the Pacific. Recommendation 10 of this enquiry asked AusAID to do a study of its scholarships and APTC to ensure it was not contributing to brain drain. – The Government response was that no study was needed because “anecdotal evidence” suggested migration among APTC graduates was low. 9

What about the origin countries? Why didn’t they kick up a fuss? PICs were always keener on seasonal work, and they eventually got the SWP PICs were worried about brain drain – “…there is a perception … that the APTC was conceived as … a strategy to prepare Pacific Islanders for migration to Australia, thus denuding the region of its skilled workers” (AusAID mid-term review 2009) It is possible that the APTC design accentuated PIC concerns about brain drain. – Because of its “postgraduate” design, if APTC had succeeded in its IM goal, it would have contributed to brain drain. 10

Some lessons or “ingredients for success” Political commitment – needed in destination and origin countries. Avoiding skill depletion – Any program with an IM objective must ensure that the domestic consequence of success is not one of skill depletion. Mechanisms to facilitate skill recognition. Links to employers Interministerial coordination. Cost control through use of national staff. 11

To summarize APTC has not met achieved its IM objective because of its sole focus on provision of Australian-level training, and neglect of migration barriers around financing and employer links. These design flaws have persisted because of a lack of political commitment to the APTC IM objective both in Australia and in Pacific countries. The failure to achieve the IM objective has clearly and substantially reduced APTC’s economic benefits. It also teaches us a number of important lessons for any future such undertaking, including the need to design global skill partnerships to avoid the risk of skill depletion. 12

Thank you. 13