Filipino, Indian, Vietnamese most competitive in Asia

Filipino, Indian, Vietnamese most competitive in Asia

SINGAPORE (AFP): The Philippines, India and Vietnam are seen by business executives as having the most competitive labor pools in Asia, where many countries are facing manpower problems, according to a regional survey.

The Political and Economic Risk Consultancy Ltd. (PERC) said a poll of 400 executives showed more affluent countries like South Korea and Singapore, both marked by labor shortages and high wages, were ranked lowest.

"Asia has a labor problem -- a big one. Labor issues -- finding, training and retaining workers -- are the single biggest challenge facing most company managers," said the PERC's fortnightly Asian Intelligence report.

The Philippines had "the best balanced labor situation" among 12 countries covered by the survey, dislodging India, which scored highest in a 1996 poll.

"Senior managers continue to regard Philippine labor as cheap and of high quality, at least partly because of their good command of English. Turnover rates are also low," the PERC report said.

But it warned that perhaps because of the plentiful supply of both trained and untrained labor, companies in the Philippines have lagged in adopting new technology, and as a result, productivity tends to be "extremely poor."

India slipped in the rankings, despite having an abundance of workers with quality technical skills, because illiteracy is more prevalent particularly among women, and the problem of child labor is more extensive, PERC said.

"Compounding the problem is the caste-stratified culture to which company managers have to be sensitive," it remarked.

In Vietnam, foreign businessmen may be "extremely put off" by corruption and bureaucracy but the labor force "is clearly an attribute the country can use as a big drawing card," the report said.

Vietnam has been more successful at providing basic education than countries like China or India, which have deeper labor pools, and Vietnamese "are also eager to work," with some of the lowest wage levels in the region.

PERC said Vietnamese are also noted for linguistic skills, with workers fluent in such languages as English or French and several dialects of Chinese.

In fourth-ranked China, the country is so big that the situation in one part is very different from the other, and foreign investment is now gravitating toward areas with more universities such as Shanghai and Tianjin.

Productivity is in general a "tremendous problem" in China, and "personal connections rather than technology are considered to be the asset needed to get things done," the report noted.

Indonesian labor, ranked fifth, is still considered relatively cheap but "quality leaves much to be desired," the report said.

In eighth-ranked Thailand, currently wrenched by severe economic problems and a sharply devalued currency, the labor situation is "very worrying" after the government neglected the educational system, resulting in a shortage of skilled technicians.

Production costs have risen and unskilled Thai labor is costlier than in other developing countries. Moreover, companies cannot bring in sophisticated equipment because they cannot find workers to run or maintain it, PERC said.

Malaysia, ninth in the rankings, is one of the most difficult countries in the region to recruit skilled and unskilled labor and turnover rates are very high, but the push toward new technology could compensate for the constraints, PERC said. Taiwan and Hong Kong came in at the middle of the rankings.

Hong Kong's brain drain problem has been exaggerated and more labor has in fact moved into the territory than has left it, PERC said.

Middle- and upper-management is expensive but of high quality and quite mobile, enhancing Hong Kong's status as a regional corporate center and a base for supporting China business, it said.