Multinationals keen on SE Asia but cite lack of skilled labor

Multinationals keen on SE Asia but cite lack of skilled labor

SINGAPORE (DPA): Most multinational corporations regard Southeast Asia as significant for their future investment plans but retain misgivings about individual countries and an inadequate supply of skilled labor, results of a poll released Tuesday showed.

Eighty-four percent of the multinationals surveyed by the Institute of Southeast Asian Studies said they had a "strong" or "very strong" investment commitment to the region as a whole.

Expected growth of the regional market, as a result of such initiatives as the ASEAN Free Trade Area and the ASEAN Investment Area, was also viewed as "important" or "very important" in influencing foreign direct investment decisions by 74 percent and 78 percent of the multinational corporations respectively.

The Association of Southeast Asian Nations (ASEAN) groups Singapore, Thailand, the Philippines, Malaysia, Brunei, Indonesia, Vietnam, Laos, Myanmar, and Cambodia.

Pulling out of the region is not an option for 60 percent of those queried. However, about half said a lack of skilled labor is an obstacle to their direct investment plans, followed by the increasing costs of production.

"The long-term effects of Asia's lack of higher order skill levels is emerging as a potentially serious concern," the survey report said.

While one-third of the giant corporations polled said the Asian crisis had a "positive" or "very positive" effect on Singapore's investment climate, 45 percent said the downturn had a "negative" or "very negative" effect on Malaysia's investment potential.

The negative perception of Indonesia was 74 percent. Singapore may be "benefiting from a perceived upgrade in attractiveness, simply relative to the other countries in Southeast Asia," said the report.