SE Asia facing skilled labor shortage: Poll

SE Asia facing skilled labor shortage: Poll

SINGAPORE (AFP): Except for Singapore and the Philippines,
Southeast Asian nations do not have a sizable pool of skilled,
well-educated labor crucial in the new millennium, an Asian poll
shows.

Thailand, Malaysia, Vietnam and Indonesia will find it
difficult to graduate into knowledge-based industries because of
the limitations of their labor force, according to the survey by
the Political and Economic Risk Consultancy Ltd. (PERC).

The Hong Kong-based think tank said in a report at the weekend
that Taiwan, Japan and Hong Kong were giving emphasis to quality
local education but South Korea had been spreading its skill
level "too thin."

"The defining feature of a country's competitive advantage in
the future will be the quality of its skilled workers," PERC said
in the report ranking 12 Asian nations on the basis of their
skilled labor quality.

Japan emerged tops, followed, in that order, by Taiwan,
Singapore, the Philippines, Hong Kong, India, South Korea, China,
Thailand, Malaysia, Vietnam and Indonesia.

The grades were provided based on a poll of nearly 500
expatriate businessmen living in the countries being surveyed.

PERC said that since the Asian financial crisis which erupted
in mid-1997, financial constraints have further reduced the
number of people getting a higher education in countries like
Thailand and Indonesia.

"This is probably the most damaging impact of the crisis in
terms of its lasting effect.

"One of the lessons to be learned from the Asian crisis is
that the countries of the region need to focus more on
productivity. This will be easier to do if there is a sufficient
pool of well-educated and skilled labor," explained the report.

PERC said that besides Singapore, the Philippines is the only
Southeast Asian nation that possessed a labor force with the
depth needed to move beyond a manufacturing focus to high value-
added functions.

"If Manila plays its cards right, it should be able to profit
from the labor shortcomings in other Asian countries," it said.

But PERC cautioned that the Philippine government was doing
little to realize this potential, and many domestic forces were
more concerned with protecting their position in the local market
than with giving the country a more external orientation.

The report also said it would be much more difficult for
Thailand, Malaysia, Vietnam and Indonesia to stake out a claim
for themselves in real "knowledge" industries and move up the
value-added chain.

Malaysia may have a head start over the others but still the
limitations of the local labor force were evident, it said.

But the situation is even more difficult for Thailand, Vietnam
and Indonesia.

Vietnam was passed by Asia's first phase of industrialization
and is now starting from a much lower base than all but
neighboring Laos and Cambodia.

Neither Indonesia nor Thailand had a deep pool of well-
educated labor before the Asian financial crisis which slammed
the brakes on the region's rapid growth, PERC said.

The report warned that the crisis was likely to widen the gap
between the haves and have-nots, saying multinational companies
were no longer going to try to create "self-sustaining" units in
each country.

This was because of the powers of the Internet and other
technology means which made more sense to centralize the mainly
higher value-added "knowledge" functions in locations that can
support the lower valued-added manufacturing or retail operations
elsewhere in the region, it said.