By Bernama
Manila : Developing Asian economies may fail to reap the “demographic dividend” if they do not invest enough in their education and training systems, the Asian Development Bank (ADB) said on Wednesday.
In its flagship publication, Asian Development Outlook 2008, the Manila-based development bank said developing Asia is passing through a demographic phase that has a high share of young adults in the total population.
This “youth bulge” has the potential to stimulate economic growth through productive employment, asset creation, and investment.
“The growth opportunity must be harvested within the next two or three decades,” China’s XINHUA news agency quoted ADB Chief Economist Ifzal Ali, as saying on Wednesday in a press release.
“To redeem this demographic dividend, countries have to put in place an enabling policy environment and strengthen the institutional framework,” he added.
The “youth bulge” will start to shrink around 2010, and by 2040 the percentage of young people in the total population will be about 14 percent, down from 20 percent in 2005, according to the report.
Before the bulge begins to shrink, it is critical that economies create productive and sustainable jobs for the young.
However, youth unemployment and joblessness are on the rise. In developing Asia as a whole, only about 60 percent of young men and 40 percent of young women are employed.
Poor quality education and training are increasingly pushing impoverished, young workers into lowly-paid jobs in the informal sector.
The main ingredients of an appropriate policy environment include boosting the relevance and quality of school curriculum; providing support for vocational training; and helping kick-start job schemes that impart useful skills, the report said.
ADB warned that developing Asia, home to over two-fifths of the global population, is suffering from a serious shortage of skilled workers. The supply of highly skilled and professional workers has not been able to keep up with Asia’s booming demand. Widening skills’ gaps raise costs for businesses but also hobble productivity of industries and can constrain growth of the wider economy.
To fix this problem, an overhaul of Asia’s underperforming higher education systems is needed, but this will take time to yield results, ADB said. Meanwhile, governments can implement short-term measures to help ease constraints. These include steps to stem the “brain drain”; encourage Asian emigrants to return home; making it easier for skilled non-Asians to live and work in the region; and raising retirement ages.
The report said that Asian economies could realize important gains by working together to liberalize intra-Asian movements of all workers, not just highly-skilled workers. Tntra-Asian migration is on the rise and that the trend will continue in the future, it added.
“Efforts to promote regional cooperation on and liberalization of immigration, that would complement deepening integration in goods and capital markets, hold great promise,” Ali said.