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Many commentators expect Asia's rapid economic growth to be threatened by too few professional and skilled workers. Instead of deriving comparative advantage from large numbers of cheap unskilled workers, as they have for the past two decades, many commentators urge Asian nations to upgrade their educational systems to produce more professionals, scientists, and engineers.

For example, Hong Kong has an historically high unemployment rate--3.5 percent--and, simultaneously, large numbers of vacancies for skilled and professional workers. At the same time, professionals such as accountants, nurses, and computer programmers from India to the Philippines cannot find jobs that use these skills in their own countries.

Even countries attracting large amounts of Foreign Direct Investment (FDI) suffer from shortages of skilled and professional workers. In Indonesia, for example, about half of the university graduates entering the job market each year are unemployed, but foreign investors complain that they cannot find local supervisors and mid-level managers. Foreign investors have similar complaints in China, Malaysia, and Thailand about shortages of skilled workers and technicians.

Many governments concerned about foreign workers and wanting to maintain rapid economic growth agree that "the higher-end manufacturing base envisaged by government planners will not materialize unless local education and training systems are able to provide the sort of skilled workers required by potential foreign investors."

However, in the US and Australia, countries that accept large numbers of permanent and temporary foreigners on the basis of their skills, there is a growing belief that easy access to foreigners discourages local workers from training for occupations that have a significant number of foreign workers.

Singapore. Singapore Economic Development Board began to send missions abroad in 1991 to recruit new graduates for jobs in Singapore. The missions permit local companies to screen candidates in India, the US, and Australia for professional jobs in computer science and engineering. In 1994, about 500 jobs were offered to foreign professionals--40 percent Indians and Sri Lankans--and 40 percent in computer science and engineering.

There are over 100,000 mostly unskilled Malaysian workers in Singapore, but a decision of the Singaporean government to exempt after August 1, 1995 foreign workers and their employers from contributing about 20 percent each of their gross pay to the Central Provident Fund (CPF) was expected to attract additional skilled and professional workers to Singapore. The 300,000 work permit holders whose employers are required to pay the Foreign Workers' Levy were exempt from CPF contributions.

Under Singapore's levy system, employers pay a levy of S$200 (US $150) per skilled worker each month instead of S$440 for unskilled workers.

Malaysia. Malaysia established a Human Resources Development Fund (HRDF) in 1992 to promote the training of skilled workers, with highest priority for the printing, plastics, steel and iron, electronic and electrical, and textile industries. The Fund makes grants to firms that establish training facilities, and rebates up to 20 percent of the firms' contributions to the HRDF if the firm establishes training facilities at its production site.

Japan. The number of foreigners employed in Japan has decreased by about three percent since 1993, but the number of foreigners employed as engineers and managers increased about 15 percent. Many Japanese firms are hiring foreigners as permanent workers, hoping they will become candidates for jobs in overseas offices.

Outside Asia. The US, Canada, and Australia have programs through which professionals and skilled foreigners can enter as temporary or permanent immigrants. In all three countries, these immigration systems are coming under attack.

In Australia, unions in April 1995 complained that the government was permitting the entry of 30 British tool makers for 18 to 24 months despite high unemployment. Australia uses a point system to select permanent immigrants on the basis of their skills, and the 1993-94 intake included 445 doctors, 324 civil engineers, 537 secondary school teachers, 210 lawyers, 149 economists and 114 architects, as well as 652 accountants, 830 computing professionals, 543 nurses, 288 carpenters and 366 vehicle mechanics.


"Japan must utilize foreign employees properly to survive," The Daily Yomiuri, December 5, 1995. "CPF move may woo more local workers to Singapore," New Straits Times July 21, 1995. "Labor Mismatch seen as growing Asian problem," The Reuter Asia-Pacific Business Report, July 13, 1995. Koh Buck Song, " Fine-tuning the talent search," The Straits Times (Singapore), May 20, 1995.