Skill enhancement key to E Asia Growth:Economist
Although the East Asian countries have made a lot of progress in terms of economic development, the region still has to improve skills and education as well as deregulate service trade to ensure sustainable growth in the next 25 years, according to a se
Kirida Bhaopichitr told a seminar held by Asia News Network that overall, entrepreneurs in
developing East Asian countries have said low skills remained the No 1 obstacle to growth. In China, for instance, about 50 per cent of entrepreneurs say skill improvement
is their primary challenge, compared with more developed countries such as South Korea,
where only 15 per cent of entrepreneurs say inadequate skills of their workers are their biggest
business challenge.
Over the past 25 years, Asia has been the fastest-growing region in the world, accounting for about one-third of the global gross domestic product today, thanks to stable macroeconomic management, productivity improvements, greater openness to trade openness, better skill levels and greater innovation, she said. However, in the next 25 years, these countries will face the middle- income trap, whereby it is difficult to move up into the highincome group.
“We are stuck in the middle, unable to move up ... There is a lot to be done on the skill side.”
Apart from improvements in skills and education, these countries will have to make sure that
their growth is inclusive. Otherwise, there will be political blow-ups at one point or another,
she warned. In addition, countries will have to promote the service sector, which has high potential. So far, Asian governments have tended to focus more on manufacturing even
though export of services such as telecommunications, legal, accounting and logistics will be the fast-growing sector in the future. There remain many restrictions in service trade in the region.
Countries in Asia tend to protect this sector while there are fewer restrictions on trade in goods.
Developed countries such as those in Organisation for Economic Cooperation and Development have lower restrictions on trade in services. Kirida also noted that some
developing countries such as Mongolia and Cambodia have less restrictive regulations in trade in services because they want to attract investment. AVIATION Christian Klick, vice president
of Star Alliance, said the Asian region offered potential for air travel in the future. Travel within
Asia is increasing, now accounting for 17.9 per cent of the total, compared with 19 per cent in North America. Ten years ago, the majority of air travel was in North America and Europe.
Klick said that for this reason, air travel was no longer the businessof individual airlines, because no single carrier can cover such a large scale. Airlines have formed alliances such as Star because they want to be able to offer customers global services.
He also noted that this would work only if infrastructure were in place. In Europe right now, some
airports such as Berlin’s and London’s are cutting night flights to cope with under-capacity. In
contrast, Asian countries such as China are trying to expand their airport facilities.
Thailand will work with other Asean countries in setting up their own rice-trading zones, which are duty-free centres for trading. They will also serve as a centre for high-quality polishing and a base for shipping to third countries.
