Employment opportunities in Asia

MANILA, Philippines—To the younger OFWs who still have the next 10 to 20 years to work abroad, my advice is for them to look for opportunities in Asia, where the most dynamic economies will be (in contrast with the stagnating industrialized countries of the West and Japan).

That Asia is the new economic epicenter has already become a cliché. Dynamic growth is without doubt shifting from the Atlantic to the Pacific. This transition can be attributed mainly to the two economic superpowers of Asia, China and India. A number of economists project that China will surpass the US, and India will become the third largest economy in the next few decades. Goldman Sachs’ Jim O’Neill, who coined the acronym BRIC (Brazil, Russia, India, and China), is forecasting that China is likely to overtake the US by 2027, while PriceWaterhouseCoopers projected that this could happen as early as 2020. Nobel Prize winning economist Robert Fogel surmises that the Chinese GDP could reach $123 trillion in 2040. The main driving force for this extraordinary growth will be the increased productivity of the 700 million rural Chinese who will be the main beneficiaries of the enormous investments that the Chinese government is making in education.

The Great Recession could have been providential for Asia. It is entering the new decade 2010-2019 amid great optimism. Many Asian economies, led by China, are expected to catch up fast with their more advanced colleagues from the OECD countries. China will surely overtake Japan as the world’s second largest economy sometime this year 2010. With a strong rebound in its exports, China has already overtaken Germany as the world’s largest exporter. It has also ended the US supremacy in the global automotive market. All these have happened at the dawn of the new decade, as the Great Recession struck at full force.

As Mr. Mohammad Shahidul Islam of the Roubini Global Economics Group observes, Asian companies led by the Chinese are increasingly competing with the US and Europe for spots on the Global Fortune 500 companies, which remain a mark of corporate strength. Chinese corporate giants—Petro China, ICBC, and China Mobile—have already taken three of the top five positions of the Financial Times 500 Companies. The latest Bloomberg data show that Chinese banks have placed US banks as the most highly valued financial institutions, taking four of the top five slots in a ranking of bank share prices as a multiple of their book values. It is highly probable that Asia Inc. could end the dominance of Western corporations by this decade. It would be wise for the developing countries in Asia to shift their attention away from the advanced economies toward their giant neighbors like China, India, and Indonesia.

With nearly $5 trillion in foreign exchange reserves, Asia now has increasing clout on global finance and investment. The Central Banks and sovereign wealth funds of East Asia—together with those in the Middle East—have become the new power brokers in the global finance.

But even more than finance, the most valuable asset of Asia is its demography. Mr. Shahidul Islam puts it very aptly: “While China and India are increasingly investing in their future, Europe and America are allocating more budgets to their past—the elderly.” The importance of a large population has become so obvious that even China is reconsidering its one-child policy, especially in such cities as Shanghai and Guangzhou, where labor shortages are already creating serious problems for industry. Large and relatively young populations confer a double benefit on the emerging markets: abundant labor and huge domestic markets that can partly insulate them from the ups and down of global business cycles. In fact, what attracts foreign investors to populous countries like Indonesia and Vietnam is the large domestic market comprised mostly of young people.

Rapid industrialization will be accompanied by increasing urbanization. According to McKinsey & Company, China will have 219 cities with at least one million people each by 2025, compared with 35 in Europe today. These trends will lead to an increasing share of Asia in global output. It is estimated that the combined size of the Asian economies could reach $22 trillion to $24 trillion by the end of this decade. Despite this huge expansion in GDP, however, there will continue to be a wide gap in per capita incomes by 2020. The average Chinese is likely to earn less than one-sixth of an American’s salary. It must be remembered that it is not merely the absorption of labor but productivity gain that narrows the income differential between rich and poor.

These are all opportunities which could be missed if the countries in Asia do not get their policies right in exploiting the so-called demographic dividend. Within Asia, there is huge diversity in the way human capital formation is being pursued. Intra-regional and racial inequalities are key concerns for both Beijing and New Delhi. A special challenge exists in Muslim countries that have a large and young population but with low levels of human development. Even more important than improving physical infrastructures is investment in human capital, especially in high-quality basic education for the poor.

Employment opportunities for OFWs with above-average levels of education and technical training will abound in aging Asian societies like South Korea, Taiwan, Singapore, and Hong Kong. Those in management and the professions can leverage on their English proficiency and technical skills by seeking employment in such countries as Vietnam, Indonesia, Myanmar, Cambodia, and other Asian emerging markets where there is still a dearth of English-speaking professionals who can manage multinational enterprises from all over the world. For example, there are more than 2,000 Filipino managers working in Vietnamese enterprises. This is a repeat of what happened in Indonesia during the last century when Filipino accountants and managers were employed by a good number of the top Indonesian corporations. If OFWs in the professions are considering to work in China, it would be a plus for them if they learn some conversational Mandarin, which will increasingly compete with English as the international business language in Asia. –Dr. Bernardo M. Villegas, INQUIRER.net

For comments, my email address is bvillegas@uap.edu.ph.