SHAPING THE FUTURE HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT

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a new income distribution plan in 2013, and emphasized the importance of job creation and income distribution in its 12th five-year plan (2011-2015). The Philippines Development Plan 2011-2016 similarly stresses the need for inclusive growth, productive job creation and multidimensional poverty reduction. Papua New Guinea’s Development Strategic Plan 2010- 2030 charts the vision of a fair and equitable society where benefits reach all segments of the population. 42 One of the key national policy instruments to tackle pervasive low wages is wage-setting, which protects the basic needs of workers and their families. It curbs poverty, and ensures a basic quality of life by eradicating hunger, providing minimum health benefits, and easing access to education and childcare, all of which positively contribute to human well-being and workers’ productivity. The entire package of a minimum wage policy needs to be carefully crafted to mitigate impacts on employment, international competitiveness and inflation. Since 2012, more than 20 Asia-Pacific countries have revised their minimum wage policies, including China, Indonesia, Malaysia, Philippines, Thailand and Viet Nam (Box 2.6). In 2013, Malaysia’s new minimum wage increased the basic salary to RM 900 per month in the Malaysian Peninsula and to RM 800 per month in Sabah and Sarawak, with the aim of supporting inclusive growth as the country plans to transition from middle-income to higher-income status. In Viet Nam, soaring inflation of 23 percent in 2008 triggered a rise in minimum wages. Since then, several increases have helped workers keep up with high prices for food, education and health care, and served as a response to strikes by factory workers in Hanoi and elsewhere. 43 BOX 2.6: Recent revisions to minimum wage packages Minimum wage policies need to be crafted without adverse impacts on employment, competitiveness or inflation CHINA USES <strong>THE</strong> MINIMUM WAGE TO REDUCE GAPS AND ENCOURAGE MOVEMENT TO CITIES As part of its efforts to reduce wage gaps between the rich and poor, China has been paying close attention to minimum wages since 2008. City and provincial governments set the minimum wage every two years, ensuring a cost-of-living adjustment and adhering to a nationwide increase. This also supports the national plan for moving more rural workers to cities, where labour productivity and contribution to GDP is much higher. In the first quarter of 2014, minimum wages rose in the cities of Shanghai, Shenzhen, Tianjin and Beijing, with Shanghai minimum-wage earners bringing home the highest pay at $293 per month. Shandong, Shaanxi and Chongqing provinces have also increased minimum wages recently. Local governments in places that face labour shortages will likely follow the same course. 44 THAILAND AIMS FOR INCLUSION WHILE EASING IMPACTS ON BUSINESS In 2013, Thailand implemented a new minimum wage policy of 300 baht a day ($10). In a time of high growth and low unemployment, the revised policy is intended to boost worker productivity, increase consumption and drive innovation without severely aggravating unemployment. It is also part of Thailand’s efforts to ensure greater equality, enhance inclusiveness and enable the country to avoid the much dreaded middle-income trap. The policy will equate wages across all provinces, and therefore some provinces will see a significant hike. While it will protect marginalized, low-income people, costs will inevitably rise for businesses, particularly small and medium enterprises in provincial areas, and will increase the prices of Thai products in global markets. The Government is taking proactive measures to counter these impacts by curbing the corporate tax from 30 percent to 20 percent, increasing provisions for lower interest government loans and reducing rents for stateowned land used by businesses. It also anticipates that competition will increase, and in turn bolster efficiency in production, incentivize skill-building especially for low-skill workers, and support the economy in moving towards products requiring higher-skills. 45 72 Sources: Center for Migrant Advocacy 2011, The Philippine Migrants Watch, ILO 2014b, China Briefing 2014, The Asia Foundation 2013.
Promote health and safety at work: Asia-Pacific has a history of fatal injuries caused by fire, chemical exposure, building collapse and other disasters at factories leading to death in large numbers. Thirty years ago, the Bhopal gas leak took about 15,000 lives in India. More recently, in 2013, Bangladesh experienced its largest factory disaster after the collapse of a garment factory. Over 1,129 garment workers were killed, and 2,500 or more were permanently injured. In 2014, an explosion at a metal factory in eastern China killed 68 people and injured more than 150. Negligent management is a leading cause for accidents such as these, but little has been done to severely penalize, warn or otherwise instil upon firms the importance of avoiding future accidents. Because of the abundance of low-skilled labourers, many Asia-Pacific countries are attractive locations for low-cost production. To reap excess profits, producers compromise on safety standards and labour laws, particularly where these are not well enforced, in a ‘race to the bottom’. Working can be riskiest in the least developed countries, which frequently attract the most dangerous and polluting work, and where standards and regulations have been compromised to be able to produce more cheaply. Governments need to work closely with the international community, businesses, non-governmental organizations and employees on coordinated efforts to move towards safe, reliable and accident-free workplaces. National legislation on occupational safety and health is the first institutional step forward. Laws should cover risk assessment, hazard identification and bodies responsible for taking action. Several countries have begun to strengthen laws and compliance (Box 2.7). INCREASE LABOUR PRODUCTIVITY AND ENHANCE <strong>THE</strong> QUALITY OF JOBS While many countries in Asia-Pacific have been sources for low-cost labour, this tendency has to change for them to attain higher human development and avoid a middle-income trap. They will have to compete on the basis of higher productivity and efficiency, in part by shifting from low-wage, labour-intensive sectors to those requiring higher skills and advancing technological penetration. Higher productivity growth will also provide quality jobs for better educated workforces, and, in ageing countries, help maintain growth rates despite shrinking labour forces. Stimulate structural transformation: Productivity growth has been faster in some countries than others, tracking structural shifts from lower to higher productivity industries, and the movement of labour accordingly. China’s labour productivity has trebled since 2000, and Viet Nam’s has doubled. Substantial growth has occurred in Indonesia, Malaysia, Mongolia and Thailand. By contrast, in South Asia, structural change has lagged behind, as has growth in labour productivity. 46 National circumstances are the starting point for the shift to higher productivity industries. Countries that still have a large agriculture sector must foster basic manufacturing, while introducing modern farming practices. Those producing light manufactured goods such as textiles and footwear may consider moving towards heavy manufactured goods such as electronics and machinery. There is significant potential for promoting higher skilled services sectors, such as IT and telecommunications, banking and finance, tourism and hotel management, media and advertising, and other new areas of high-end advisory and consulting services that can absorb more skilled labour. Governments will need to support entrepreneurs keen to launch innovative businesses, as well as develop strategic trade links to market products and services. Malaysia’s experience with the palm oil industry demonstrates the potential of structural transformation (Box 2.8). Promote skills and training: Employability and productivity improve through skills development and vocational training relevant to labour market requirements. Some important lessons come from advanced countries such as Germany, where education and training simultaneously have improved the quality of youth employment in particular. Germany’s ratio of youth to adult unemployment rates is about one to one, which is a remarkable achievement. One important ingredient is the strong involvement of employers in education, which brings in training on skills Skills development and vocational training increase productivity 73
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ASIA-PACIFIC HUMAN DEVELOPMENT REPO
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ASIA-PACIFIC HUMAN DEVELOPMENT REPO
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FOREWORD We live in times of great
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ACKNOWLEDGEMENTS The Asia-Pacific H
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Table of Contents Foreword iii Pref
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1.15 Population age-composition is
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Acronyms ADB Asian Development Bank
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Overview SHAPING THE FUTURE: HOW CH
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HUMAN DEVELOPMENT IN ASIA-PACIFIC:
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FIGURE 2: Wealthier countries tend
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a strong emphasis on protecting wor
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could provide job matching assistan
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Asia-Pacific leave the workforce at
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WHAT’S AHEAD IN THIS REPORT This
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Chapter 1 HOW CHANGING DEMOGRAPHICS
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sustainable, reaching everyone whil
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FIGURE 1.1: The Human Development I
Page 36 and 37: TABLE 1.1: Asia-Pacific still has l
Page 38 and 39: married couples to have children, a
Page 40 and 41: FIGURE 1.5: Population pyramids in
Page 42 and 43: FIGURE 1.8: The median age is high
Page 44 and 45: FIGURE 1.10: Disparities in fertili
Page 46 and 47: Improved overall human development
Page 48 and 49: TABLE 1.5: Countries in Asia-Pacifi
Page 50 and 51: “When relatively large generation
Page 52 and 53: 38 Having fewer dependents on worki
Page 54 and 55: 40 In developed Asia- Pacific, the
Page 56 and 57: TABLE 1.6: Demographic dividends fl
Page 58 and 59: 44
Page 61 and 62: 2. MORE PEOPLE AT WORK: THE FOUNDAT
Page 63 and 64: encouraged labour-intensive industr
Page 65 and 66: FIGURE 2.3: Peaks within subregions
Page 67 and 68: A DEMOGRAPHIC RETURN FOR HUMAN DEVE
Page 69 and 70: BOX 2.1: Women bear a larger burden
Page 71 and 72: FIGURE 2.8: Growth in labour produc
Page 73 and 74: WHAT’S BEEN LEARNED IN CHINA, JAP
Page 75 and 76: FIGURE 2.13: Japan is past its work
Page 77 and 78: FIGURE 2.15: Thailand still has tim
Page 79 and 80: make this a key aim of national dev
Page 81 and 82: investment climate, as well as enco
Page 83 and 84: TABLE 2.4: Shares of workers in the
Page 85: Even before leaving home, migrant w
Page 89 and 90: BOX 2.8: Malaysia transforms an ind
Page 91 and 92: of resilient infrastructure are joi
Page 93: Chapter 3 NURTURING CHILDREN, UNLOC
Page 96 and 97: Asia-Pacific is home to 1.7 billion
Page 98 and 99: Commendable progress in education m
Page 100 and 101: Quality primary education mitigates
Page 102 and 103: In most Asia-Pacific countries, sec
Page 104 and 105: Strong tertiary education is a buil
Page 106 and 107: FIGURE 3.3: Access to tertiary educ
Page 108 and 109: 94 TABLE 3.9: Youth illiteracy has
Page 110 and 111: TABLE 3.11: Child mortality rates b
Page 112 and 113: BOX 3.7: Malnutrition and disabilit
Page 114 and 115: Despite social and economic progres
Page 116 and 117: FIGURE 3.8: The share of youth who
Page 118 and 119: 104 Young migrants are highly vulne
Page 120 and 121: as an important challenge. But they
Page 122 and 123: TABLE 3.15: Some countries with lar
Page 124 and 125: Immunization saves children’s liv
Page 126 and 127: BOX 3.10: Germany’s vocational tr
Page 128 and 129: BOX 3.12: Partnering with youth in
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Page 133 and 134: 4. AGEING SOCIETIES: NEW OPPORTUNIT
Page 135 and 136: FIGURE 4.1: Asia-Pacific is one of
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TABLE 4.1: East Asia is the oldest
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BOX 4.2: Responses to poverty among
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BOX 4.3: A plan of action for older
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FIGURE 4.9: Per capita health-care
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BOX 4.5: China moves towards univer
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TABLE 4.3: Social pensions are an i
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FIGURE 4.12: Pension replacement ra
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BOX 4.7: Increasing links between p
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cupy space in some public buildings
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ment bodies, encourage regular inte
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BOX 4.9: Ageing countries begin enc
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help coordinate the work of other g
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for older people. Many advanced cou
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action. Free public transport, and
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Chapter 5 TAPPING THE HUMAN DYNAMIS
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In the last 30 years, Asia-Pacific
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FIGURE 5.3: Even countries with few
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FIGURE 5.6: Most people will contin
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160 Social, cultural and economic i
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The benefits of urbanization have n
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BOX 5.2: Pioneering urban poverty r
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vehicles on the road. Beijing issue
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Municipal governments in Asia-Pacif
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TABLE 5.4: Revenue mobilization opt
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172 City governments need to have t
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Investing in essential infrastructu
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176 in East Asian cities, and occur
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BOX 5.9: The Republic of Korea emba
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180
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6. AN AGENDA FOR ACTION: SHAPING TH
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Development Report argues, decent w
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with ministries overseeing youth, e
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This is an urgent priority in a reg
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SUSTAINING HUMAN DEVELOPMENT ACROSS
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plan automatically enrols people in
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BOX 6.3: Developing Delhi’s metro
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End Notes CHAPTER 1 1. UNFPA 2014b.
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63. WHO 2014b. 64. UNFPA 2012. 65.
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produces 40 percent of total econom
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206 The Asia Foundation. 2013. “T
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208 CODI (Community Organizations D
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210 Global Migration Group. 2014.
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212 Janwani. 2010. “Annual Report
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214 ———. 2012a. OECD Employme
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216 ———. 2011. “Follow-up t
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218 York. [www.unfpa.org/sites/defa
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———. 2012c. Malaysia Economic
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tables include the Caribbean countr
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224
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TABLE 2: Trends in the Human Develo
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TABLE 4: Gender Inequality Index 22
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TABLE 6: Trends in income poverty,
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TABLE 8: Fertility rate and crude d
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TABLE 10: Trends and share of child
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TABLE 12: Trends and share of young
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TABLE 14: Trends and share of older
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TABLE 16: Education indicators and
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TABLE 17: Health indicators 242
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TABLE 18: Employment and unemployme
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TABLE 19: International trade, fina
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ABOUT ASIA-PACIFIC HUMAN DEVELOPMEN
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