SHAPING THE FUTURE HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT

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 THE 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
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