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Bridging infrastructure and skills gaps in the Philippines and the rest of Southeast Asia is crucial for the region to bounce back from the pandemic in a more sustainable and inclusive manner, according to a report by Philippine Star.
In a working paper, Tokyo-based Asian Development Bank Institute (ADBI), the multilateral lender’s think tank, said many economies in Asia, including ASEAN and even China and India, have a lot of catching up to do in terms of economic significance.
This even as about 55 percent of the global population is in Asia and even as the region is gaining traction in economic development.
Authors Cyn-young Park and Bernard Yeung said infrastructure, education and skills, and market institutions and governance are some of the gaps in the Philippines and in the region that need to be addressed.
Park and Yeung emphasized that ASEAN needs to invest more in infrastructure and upgrade its quality.
“The lack of an adequate supply of water, drainage, power, railroads, highways, piers, and airports will continue to cause under-utilization of resources, including labor, stifle productivity, and constrain growth in ASEAN,” they said.
“ASEAN needs to build waterway infrastructure and other similar infrastructure to protect property and lives. Improved living conditions and protection for physical property, just like the power supply, attract both plant development and outside professionals to build businesses,” the ADB economists said.
To power manufacturing and to meet rising consumption needs, ASEAN has to invest about $490 billion cumulatively between 2025 and 2030 under the Sustainable Development Scenario.
Further, Park and Yeung noted that as the region makes great strides in development, there is an increasing demand for skills, innovation, and knowledge.
ASEAN countries have a mixed degree of educational attainment, which means many have attained a reasonably high level, although some still need to catch up.
“The gap is much more significant in terms of tertiary school enrollment. To become a valued part of the value chains that developed countries lead and to advance in development, the region must continue to improve the education quality and skills training to meet the growing demand for skills,” they said.
“That means that the educational attainment level, especially in science, technology, engineering, and math areas, has to catch up with countries with a higher level of development,” they added.
Moreover, the experts argued that starting a business in ASEAN, except Singapore and Brunei, is challenging. Businesses in Brunei, Vietnam, Philippines, Cambodia, Laos and Myanmar also have low access to credit.
Indonesia, Philippines, Cambodia, Laos, meanwhile, can use improvements in enforcing contracts while the whole region should make trading across borders much easier.
“ASEAN countries, except for Singapore, need to improve their business environment significantly, especially the institutional quality. They must all also put more effort into facilitating cross-border trade,” they said.
The experts maintained that the potential of economic benefits from regional integration is huge, given the economic and demographic diversity across the region.
“Many countries have an abundance of labor and idle laborers. ASEAN remains young, and its population is still growing. It has a strong desire to develop,” they said.