Developing Asian countries must invest in the education and training of young people to boost the prospects for enhanced long-term economic growth, an Asian Development Bank (ADB) report said Wednesday. ( dpa )
In its annual Asian Development Outlook report, the Manila-based bank said Asian countries could reap the "demographic dividend" if education and training systems can equip the youth with skills needed in rapidly modernizing economies.
The report said the high number of young adults in developing Asia or the "youth bulge" has the potential "to stimulate economic growth through productive employment, asset creation and investment."
"When young people are productively employed, they can lift per capital income; and as they grow older, accumulate assets and invest, they can generate higher national income," it said.
"If young workers embody higher skills and knowledge levels as a consequence of earlier investments in human capital, this will boost productivity too," it added.
ADB chief economist Ifzal Ali, however, stressed that the "growth opportunity must be harvested within the next two or three decades."
"To redeem this demographic dividend, countries have to put in place an enabling policy environment and strengthen the institutional framework," he said.
The ADB report warned that the youth bulge will start to shrink around 2010, and by 2040 the percentage of young people in the total population will be about 14 per cent, down from 20 per cent in 2005.
"Before the bulge begins to disappear, it is vital that economies create productive and sustainable jobs for the young," the report said. "Failure to do this will not only crimp growth now, it will also undermine an economy's ability to support a larger dependent population in the future."
But youth unemployment and joblessness are on the rise, the report noted.
"In developing Asia as a whole, only about 60 per cent of young men and 40 per cent of young women are employed," it said.
The report blamed the lack of education and poor quality training for increasingly pushing impoverished, young workers into lowly-paid jobs in the informal sectors.
To avoid squandering the talents of the youth, the ADB urged governments to boost the relevance and quality of school curricula, provide support for vocational training, and help kickstart job schemes that impart useful skills.
Boosting the education system would also help fix a serious shortage of skilled workers in Asia, which could raise costs of businesses, hobble productivity of industries and eventually constrain growth of the wider economy, the bank said.
" Asia lacks a wide class of occupational skills relevant to a modern economy, and areas that are critical to growth are seeing large and growing mismatches between the skills that employers need and the skills that employees have," the ADB said.
To fill in the gaps, the bank said governments can also take steps to stem the "brain drain," encourage Asian emigrants to return home, raise retirement ages, and make it easier for skilled non-Asians to live and work in the region.