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Understanding youth unemployment and its impact on Asean

24 10 9
04.02.2019

IN recent years, Southeast Asia has seen a surge in demand for a skilled workforce able to fill looming gaps in industries dependent on new and emerging technologies.

Unfortunately, the supply of such talents in the current labour market has largely fallen short.

As the wider Asian region deals with ageing populations and massive migratory shifts, The Economist predicted an “impending collapse” of the Asian workforce as governments struggle with developing human capital.

To strike a balance in its working populations, Southeast Asia reportedly needs to attract six million workers. By 2030, Thailand would be in dire need of workers between the ages of 15 and 64 and the same goes for neighbouring Singapore, Malaysia and Vietnam.

Trends over the past decade, however, paint a worrying picture, as close to 50 percent of Asian employers found hiring to be difficult amid a backdrop of the highest global talent shortage since 2007.

Structural problem

While there is high demand for skilled employees, graduates in the region often don’t measure up, leading to youth unemployment.

In Southeast Asia in 2017, youth unemployment was lowest in Singapore at 4.6 percent, followed by Thailand’s 5.9 percent, Vietnam’s 7 percent and the Philippines’ 7.9 percent, Malaysia’s 10.8 percent and Indonesia’s 15.6 percent.

Commenting on Malaysia’s situation recently, local politician Yeoh Bee Yin noted that the country’s youth unemployment rate is up to three times higher than the national unemployment rate (3.17 percent in 2017). For comparison, 10 out of every 100 youths are unemployed while the same is true for only three in every 100 workers of all ages.

There’s a growing skills mismatch in Asean’s labour market. Source: Shutterstock

She noted that one in four graduates has remained jobless six months after graduation.

“This implies that our tertiary institutions are not producing the workforce that is........

© Asian Correspondent