Human Resource Development

Human Resource Development in SAARC Region: An analysis Khan Sarfaraz Ali

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Abstract Development and success of an organization as well as a country largely depends upon the creative skills and abilities of its human resources. In this article the HRD issues in Asia has been described elaborately. That emphasizes on the importance of HRD to enterprises and countries in the modern world. Developing countries in Asia and the Pacific will be the focus in this article. The regional diversity in terms of natural resources, culture, political institutions and levels of economic development, common issues and challenges affecting several or more developing countries will be identified and discussed. The education and training issues and challenges will be dealt with from the perspective of employers and their organizations. Thus the pedagogical aspects of education and training, which are of interest to educationists, will be left out. In terms of time frame, the period to be covered will be the present into the 21st century.

Introduction

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The term Human Resources Development (HRD) means the integrated use of training and development, organization development, and career development to improve individual, group, and organizational effectiveness (The American Society for Training and Development). HRD aims to improve individual, group and organizational effectiveness and covers the development of people through education and training in a national context as well as within enterprises. HRD in an integrated sense also encompasses health care, nutrition, population policies and employment.1 There is a long felt need for policymakers, development practitioners, policy analysts and academicians in Asia-Pacific to build a network for sharing the professional experiences, building up partnerships in the process of socio-economic development and implementing HRD related programmes in this region.

Associate Management Counselor, Bangladesh Institute of Management (BIM), [email protected] / 880-1817528067 1

The Bangladesh Observer. Dhaka. April 07, 2006

Methodology This article has been developed on the basis of secondary data as well as various types of journals, articles, literatures, research books and development reports. Relevant information also acquired through different websites in this field.

Human Resources Development in Asia and Pacific Asia and Pacific is a vast region with economies at different stages of growth. In the southeast are the more than two-dozen Polynesian, Melanesian and Micronesian island economies of the South Pacific. Many have "narrow production bases, a subsistence sector which supports the bulk of the population and a small organized sector comprised government, local units of foreign companies and banks and other financial institutions". Papua New Guinea has the largest developing South Pacific island economy with mining an important industry. Smaller though large in South Pacific terms is the Fijian economy, which is more diversified with its sugar, timber processing, and garment and tourism industries. Before 2008, the GDP fell by 4.3% in the South Pacific island economies, largely because of a 4.8% decline in GDP for Papua New Guinea. Output in most other Pacific islands grew by only 2-4% while that of Western Samoa grew by 6.7%. It is unlikely that the Pacific island economies will grow more than 2 to 4 % annually over the next two years.2 Hong Kong, the Republic of Korea (hereafter referred to as South Korea), Singapore and Taiwan most of these countries have a major manufacturing industry producing middle technology products and a sizeable service sector. These so called "dragon" economies, which have grown rapidly in the last two decades, grew by 10-12% in 2008. They have continued to follow prudent macro-economic policies combined with increasing openness. Most are upgrading their manufacturing industry to produce higher technology and more knowledge intensive products. South Korea, Singapore and Taiwan, are expected to grow between 12-14% per annum for 2006 and 2007. Moving southeast wards are the industrializing and fast growing Southeast Asian economies of Indonesia, Malaysia, Philippines and Thailand characterized by the growing importance of their manufacturing industry producing labor intensive to medium skill products, the decline in importance of agriculture and a growing service sector. Among them are the so-called "tiger" economies of Indonesia, Malaysia and Thailand, which before 2008 grew at over 10%. The newer countries are expected to grow at 9% per annum for 2006and 2007. The Philippines on the other hand are

2

Proshikhyan. Journal of Training and Development Vo:13, No:2, July-December, 2005

expected to be around 9% per annum.3 The Southeast Asian economies will industrialize further, upgrading their labor-intensive manufacturing industry to higher technology and more capital-intensive products. China, Mongolia, Laos, Myanmar and Vietnam are countries in transition to a market economy. These economies are industrializing with labor intensive and lower technology manufacturing. Leading the transition to a market economy is China, which also holds the distinction of being the fastest growing economy in the world with output growing by 15% in 2007. Growth for the next two years will be about 15% annually per year. Mongolia, which only began its transition to a market economy in the 1990s, grew by 12% in 2007. Vietnam grew at 12-14% while the other countries grew by more than 8%. To the west are the South Asian economies of India, Pakistan, Bangladesh, Sri Lanka, and Nepal. Most of these countries have started opening their economies and introducing pro-market reforms from the early 1990s. They are also industrializing with labor intensive and lower technology manufacturing. Growth before 2007 was 6-8% with India growing at 8% and Nepal only 6%. Over the next two years they are likely to grow at around 8-9% per annum.4 Controversy surrounds the sustainability of the high growth of the Asian region in the future. The World Bank is however optimistic. Its baseline forecast expects GDP in East Asia to grow about 7.3 % per annum and about 5.3% per annum for South Asia for the rest of the 1990s to the year 2002. On the other hand, the ADB is of the view that the high overall growth of the Asian region is sustainable for about two to three decades based on the complementary between the capital abundance of Japan and the others and the labor abundance of the rest of Asia being exploited and subject to the individual economies being open to allow cross border flows of capital, labor, commodities and technologies. Economic growth though high will be lower than in the past and will not be uniform, across the region. Competitiveness of both nations and enterprises will be on an international basis. Worldwide competition has increased, the pace of economic change has accelerated and the process of development has become less predictable. Competitiveness will be decided on a country's or an enterprise's capacity to add value to global economic products, services and processes. A key contributor in this regard is the knowledge and skills of the workforce. In fact the education and skills of the workforce will be the key competitive weapon for the rest of the 1990s as well as for the 21st century.

3 4

World Development Report 2008 Human Development Report 2007

Following table shows the Population in Asia and The Pacific:5 Countries/Economies

Projected Population (In millions)

Rate of Natural Increase

% of Population (In millions)

2025

2050

(%)

Govt. View

<15

65>

1

Bangladesh

190.0

231.0

1.9

Too High

35

3

2

China

1476.0

1437.0

0.6

Satisfactory

22

8

3

Hong Kong

7.9

8.8

0.2

-

15

12

5

India

1363.0

1628.0

1.7

Too High

36

4

6

Indonesia

275.4

308.4

1.6

Too High

30

5

7

Korea, North

25.8

26.4

0.9

Satisfactory

27

8

8

Korea, South

49.8

42.3

0.5

Too Low

19

9

9

Malaysia

36.1

47.0

2.1

Satisfactory

33

5

10

Mongolia

3.4

3.9

1.6

Satisfactory

31

4

11

Myanmar

59.0

63.7

1.2

Satisfactory

29

5

12

Nepal

36.1

47.8

2.2

Too High

39

4

13

Pakistan

228.8

295.0

0.4

Too High

42

4

14

Taiwan

23.6

19.8

0.4

Too low

19

9

15

Philippines

115.7

142.2

2.3

Too High

35

4

16

Singapore

5.1

5.2

0.6

Too low

20

8

17

Sri Lanka

22.2

22.4

1.3

Satisfactory

27

6

18

Thailand

70.2

73.2

0.7

Satisfactory

23

7

19

Vietnam

103.2

115.4

1.3

Too High

29

7

Globalization One major trend with implications for HRD is globalization. It is fostered not only by technological change and the continually falling costs of communication and transport but also by the decisions of developing countries in Asia and the Pacific and elsewhere to embrace market oriented development strategies and to open their countries increasingly to the world economy. The world is thus fast becoming one interdependent global market place.

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Source: Population Reference Bureau, World Population Data Sheet, 2005-2006

Competitiveness of both nations and enterprises will be on an international basis. Worldwide competition has increased, the pace of economic change has accelerated and the process of development has become less predictable. Competitiveness will be decided on a country's or an enterprise's capacity to add value to global economic products, services and processes. A key contributor in this regard is the knowledge and skills of the workforce. In fact the education and skills of the workforce will be the key competitive weapon for the rest of the 1990s as well as for the 21st century. Globalization impacts on HRD in various ways. Thus compared to the past, enterprises will need to update much more regularly the skills mix of their employees to respond to the opportunities or threats created by globalization and rapid technological change. Indeed intense global competition is reconfiguring the market place. Enterprises increasingly have to compete by differentiating themselves from their competitors by the quality of the human systems and processes behind their products and services. The attitudes, knowledge and skills of the workforce of the enterprise and its contractors and suppliers will determine the quality of the human system and processes behind its products and services. Competition will be less and less in terms of how the features and benefits of one's product/services compare with those of another as more products are perceived to be at parity by customers (product convergence).

Economic Restructuring Economic restructuring by countries with changing comparative advantage will be another trend. Enterprises will also restructure regularly in the increasingly competitive marketplace as they seek to secure a competitive edge over their rivals. Thus as China moves into labor intensive manufacturing, it will compete with countries like Indonesia, and Thailand which will have to adjust by moving into medium technology manufacturing. Such restructuring will necessitate changes in education and training both at macro and enterprise levels.

Following table shows the distribution of GDP (%) in the economies of Asia and The Pacific:6

6

Human Development Report 2005-2006, UNDP

GDP per capita Country/Economy

Imports of goods and services (% of GDP)

Exports of goods Public expenditure and services on Education (% of GDP) (% of GDP)

Public expenditure on Health (% of GDP)

US $ 2003

PPP US $ 2003

1990

2003

1990

2003

1990

2000-02

1990

2002

1 Bangladesh

376

1770

14

20

6

14

1.5

2.4

0.8

0.8

2 China

1100

5003

14

32

18

34

2.3

..

2.0

2.0

3 Fiji

2438

5880

67

66

62

73

4.7

5.6

2.7

2.7

4 Hong Kong

22987

27179

124

161

132

170

2.8

4.4

..

..

5 India

564

2892

9

16

7

14

3.7

4.1

1.3

1.3

6 Indonesia

970

3361

24

26

25

31

1.0

1.2

1.2

1.2

7 Korea

12634

17971

29

36

28

38

3.3

4.2

2.6

2.6

8 Bhutan

797

..

32

43

28

22

..

5.2

4.1

4.1

9 Malaysia

4187

9512

72

93

75

114

5.1

8.1

2.0

2.0

10 Nepal

237

1420

22

29

11

17

2.0

3.4

1.4

1.4

11 Pakistan

555

2097

23

20

16

20

2.6

1.8

1.1

1.1

12 Singapore

21492

24481

..

..

..

..

3.1

..

1.3

1.3

13 Sri Lanka

948

3778

38

42

29

36

2.7

..

1.8

1.8

Changing Organizational Structures and Work Patterns Changing organizational structures and work patterns are another trend. The company of the future, according to Charles Handy, will be a shamrock organization. The shamrock organizations will have the following three elements: i. a small and essential core group of professionals, technicians and managers; ii. a group of sub-contractors who produce goods and services which the core group does not have to; and iii. a growing group of temporary and part-time workers who are hired to provide specialized services or to help at peak workloads. Organizations in the industrialized countries are increasingly becoming shamrock organizations. Shamrock organizations will emerge in developing countries in Asia and the Pacific. For example the Singapore National Trades Union Congress (NTUC) in a study on employment structure and its impact on union membership has pointed out that the shamrock organization is already taking shape in Singapore. The small core of professionals, technicians and managers will need to be the focus for human resource management. More investment in the management and training of part-time and temporary workers will also be required.

Technological changes Technological changes, especially information technology and telecommunications, and competition in the fast moving competitive global marketplace have changed work organizations and working patterns. The production of goods and services has become flexible and customized instead of being mass-produced in long production lines. Fixed automation involving repetitive tasks is being replaced by flexible automation. On-line quality control has replaced end-of-line checking. Instead of fragmentation of tasks, increasing use is made of teams and multi-skilled workers. Decision-making is being decentralized to points of production and sale. Employees now need a much wider complement of skills than was the case in the previous traditional slower moving hierarchical organization with clear chains of command and "thinkers" at the top and "doers" at the bottom. These work pattern changes are already taking place in the industrialized world. They are also increasingly affecting enterprises in the developing countries of the Asia and Pacific region. Human resource development policies and programmes will have to change in response to these changes.

Strengthening Primary and Secondary Education Primary schooling or less may suffice for lower level manufacturing involving single task machines with workers performing one or a set of repetitive tasks. But secondary education will be required for medium and high level manufacturing, which Asian and Pacific developing countries are aiming for. Strengthening primary and secondary education is a key HRD challenge in the developing countries of Asia and the Pacific. Developing countries in the region have generally made good progress in primary schooling. Many have achieved near or complete universal primary education. A few need to expand their primary school enrolment. A number of Asian and Pacific countries have to raise their primary school completion rate. Thus in South Asia only Sri Lanka had more than 90% of the primary school cohort-reaching grade 4. The situation will worsen if the relatively high rate of population growth of most South Asian countries continues. In South Asia, the primary school age population is projected to increase by 28 million between the years 1990 to 2010. As regards the South Pacific, Papua New Guinea's school-age population is expected to increase by a third between 1990 and 2010. To improve the quantity and quality of its education, Papua New Guinea will have to raise its already high expenditure on education and increase the efficiency of its education expenditure.

In many developing countries in the region more can be done to improve the quality of primary school education. Crucial to the quality of schools appears to be the qualifications, experience, knowledge, level of education of teachers and more and better textbooks and materials. In this regard it is interesting to note that Hong Kong had since 1992 introduced degree courses for primary school teachers to upgrade their quality. It had graduate teachers in primary schools for the first time in September 1994. It aims to have 35% of graduates in primary schools by the Year 2006. The pupil-teacher ratio should also be improved. This ratio for industrialized countries before 2006 was 20 for primary schools whereas for many of the Asian and Pacific countries it was much higher. Secondary school enrolment needs to be expanded for many of the developing Asian and Pacific countries. The average percentage of age group enrolled in secondary schools for five industrialized countries (Australia, New Zealand, France, Sweden and United Kingdom) was 92% by 2006. Except for a handful, most developing Asian and Pacific countries have less than 50% of the age group enrolled in secondary schools. Furthermore greater efforts should be made to improve the quality of secondary education. The pupil-teacher ratio should be improved. This ratio by 2006 for industrialized countries was 16 whereas for some Asian and Pacific countries it was above 20. There is a need to reduce the number of dropouts. The school curriculum should be revised to ensure that it not only caters for the academically less inclined but also prepares them for the world of work. Most developing Asian and Pacific countries have low adult illiteracy rates however a small number have high adult illiteracy rates of over 40%. Most of them are in South Asia. A sizeable proportion of the workforce of many developing countries of Asia and the Pacific is poorly educated. Before the year 2005, the percentage of the workforce with only primary or lower qualifications was 43.2% for Singapore. In the case of Indonesia, in the same period of time, 72.1% of its workforce had primary or no schooling. 78.7% males and 95.0% females of the Indian rural workforce had only up to primary education or were illiterate by 2005. In the case of the Indian urban workforce, 51.2% males and 74.0% females had only up to primary education or were illiterate.7

Expanding and improving in-Service Training Training by organizations is cost-effective and efficient. Such training, which should be structured and planned, can be on or off the job. Training in enterprises should be linked to its strategic plan and be based on a training needs analysis of the enterprise. 7

World Population Data Sheet 2006

On-the-job training (OJT) is one training mode used by companies. Enterprises use OJT because it provides the specific skills needed for job performance. Unlike other training systems, it enables the enterprise to quickly change the skills required if there are changes in technology, work processes and product lines. OJT is a good training option for smaller companies. Such companies cannot release their employees for training during working hours especially if there is a tight labor market. Their employees are invariably unable to train after office hours, as they need to work overtime or at another job to supplement their low basic wages. Where OJT is conducted in Asia and the Pacific, it tends to be structured in large companies, whereas in smaller local companies it is unstructured. A research project conducted by The Asian Productivity Organization (APO) in the late 20th emphasized on HRD issues in twelve Asian economies including a firm level survey of corporate HRD policies and practices. The survey of firms in eight developing economies viz. Hong Kong, India, Indonesia, South Korea, Nepal, Pakistan, the Philippines and Taiwan revealed scope for improvement and expansion of OJT. For example, in Hong Kong formal and systematic training was neglected in local firms. About a third of companies surveyed carried out OJT according to a companywide plan, 36% conducted OJT only on the initiative of each division and 27% conducted OJT only when necessary. A small number of companies did not have OJT. Self-learning and observing seniors were more widely adopted while learning through exposure to various jobs was in general underutilized. In Indonesia's case, there were still many companies, which did not see training as a basic need or as a strategy to compete. OJT was not widely done. Where practiced, OJT was conducted only in each division and not according to a companywide plan. In Pakistan more than 60% of the companies surveyed did not have any corporate policy for HRD. 35.8% of firms carried out OJT according to a plan, 17.6% did it on the initiative of each division, and 40.8% carried it out as and when necessary and about 6% did not practice it at all. The majority of employees acquired skills and knowledge by self learning and observing. OJT in enterprises in Asia and Pacific can be improved.8 A national programme to improve and expand OJT, involving the government, enterprises and the relevant training body, is worth looking into.

HRD in SAARC Region The significance of Human Resource in socio-economic development of the region has been recognized since the inception of SAARC. The leaders at the First SAARC Summit in 1985 reaffirmed that their fundamental goal was to accelerate the process 8

The Bangladesh Observer. April 07, 2006

of economic and social development through the optimum utilization of human and material resources to promote the welfare and prosperity of people and to improve their quality of life. At the Second Summit in 1986, the leaders recognized that meeting the needs of children was the principal means of human resource development. They decided that children should be given highest priority in national development planning. The leaders recognized at the Fourth Summit in 1988 that HRD was one of the means of achieve the objectives of SAARC. In this context they welcomed the offer of Pakistan to host the SAARC Human Resource Development Center in Islamabad. The Center undertakes research, imparts training, and disseminates information on HRD issues and advises Member States on HRD related policies and strategies. SAARC countries have been cooperating in the development of various dimensions of human resource. Such cooperation started as early as August 1982 in the fields of sports, arts and culture. In 1998, the SAARC leaders decided to include education in the agreed areas of cooperation and a Technical Committee was formed to deal with the principal area requiring urgent attention in the region. This Technical Committee was re-organized in 1992. The further re-structuring of the SAARC Integrated Programme of Action (SIPA) in 1999 resulted in the creation of the Technical Committee on Human Resource Development. This was reconstituted in January 2004 to deal with matters pertaining to education, skill development, arts, culture and sports. The Technical Committee met in March 2004 and made a number of concrete and result oriented recommendations for regional cooperation in the vital area of human resource development. At the Twelfth SAARC Summit held in Islamabad in January 2004, the leaders underlined that investment in human resource development was critical for future development of South Asia. It was, therefore, essential to establish a network of centers of higher learning and training, and Skill Development Institutes across South Asia.9 South Asia has to deal with the greatest challenges created by new world economic order – globalization, regionalization and liberalization, while facing the critical economic and social issues and achieving the task of regional Millennium Development Goals (MDGs). The sectoral composition of the South Asian economies has been changing from agriculture to higher concentration of industrial and service sectors including trade in service sectors. While facing the above challenges, SAARC countries have to move forward with formulating sound and strategic policies, programmes and operational options to achieve the targets in MDGs, particularly 9

Proshikhyan. Journal of Training and Development Vo:13, No:2, July-December, 2005

alleviation of extreme poverty and hunger in the region. The broad objective of this study is to compile and analyze the HRD best practices/programmes in the South Asian region. The data collection for this programme is being started in seven countries of SAARC.

Recommendation Now a day, human resource management has become the core part of any organization due to its vast importance and multidimensional effect. As the expansion of organizational concept taking place, the essence and practice of HRD are being more acute for the total enhancement of any type of organization. Besides the private sector organizations; public sector organizations are also considering the necessity of HR issues to achieve their goal. Realizing the issue as a part and parcel of modern development process the leaders of SAARC recognized that HRD is one of the means of realizing the SAARC objectives. They agreed to establish the SAARC Human Resource Development Center (SHRDC) with main object to undertake research, impart training and disseminate information on HRD related issues and advise the Member States on HRD related policies and strategies. The Government of Pakistan offered to host the Center at Islamabad in Pakistan. Since this institution came into being the Center was at organizational stage for the last two-three years. On recruitment of its initial staff strength in 2002 the Center has become functional. The last meeting of the third SHRDC Governing Board recommended a number of programmes of activities, which were subsequently approved by the Fourth Special Session of the SAARC Standing Committee in July 2003. The Center is now making all-out efforts to complete the implementation of all the approved programmes of 2003. The main objective of this programme is to compile a comprehensive directory of HRD experts of the South Asian region, who are involved in policy making and implementing programmes in relation to the various fields of HRD. The specific objectives of this programme is to identify the possibilities of developing a network of HRD experts for creating mutual benefits for the member states and to use such experts to improve the quality of HRD programmes including research and training programmes of SHRDC. The directory on HRD experts in the region will be used as a resource bank to select resource persons to carry out SHRDC’s training programmes efficiently and effectively. It will also be helpful to conduct SAARC member country’s own research and training programmes in HRD. There is a possibility to design an e-discussion group on strategic HRD policies and other related issues in the region upon the compilation of this directory of HRD experts. A questionnaire has

been circulated to the member countries to obtain necessary information and also through SHRDC website from South Asian HRD experts to submit their information through its website as an e-information network. If you are a HRD expert or you are affiliated with an organization, which deals with research and training on HRD and its related areas, please provide your information to include the same in the data bank of HRD experts in South Asia. Each member country of the SAARC region requires up-to-date, reliable and consistent indicators for social and human development to formulate a sound and conducive policy environment within the region. The inadequacy of a comprehensive time series database on indicators of human development (HD), published by one organization within the SAARC framework is a long felt need for policy makers, policy analysts, administrators, intellectuals and other academics in the SAARC region. In this respect, SHRDC has designed a study to compile and publish data profiles on Macroeconomics; Education; Health; Demographic; Gender; Poverty and Public Expenditure; Food Security and Nutrition; Natural Resources and Environment; and Energy for SAARC member countries. SHRDC will update the database regularly each year and publish through the SHRDC’s website as an online publication. SHRDC plans in future to concentrate on core and focused programmes of activities, which will give tangible benefit to the member states in the region according to its mandate and terms of references. The center is also gathering HRDrelated study reports and other relevant information, which are readily available with the member states and the SAARC secretariat, and compiling this information in order to draw up a road map for future plan of activities of the center. A comprehensive regional survey and analysis have not been conducted so far in a rigorous fashion; to compile and assess the strengths, weaknesses, opportunities and threats (SWOT) of the existing HRD best practices/programmes and operational options exist in the SAARC region. After careful study of the strengths and opportunities, replicating such best practices of HRD could benefit the region. The development of human resource has been recognized as one amongst many objectives of long-term economic growth by most developing countries since the early fifties. But it had moved to the center stage of development priorities by the early seventies. In this respect, a series of study and more practice in this area are burning need to face millennium challenges in the modern world.

Conclusion HRD contributes to economic development. It does not by itself make such growth possible. Employers' organizations of Asian and Pacific developing countries face the

challenge of defining their HRD role. Their decision will affect the standing and relevance of their organizations to enterprises and their contribution to the economic and social development of their countries in the 21st century.

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Website: http://derekstockley.com.au/harticles.html