Developing Skills and Competencies for ASEAN Integration

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Professor Melito Salazar, Jr.

Professor Melito Salazar, Jr.

Philippine business has been mainly focused on the domestic market, and, on a limited scale, on the markets of the United States and Europe, and, in recent years, China. This orientation has influenced management thinking strategies and programs toward Western concepts.

Even with the Philippines being part of the ASEAN, minimal attention from Philippine business has been focused on the markets of ASEAN. By 2015, such a situation will not serve the interest of Philippine business and society since in that year, the full integration of ASEAN into one market, with free exchange of products, services, human resources and capital, will occur.

The mindset of Philippine businessmen and managers must change, by looking at ASEAN as their domestic market while keeping the United States, Europe and China as export markets. Strategies should correspondingly change for the Philippines to meet the challenges of businesses from other ASEAN countries locating in the Philippines and to seize the opportunities provided by the huge market in other ASEAN countries.

The change will only come about if Philippine business, government and the academe work together not only to bring about this change of mindset but also to enhance the skills and competencies of Philippine human resources so we can better compete in the era of ASEAN integration.

The significance of ASEAN integration is evident in the fact that in 2013 the ASEAN economy grew between 5.3 and 6.0 percent compared with 5.7 percent in 2012. Strong domestic demand continued to underpin ASEAN’ economic growth in 2013. The growth in ASEAN-5 stayed steady at the end of 2013 while Brunei Darussalam and the CLMV economies (Cambodia, Lao PDR, Myanmar and Viet Nam) grew at relatively higher levels. It is this growth pattern which will be the foundation of substantial spurts in the ASEAN economy come 2015.

That economic growth will depend much on the intra-ASEAN trade which in 2012 remained stable at US$ 601 billion, and accounted for the highest share in both ASEAN’s total exports at 26 percent and total imports at 23 percent. Bucking the trend of declining global FDI inflows, particularly in developing economies, intra-ASEAN FDI net inflows also soared significantly, reaching US$20 billion or an 18.5 percent share in 2012 with total FDI level at US$ 108.2 billion.

By 2015 the ASEAN Economic Community (AEC) will draw more FDIs attracted by the synergistic opportunities offered by the region a single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy.

The greatest attraction of the region is the highly skilled and competitive human resources enhanced by the facilitative environment of AEC. In November 2012, the ASEAN Agreement on Movement of Natural Persons was signed to facilitate the temporary movement of natural persons including skilled labor across the region in the areas of trade in services, goods and investments. In addition, under the ASEAN Framework Agreement on Services, eight packages of commitments have been concluded with the ninth package being finalized. Under each package, the ASEAN Member States are opening up their services sectors for other Member States. Mutual Recognition Arrangements (MRAs) have been concluded to facilitate recognition of professionals, including accountants, architects, surveyors, engineers, dental practitioners, medical practitioners, nurses and tourism professionals.

These developments provide vast opportunities for the Philippine human resources sector which is universally acknowledged as most sought in the region for its competence, industry and adaptability. However, the ASEAN framework also provides qualification standards which ASEAN professionals must meet.  Paper requirements are essential for entry level employment because without being hired, how will employers in the region appreciate the competitive advantages of Philippine professionals?

The government HR triumvirate—the Commission on Higher Education, the Department of Education and the Technical Skills Development Authority—upon the prodding of and in partnership with the private sector has initiated and implemented various measures to enhance readiness for AEC. The institution of K to 12 is a basic foundation to meet these requirements and must be achieved no matter how challenging are the complementary measures required.

For Philippine professionals with the experience but lacking the paper requirements, educational institutions should provide enhancement programs to meet the demands of the AEC. The opportunities in AEC are so varied and cover many levels that an integrated and consistent program addressing all of them should be established and calibrated.

It should also be emphasized that the Philippines should not prepare its professionals and workforce only for deployment in ASEAN. Philippine business should ensure that all its human resources have the competence and skills to make Philippine business highly competitive in 2015. It is expected that enterprising ASEAN businesses will attempt to enter the Philippine market either by flooding it with goods and services or by establishing a production and marketing base in the country. Such competition must be met by equally good or better Philippine enterprises.

The insights offered by Robert Rosen and his team in their book, Global Literacies, are extremely useful. They opine that globally competitive enterprises need to focus on three major assets people, relationships and culture.

People are the new corporate resource. Business fights to attract, retain, develop and motivate the best and the brightest, seeking new ways to measure and enhance the value of their human capital. Companies need to establish and nurture strong, healthy internal and external relationships to enhance value through teams, networks, suppliers, and even alliances and joint ventures with competitors. They stress that cultural wisdom a deep understanding of their own cultures and those of others will enable companies to mobilize diverse peoples, serve diverse customers, and operate around the world.

Broadly, a Philippine company’s management and staff should seek to understand the workings of ASEAN, particularly its various economic instruments. The regional legal frameworks set the scope and terms by which ASEAN Member States are cooperating and working with each other. They also will serve as a guide to the regulatory reforms that will be undertaken at the national level, which in turn will impact on a company’s way of doing business. Studying the ASEAN economic agreements will allow one to see the opportunities offered by economic integration from trade facilitation, labor mobility, to infrastructure connectivity, among many others. It will also allow one to understand the changes brought about by AEC and their accompanying impacts. In turn, this will enable companies to formulate strategies and prepare for 2015.

Developing competencies and skills for AEC necessitates a new, flexible and inquisitive mindset which only Philippine educational institutions can develop and nurture.
Professor Melito Salazar, Jr. served as president of the Management Association of the Philippines in 2013. At present, he is dean of the School of Accountancy & Management of the Centro Escolar University. He earned his BSBA and MBA from UP. Email him at [email protected]
For more articles on the ASEAN Integration from the UP Forum, please click here.