MANILA, PHILIPPINES (12 December 2017) — South Asia’s education and skills training remain binding constraints as the subregion’s countries play catchup with more successful Asian economies, according to a report released today by the Asian Development Bank (ADB).

High quality education and skills training of the labor force are vital in promoting the jobs, productivity, and income growth needed when an economy transitions from producing simple to more sophisticated high-value products, says the report, Human Capital Development in South Asia: Achievements, Prospects and Policy Challenges. The study reviews human capital in terms of education and skills in South Asia, comparing its situation to other more advanced Asian economies, including the People’s Republic of China, the Republic of Korea, and parts of Southeast Asia.

Estimates suggest that between 1981 and 2010, human capital, as defined by the quantity and quality of education, skills training, and skills of the labor force at the national level, contributed to about 22% of annual gross domestic product per worker growth in India. During the same period, it contributed about 21% in Bangladesh and 16% in Sri Lanka.

“Although South Asia has made tremendous progress in expanding access to schooling, especially at the primary and secondary levels, over the past decade, there are still millions of children who remain out of school,” the report says. Moreover, there are substantial disparities in access, participation, and completion of education across gender, income, and social groups.

“A greater focus on boosting the quality of education at all levels is needed,” the report says. “Higher public and private investments in education are necessary to upgrade quality and reduce disparities.”

In the early stages of economic transformation, South Asia’s economies are experiencing shortages of skilled workers, the report says. “It is crucial for South Asian countries to raise the quality of education and skills of its workforce to avoid stagnating at their current income levels.”

It makes nine policy recommendations toward a more productive, skilled, and relevant labor force for a modern, competitive economy, starting with ensuring that education and skills development are at the center of national development policies. It also calls for better monitoring of education quality, broadened access to education in order to narrow disparities, secondary and tertiary education that match the changing demand for skills, improved training and skills development, fostering of greater gender sensitivity, sustainable financing, improved public-private partnerships (PPP) for skills training, and more regional cooperation on human development.

The report was launched on the sidelines of the 3-day 7th International Skills Forum that opened today at ADB headquarters alongside four related South Asian case studies on information and communications technology, innovative strategies for student assessment, teacher professional development, and innovative PPP strategies. The theme of this year’s forum, Anticipating and Preparing for Emerging Skills and Jobs, looks at the different types of skills that employers require and how the education and training systems are responding to rapidly changing requirements in light of the fourth industrial revolution.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.

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