Laos to Allow Tens of Thousands More Foreign Workers

2013-09-24
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laos-chinese-workers-2011.jpg
Chinese workers repair a road leading to the special economic zone in the border zone of Boten in northern Laos's Luang Namtha province on March 11, 2011.
AFP

Laos needs to bring in 70,000 more foreign workers as the country grapples with a shortage of skilled labor in its emerging economy, according to Labor Minister Onechanh Thammavong.

The country has already recruited 20,000 foreign workers and the number needs to be more than tripled in the near future to keep pace with economic growth, she said.

Without a sufficiently trained domestic workforce, currently 90,000 foreign workers are required to meet the demands of businesses operating in the country, she told reporters in Vientiane this week.

Workers in Laos need more training to equip them with the skills needed to keep pace with competition from its Southeast Asian neighbors eying the formation of a single market in two years, Onechanh said.

Impoverished Laos has in recent years welcomed a flood of investments from neighboring China, Thailand, and Vietnam that have helped its economy reach a growth rate of 8 percent per year.

But critics say the foreign investments have not created as many jobs and opportunities for Laotians as they are supposed to, with companies bringing in thousands of workers from their home countries to help build development projects such as hydropower dams and mines.

Up to 30 percent foreign workers

According to the country’s labor laws, any company operating in Laos may employ unskilled foreign laborers to fill up to 10 percent of its workforce.

Another 20 percent may be foreign technical specialists, but at least 70 percent of its total workforce must be local hires.

But companies may receive special permission to hire more foreigners, and many of them do, while others bring in more workers illegally, reports say.

At the same time, thousands of Lao laborers flock across the border to work in Thailand.

Foreign investors say they prefer to bring their own workers to Laos because the locals they hire can be undisciplined or unreliable, with many failing to show up for work when rice-planting season begins as they tend to their own fields instead.

But others say poor government skills training programs are at fault for not allowing more Laotians to benefit from the new opportunities, and the local business community and the International Labour Organization, a U.N. watchdog, have warned that a skills shortage is holding back further growth in emerging sectors.

ASEAN Economic Community

Onechanh said Laos must conduct more training of its workforce as soon as possible in order to be competitive when the ASEAN Economic Community aimed at forging a single regional market takes off in 2015.

The Association of Southeast Asian Nations (ASEAN)—which aside from Laos comprises Brunei, Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam-—plans to liberalize migration of workers as part of market reforms.

As part of efforts to boost its labor force skills, the Lao government in January introduced a new certification system for national technical vocation education and training.

But critics say programs aimed at honing skills of local workers so far have not been wide-ranging enough or targeted to the right fields, producing too few people in the needed areas.

Some businesses struggle to source even low-paying jobs in rubber plantation projects and the construction industry, the Vientiane Times newspaper reported last week.

On the other hand, sectors like business administration, banking, and finance have a surplus of local skilled labor, it said.

Last month a senior adviser to the Lao National Chamber of Commerce and Industry told a business forum in Vientiane that the country was short of more than 31,000 workers in the garment, processing, tourism, steel, furniture, and construction industries and in some major companies.

The month before, two reports launched by the International Labour Organization and the Chamber of Commerce found that skills shortages are holding back rapid growth in industry and services, particularly in key emerging sectors such as mining, trade, hydropower, hotels and restaurants, telecommunications, IT, and garments, according to the commerce association.

Reported by RFA’s Lao Service. Written in English by Rachel Vandenbrink.