From Overseas Press

Asian giants face the risks of urbanization

(Agencies)
Updated: 2010-08-04 13:58

Shifting people permanently off the land will be a stern test of Chinese policy planning, which is not faultless.

For example, China vastly expanded college enrollment in the late 1990s to ease job pressures, but it failed to anticipate the consequences: There are now six million graduates a year, six times as many as before, but more than 30 percent of them are unemployed.

Hence the army of young would-be professionals, China's ant tribe, who eke out livings on the fringes of cities like Beijing, trying to get a foot on the job ladder.

Many factories, by contrast, say they cannot hire enough production workers.

"China's current tight labor supply reflects a structural imbalance, with white-collar workers still unable to enjoy accelerated wage increases," the investment bank China International Capital Corp. said in a recent report.

Skill mismatches in India are even more glaring. Only 11 percent of the members of the 15-to-59 age group have received vocational training, according to a report by the manpower consulting firm TeamLease and the Indian Institute of Job-Oriented Training.

Such statistics dramatize what M.G.I. calls the unprecedented policy tests posed by the speed of urban development — a seismic shift for a nation that takes pride in its rural identity.

"Indeed, India is still debating whether urbanization is positive or negative and whether the future lies in its villages or cities," the M.G.I. report said.

The research group's answer is clear: Villages and cities are interdependent; addressing life in urban India is not an elitist endeavor but rather a central pillar of inclusive growth.

So, can India rise to the occasion?

"There'll be ups and downs, but there's a growing realization of the challenges if they don't. Failing to change could convert a demographic dividend into a demographic debt," said Mr. Dobbs of M.G.I.