Policy reform key to attract Foreign Direct Investment and spur economic growth

Wednesday, 29 July 2020 00:25 -     - {{hitsCtrl.values.hits}}

 

 

An opportunity has emerged for Sri Lanka to attract high quality Foreign Direct Investments (FDIs) in the prevailing COVID-19 backdrop.

The study has identified the biggest pain point which influences the lack of FDIs being non-conducive policy. Policy reform will serve as a critical enabler that will set-in place the appropriate ecosystem to attract FDIs into Sri Lanka. Critical cogs in the wheel of FDIs will need to be identified, relevant policy streamlined and bottlenecks eliminated.

Whilst the thrust in infrastructure development is considered as an important factor in attracting FDIs, the heavy capital expenditure (Capex) requirement cannot be overlooked. At present there does not seem to be sufficient fiscal room for the incumbent Government to engage in an explosive Infrastructure development drive. The thrust in the short to medium term should be to expedite the bringing online of the existing infrastructure projects that are currently funded and underway. 

A conducive fiscal environment at a latter point in time will allow Sri Lanka to actively partake in infrastructure led growth. However, in order to further reinforce the economic impetus and positive spillover that is envisaged due to the development drive in infrastructure projects, it is vital to draw up a 10 year roadmap showcasing all potential investible infrastructure projects which can be showcased on a prioritised basis to both local and foreign stakeholders. It is essential that this road map is endorsed by all parties concerned to ensure continuity of such projects in the event that a change in regime is to take place. This will showcase further stability to prospective investors.

The majority of the factors that need to be aligned in order to facilitate the flow of FDIs into Sri Lanka, whilst not being Capex heavy, is weighted greatly around policy reform. The recent taskforce that was set-up to curb and mitigate the spread of COVID-19 has been effective. A similar taskforce should be set-up to fulfil the policy reform mandate in a short space of time.

The time is now to proactively seek out policy reform by putting in place the people, comprising of public sector officials, private sector practitioners and industry think-tanks to formulate, amend, and finally implement actionable policy to improve the attractiveness of Sri Lanka as a key FDI destination in the region.  

Eight key variables that influence and attract FDIs into countries with particular reference to six regional competitors will be discussed further.

 

Eight key factors to attract FDIs

 

1)  Stable Government and Policy

  • A strong and established government with a clear mandate and investor friendly policy.
  • Government must honour all the terms of the investment agreements. New laws must not detract from what has been granted.
  • The BOI must be fully empowered to administer all investment laws and ensure that all relevant government agencies fall in line.
  • Laws and policies must be fully transparent.
  • The Performance Indicator [Fragile States Index (FSI)] for the above should be monitored.
  • Fragile States Index (FSI) – Sri Lanka to strive towards achieving a rank of 100 (out of 178) from the current 46 (higher the ranking the better).  

 

 

2) Legal Framework (Upto date and responsive)

  • Updated and relevant laws that are in-line with the current commercial environment (Ex. Customs ordinance, Immigration act, Inland Revenue act, Investment law, Land law, etc.) 
  • Agreements signed by other Government authorities (incl. BOI) needs to be honoured by other relevant and linked agencies. 
  • Strict enforcement of law and progressive judicial system (including up-to-date legislature for the Arbitration process).
  • Sri Lanka needs a clearly defined land use policy with specific rental rate parameters for commercial, industrial, residential and social.
  • Establish pro-active taskforces that focus on industry specific law with the objective being to identify bottlenecks and suggest solutions.
  • Enhancement of IP protection law and enforcement.
  • Enhancement and revising capital market laws to protect and enhance investor confidence.
  • A Land Acquisition Act similar to Singapore, subject to 3 criteria: For specific public development | With fair compensation | On fair notice.

 

 

3) Advanced and Integrated Infrastructure

A connected transport network with integrated transport hubs.

Development of Light Rail Transits (LRTs), further develop existing railway lines and expressways.

Developing the Airports, Shipping Docks and Ports.

Developing the communication networks.

Developing the required utilities infrastructure – Water, electricity, gas, sewage and solid waste.

Ensuring the costs of utilities are regionally competitive.

 

4)  Macro Indicators

  • Stable economy with consistent growth in GDP. 
  • Low lending rates to encourage credit growth
  • Low single digit inflation to curb inflation led price escalations. 
  • Facilitate the listing of selected State Owned Enterprises (SOEs) on the Colombo Stock Exchange to enhance overall efficiency of the SOEs and improve the Market Capitalisation to GDP ratio.
  • Enhance the tax collection mechanisms. 

 

5) Fair and attractive business environment

  • Establishing clear, transparent and open investment criteria and selection process.
  • A true one stop shop to receive approvals on an expedited basis.
  • Streamlining the process flow of getting in FDIs and ensuring a smooth, timely and hassle free experience to the investor.
  • Foreign investors should have the ability to borrow locally with strict Loan to Value covenants and a sufficient income buffer.
  • Establishment of consistent tax policies over the long term. 
  • No arbitrary price control which creates artificial supply and demand.
  • Liberalised pricing mechanism with anti-dumping provisions to protect local industries and to ensure quality standards are maintained. 
  • The Performance Indicator (ease of doing business) for the above should be monitored.
  • Ease of Doing Business Rankings – Sri Lanka to aspire to move up the ranks to reach the top 50 from the current positioning of 99. 

 

6) Regional and bilateral trade agreements

  • Coverage for South America | Africa | Russia | Japan | Germany | Australia
  • Ensuring that Sri Lanka has Bilateral Agreements with key economies in all continents.
  • Bilateral, Multilateral and Regional agreements will convey that Sri Lanka is open for business with the world.

 

7) Regionally competitive tax structure

  • A competitive tax package to investors to make investing in Sri Lanka appealing and financially feasible.
  • A simplified and clear tax structure.
  • Providing investors enhanced investment allowances.
  • Exemption of import tax on goods imported as fixed assets on raw materials, supplies, and parts used for projects.
  • Tax concessions for setting up in disadvantaged locations and special economic zones.
  • Tax concessions for investment into specific industries to encourage investment.
  • Tax concessions for employing a specific number of local work force.
  • Tax concessions for utilising locally sourced material for the manufacture of goods.

 

8)  Educated and Skilled Workforce

  • To increase the number of graduates from Government universities from 25,200 to 60,000 per annum 
  • To increase the number of graduates from local private universities from 15,000 to 105,228 per annum
  • To increase the intake capacity of students in Government universities from 30,000 to 60,000.
  • To increase the number of students who are provided vocational training from 79,200 to 144,000.
  • Discontinue all Government university degree courses that do not have a demand in the job market.
  • Revise Government university courses to match the industry demand and future employability opportunities.
  • Provide student loans for those who have enrolled and bursaries for those who perform well.
  • Developing a high quality teacher workforce.
  • Establishment of a specialised Skills centres.
  • Implement 0% Corporate tax and 0% VAT on higher education.
  • Create new Science, Technology, Engineering and Mathematics (STEM) related departments and department-to-department partnerships with overseas universities. 
  • Establish partnerships with foreign universities and encourage exchange of students, lecturers, research findings and expertise.
  • Increase enrolment of international students in undergraduate and postgraduate programmes at private and public universities.
  • Intensify the linking students with relevant industries based on their educational qualifications for internship programs.
  • The Government has to be commended for renewing its focus on the Primary sector by allocating resources towards large scale agriculture projects, crop farming for the purpose of import substitution and the drive to develop local industries. This is the first port of call to bring in FDI’s alongside improving the technical expertise of local partners. The building of enablers to bring in FDI’s into the primary and secondary sectors will need to cascade towards attracting FDI’s into the tertiary and quaternary sectors. The achievement of which, will lay the platform for Sri Lanka to be a key player in global, bilateral and multilateral trade whilst achieving economic and financial independence.

Following is a deep dive on the 8 key factors to attract FDIs with regional comparisons.  

 

1 Stable Government and Policy  - What we have | What we need

What we have:

  • Temporary caretaker government.
  • Fragmented opposition with misaligned stakeholder interest.
  • Potentially inconsistent policy.

 

What we need:

  • Stable government.
  • Strong opposition with national interests.
  • Government must honour all the terms of the investment agreement. New laws must not detract from what has been granted
  • Government cannot repudiate project agreements unless it can be proven that they were procured by improper means – Until then the project must proceed as agreed in order to avoid economic losses.
  • The BOI must be fully empowered to administer all investment laws and ensure that all relevant government agencies fall in line (i.e. a one-stop-shop). Once empowered, any decision duly made by BOI in respect of operations of an FDI must not be challenged by any other authorities. Laws and policies must be fully transparent – investor must be able to access empowered BOI officers directly without the need to go through intermediaries.
  • BOI must also have the authority to grant investors special variation of standard terms, under specific circumstances and if the variation represented for is equitable.
  • Investors should not be burdened with court cases with various authorities, e.g. customs, labour, tax, etc., needlessly sapping their time, money and energy. The government must resolve these outstanding litigations for a more conducive investment environment. 
  • The Performance Indicator [Fragile States Index (FSI)] for the above should be monitored.
  • Fragile States Index (FSI) – Sri Lanka to strive towards achieving a rank of 100 (out of 178) from the current 46 (higher the ranking the better). 

 

Regional benchmarks

Singapore: Most competitive economy in the world | 1st in the world in political and operational stability | Least riskiest country in the world |Highest GDP per capital in the region – $ 58,248.

 

Vietnam: Policy is set every five years by the Party congress and adjusted twice a year by plenary meetings of the Central Committee | The President, as Head of State, represents The Socialist Republic of Vietnam on internal and foreign affairs | People’s Committee (province, district, and commune) governs management affairs within its administrative location, manages, directs, operates daily activities of local state bodies and executes policies | The government is committed to ensuring a stable socio-political environment, protecting the legitimate rights and interests of investors, and creating an enabling environment for FDI enterprises in the country | The State Bank of Vietnam works closely with ministries and central and local government agencies to come up with proactive monetary and fiscal policies to put inflation under the control and stabilise the macro economy so that Vietnam will achieve rational economic development growth.

 

Stable Government and Policy  - The Fragile States Index

The Fragile States Index (FSI) produced by The Fund for Peace (FFP), is a critical tool in highlighting the normal pressures that all states experience and helps identifying when those pressures are outweighing a state’s capacity to manage those pressures. By highlighting pertinent vulnerabilities which contribute to the risk of state fragility, the Index – and the social science framework and the data analysis tools upon which it is built – makes political risk assessment and early warning of conflict accessible to policy-makers and the public at large.

Twelve conflict risk indicators are used to measure the condition of a state at any given moment. The indicators provide a snapshot in time that can be measured against other snapshots in a time series to determine whether conditions are improving or worsening.

 

2 Legal Framework - What we have | What we need

What we have:

  • Investor unfriendly law. 
  • Time consuming judicial process. 
  • Member of the WIPO (World Intellectual Property Organization).
  • Necessary legislature in place for the arbitration process (slow and time consuming)

 

What we need:,

  • Updating all laws to make them relevant in order to adapt to the current commercial environment.
  • Agreements signed by other Government authorities (incl. BOI) needs to be honoured by other relevant and linked agencies. 
  • Strict enforcement of law and progressive judicial system (including up-to-date legislature for the Arbitration process).
  • Clearly defined land use policy with specific rental rate parameters for commercial, industrial, residential and social.
  • Revising specific laws related to land in order to free-up capital and to attract investors.
  • Clearly defined land use policy with specific rental rate parameters for commercial, industrial, residential and social.
  • Establish pro-active taskforces that focus on industry specific law with the objective being to identify bottlenecks and suggest solutions.
  • Enhancement of IP protection law and enforcement.
  • Enhancement and revising capital market laws to protect and enhance investor confidence.
  • A Land Acquisition Act similar to Singapore, subject to 3 criteria: For Specific public development | With fair compensation | On fair notice.
  • Digitalisation to reduce human errors, speedup the clearance process and reduce potential corruption. (Ex. Customs).

 

Regional benchmarks

Singapore: Investment Law

Singapore has signed Bilateral Investment Treaties (BITs) with 46 countries. These agreements mutually protect nationals or companies of either country against war and non-commercial risks of expropriation and nationalisation.

Procedures relative to foreign investment

Acquisition of holdings – possible. A majority stake in the capital of a local company is legal in Singapore.

Obligation to declare – It is obligatory to declare if the proposed company name includes a trademark or patent name or the name of another company/business already existing in any other country.

Requests for specific authorisations – Although Singapore’s legal framework and governmental policies do not require any specific authorisation to invest in the country, certain limits exist in such sectors as telecommunications, broadcasting, domestic news media, financial and some professional services. For these sectors, the Articles of Incorporation may include shareholding limits that restrict ownership in corporations by foreign persons. Moreover, Finance Ministry approval is required for the acquisition of local banks when exceeding the specified share limit.

 

Singapore: Office Real Estate and Land Ownership Law

The possibility of buying land and industrial and commercial buildings – It is possible to buy real estate in Singapore. 

Risk of expropriation – Singapore has no law forcing foreign investors to transfer ownership locally and has not expropriated any property till date.

 

Singapore: IP Law

Singapore has signed Bilateral Investment Treaties (BITs) with 46 countries. These agreements mutually protect nationals or companies of either country against war and non-commercial risks of expropriation and nationalisation.

 

 

 

National Organisations:

The organisation responsible for the protection of intellectual property in Singapore is the Intellectual Property Office of Singapore (IPOS).

Regional Organisations:

APEC Intellectual Property Rights Experts Group

Association of South East Asian Nations – ASEAN

International Memberships:

Member of the WIPO (World Intellectual Property Organization).

Signatory to the Paris Convention For the Protection of Intellectual Property.

Membership to the TRIPS agreement – Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Singapore – Law on Competition

The Competition Act was enacted to provide a generic competition law to protect consumers and businesses from anti-competitive practices of private entities.

Guidelines are intended to help businesses understand how the Competition and Consumer Commission of Singapore (CCCS) will administer and enforce infringements of the prohibitions in the Act. This will improve transparency and provide greater clarity to businesses on the competition law regime. These Guidelines are finalised after seeking input and feedback from the public.

 

Singapore: Securities Law

Comprehensive regulation and guidance covering 32 key areas and stakeholders in the capital markets, trust business and financial adviser segment.  

 

Singapore: FX Control Act

There is no exchange control in Singapore. Capital and profits can be repatriated out of Singapore without hindrance. Bank accounts can be denominated in currencies other than the Singapore dollar. As a matter of policy, the Monetary Authority of Singapore imposes restrictions on the amount of Singapore dollars that can be loaned to non-resident financial institutions.

 

Singapore: Customs Ordinance

Imports

The following types of imported goods are subject to customs or excise duties (the rates depend on the specific goods concerned):

Intoxicating liquors | Tobacco products | Motor vehicles | Petroleum products | Biodiesel blends.

Certain dutiable goods are exempt from customs and excise duties if they are imported by persons and/or organisations listed in the Customs (Duties) (Exemption) Order.

All imported goods are subject to goods and services tax at the rate of 7% of the taxable value of the imported goods, unless they are imported into special zones for re-export.

Imposition of the goods and services tax is governed by the Goods and Services Act.

 

Exports

Singapore does not impose export tax.

 

3 Advanced and Integrated Infrastructure - What we have | What we need

What we have:

  • Satisfactory level of road connectivity. 
  • Scattered infrastructure development sans focus.
  • Underdeveloped public transport system.

 

What we need:

  • Developing an advanced and integrated infrastructure, particularly transport. 
  • Development of Light Rail Transits (LRTs), further develop existing railway lines, expressways and integrated transport hubs.
  • Developing the airports, shipping docks and ports.
  • Developed communication networks.
  • Developing the required utilities infrastructure – Water, electricity, gas, sewage and solid waste.
  • Ensuring the costs of utilities are regionally competitive.

 

Regional benchmarks in infrastructure (Singapore) 

Singapore: World-class infrastructure | Jurong Island is Singapore’s centrepiece for refining, petrochemical, and specialty chemicals activities. Its highly integrated infrastructure closely connects both customers and suppliers | Under Singapore’s Precision Engineering Industry Transformation Map (ITM) they intend to broaden and deepen their foundation in advanced manufacturing by leveraging on digital technologies and developing capabilities in advanced robotics, additive manufacturing, advanced materials, sensors, lasers and optics | Under the Research, Innovation and Enterprise (RIE) 2020 plan, the Government will invest S$3.3 billion in Advanced Manufacturing and Engineering R&D | The Technology Centre for Offshore and Marine Singapore (TCOMS) features nearly S$107 million worth of best-in-class infrastructure, including a deep-water ocean basin | Singapore is a leading location for best-in-class manufacturing plants, where innovative products are launched and produced. 

Industry leaders like Pfizer, Novartis, Sanofi, AbbVie and Amgen have global manufacturing hubs in Singapore for a wide range of products including Active Pharmaceutical Ingredients, drug products and biologics drug substances | 8 of the top 10 pharmaceutical companies have facilities in Singapore, manufacturing 4 of the top 10 drugs by global revenue | Singapore is a key node in the global supply chain for products ranging from storage and memory products, to micro electro mechanical systems (MEMS) | These manufacturers are supported by a rich ecosystem of leading materials and equipment and electronics manufacturing services players | Electronics Industry Transformation Map (ITM) aims to grow the sector by transforming the current installed base of companies through productivity, automation, and upgrading the manufacturing product mix.

 

Singapore: Transport - Key Stats

- 64% of households are now within a 10-minute walk of a train station compared to 57% in 2012.

- 79% of public transport journeys under 20km are completed within 60 minutes compared to 76% in 2012.

-67% of all peak-period journeys are now undertaken on public transport, compared to 63% in 2012.

-In 2019, 12% of the country’s land area was used for roads.

-The average amount of time people spend commuting on public transport, to and from work, on a weekday is 84 minutes.

-On average, a typical family using public transport on a daily basis spends about 4.8% of its disposable income on public transport.

-Concession rates are given to children, students, senior citizens, national servicemen and people with disabilities.

-All train and bus journeys can be paid for using cash, contactless stored value cards as well as Mastercard or Visa contactless credit and debit cards. 

-Forty per cent of Singapore’s public transport journeys are made via rail, with the percentage set to increase as newer rail lines are being built. 

-The total rail length in 2019 was 227.9km | There are currently 156 Mass Rapid Transport (MRT) and Light Rail Transit (LRT) stations across 5 MRT and 3 LRT lines.

-Average daily ridership on the Mass Rapid Transport (MRT) and Light Rail Transit (LRT) has increased by 5.7% to 3.5 million rides a day in 2019.

-The Mean Kilometres Between Failure (MKBF) was 690,000 train-km in 2018, more than three times of the 181,000 train-km in 2017.

-The number of buses on the roads has gradually increased over the years and in 2018 there were 19,379, an increase of the previous year’s 19,285 | Bus ridership is at 4 million per day.

-The increase in daily bus ridership comes on the back of initiatives such as the $ 1.1 billion Bus Service Enhancement Program (BSEP), under which 1,000 new buses and 80 new bus routes were added.

-The total privately-owned cars in 2018 is 551,575. This is a reduction of 55,000 private cars since 2013 when there were 607,292.

-The number of daily journeys made using privately owned vehicles fell to 4.2 million in 2018, a 13 per cent decrease from 4.8 million in 2013.

-Trips made using Personal Mobile Devices (PMD), bicycles and on foot increased from 2.2 million in 2012 to 2.6 million in 2017

-440km of cycling paths.

Integrated Transport Hubs (ITHs) provide more seamless connections between bus and train. These fully air-conditioned transit hubs, which are interchange stations integrated with malls, give commuters convenient access to amenities as part of the public transport journey.

Reduced fare structure to encourage more pre-peak travel. Commuters now pay lower fares if they tap in at any MRT or LRT station before 7:45 a.m.

New smartphone apps have given Singaporeans the ability to plan door-to-door journeys with the combination of transport modes that best meet their needs. To further improve their travel experience, the MyTransport.SG app includes a multi-modal journey planner that provides real-time, customised information about different transport modes.

Upskilling and reskilling transport workers - Transport workers are trained to meet the diverse needs of all Singaporeans. He authorities actively collaborate with the National Transport Workers’ Union (NTWU), National Taxi Association (NTA), National Private Hire Vehicles

Association (NPHVA), as well as point-to-point and public transport operators, to ensure that transport workers remain well-equipped to meet those needs.

Redesigning facilities to meet commuters’ needs – Steps being taken to construct nursing rooms at selected bus interchanges and MRT stations | Exploration of the possibility of having quiet rooms which are designed for people who need access to a quiet and calming space during their journey | Installation stroller restraints in buses | Installation of elder-friendly seats with armrests that make it easier for seniors to stand up from a sitting position at  bus stops.

Reducing Noise Pollution  -  For an enhanced living environment, noise barriers along elevated railway sections are installed. They are built on stretches that face noise sensitive developments.

Land Transport Master Plan (LTMP) 2040 Objectives - Singapore:

-A transport network that is convenient, well-connected and fast.

-A transport ecosystem characterised by gracious behaviour and inclusive infrastructure.

-A transport environment that supports healthy lives and enables safer journeys.  

 

 

4. Macro Indicators

 

 

5.  Fair & Attractive Business Environment - What we have | What we need

What we have:

  • Bureaucratic red tape in approving projects.
  • Scattered approval process across different institutions. 
  • Corruption in project approvals and non-transparent practices.
  • Complacent attitude of existing staff with no sense of urgency.
  • Inconsistent and volatile tax policies.

 

What we need:,

  • Establishing clear, transparent and open investment criteria and selection process.
  • A true one stop shop to receive approvals on an expedited basis.
  • Streamlining the process flow of getting in FDI’s and ensuring a smooth, timely and hassle free experience to the investor.
  • Foreign investors  should have the ability to borrow locally with strict Loan to Value covenants and a sufficient income buffer.
  • Establishment of consistent tax policies over the long term. 
  • No arbitrary price control which creates artificial supply and demand.
  • No arbitrary policy which will drive up  input costs, so that import substitution FDI can produce the goods cheaper locally than imports.
  • Liberalised pricing mechanism with anti-dumping provisions to protect local industries and to ensure quality standards are maintained. 
  • The Performance Indicator (Ease of doing business) for the above should be monitored.
  • Ease of  Doing Business Rankings - Sri Lanka to aspire to move up the ranks to reach the top 50 from the current positioning of 99.

 

 

Regional benchmark

Singapore: Ranked 2nd in the world in the Doing Business 2020 survey which compares business regulation in 190 economies.

 

 

6: Bilateral Trade Agreements - What we have | What we need

What we have:

  • Indo – Sri Lanka Free Trade Agreement -  ISFTA
  • Pakistan – Sri Lanka Free Trade Agreement -  PSFTA
  • Agreement on a South Asia Free Trade Area amongst 6 other countries in the region – SAFTA
  • Agreement on Global System of Trade Preferences (GSTP)
  • South Asian Association for Regional Cooperation - SAARC
  • Asia Pacific Trade Agreement – APTA
  • Two way agreements – 19 Countries
  • Other Agreements – 4 Countries

 

What we need:,

  • Coverage for South America | Africa | Russia | Japan | Germany | Australia
  • Ensuring that Sri Lanka has Bilateral Agreements with key economies in all continents.
  • Bilateral, Multilateral and Regional agreements will convey that Sri Lanka is open for business with the world.

 

 

7 Tax Structures - What we have | What we need

What we have:

  • High level of Corporate Tax
  • Regionally competitive Income Tax
  • Regionally competitive Value Added Tax (VAT)
  • No dividend tax for foreign residents

 

What we need:

  • A competitive tax package to investors to make investing in Sri Lanka appealing and financially feasible.
  • A simplified and clear tax structure.
  • Providing investors enhanced investment allowances.
  • Exemption of import tax on goods imported as fixed assets on raw materials, supplies, and parts used for projects.
  • Tax concessions for setting up in disadvantaged locations and special economic zones.
  • Tax concessions for investment into specific industries to encourage investment.
  • Tax concessions for employing a specific number of local work force.
  • Tax concessions for utilising locally sourced material for the manufacture of goods.

 

Regional benchmarks

Singapore: Start-up companies in Singapore can take advantage of a tax exemption of up to $125,000 on the first $200,000 of income for their first three consecutive years of business | Qualifying offshore funds are also exempt from tax on some income, including income from dividends,7 gains, profits, and interest from traditional investments including deposits, bonds, shares, stocks, and securities | Global trading companies are eligible for concessionary tax rates of 5% to 10% for three or five years if they qualify for Singapore’s Global Trader Program. Singapore typically grants Global Trader status to companies with established track records in international trade | Businesses can attain the Development and Expansion Incentive (DEI). This awards businesses that migrate to business activities that add more value (such as investing in projects that advance key industries like manufacturing), with a five to 10 percent tax break after the initial tax holiday has ended.

 

Vietnam - Extends investment incentives to a number of industries and projects that it has identified to be of strategic importance for the country | Vietnamese policy in recent years has broadly promoted projects in high tech industries, large capital, or labor-intensive investments, and projects that are expected to have a tangible impact on social conditions, such as education or healthcare | Foreign investors investing in economic zones  benefit from tax incentives extended by the Vietnamese government.

 

 

 

 

8 Educated and Skilled Workforce - What we have | What we need

What we have:

  • A system which produces 25,000 graduates from Government Universities. 
  • A system which produces 15,000 graduates from Local Private Universities.
  • A system which provides vocational training to 79,200 students.

What we need:,

  • To increase the number of graduates from Government Universities from 25,200 to 60,000 per annum. 
  • To increase the number of graduates from local private universities from 15,000 to 105,228 per annum.
  • To increase the intake capacity of students in Government universities from 30,000 to 60,000.
  • To increase the number of students who are provided vocational training from 79,200 to 144,000.
  • Discontinue all Government university degree courses that do not have a demand in the job market.
  • Revise Government university courses to match the industry demand and future employability opportunities.
  • Ensure availability of lectures through an online portal by Government and Semi-Government universities.
  • Provide student loans for those who have enrolled and bursaries for those who perform well.
  • Developing a high quality teacher work force.
  • Establishment of a specialised Skills centers.
  • Upgrade all labs at Government universities with the latest equipment.
  • Implement 0% Corporate tax and 0% VAT on higher education.
  • Corporate tax and VAT rates to be guaranteed for the next 25 years to aid building private universities and private international universities.
  • Encourage establishing of a private university or semi Government university in every district.
  • Create new Science, Technology, Engineering and Mathematics (STEM) related departments and department-to-department partnerships with overseas universities. 
  • Establish an incentive scheme for lecturers in addition to their salary, based on the quality of their research and number of journal papers they’ve published, to increase publication rate.
  • Establish partnerships with foreign universities and encourage exchange of students, lecturers, research findings and expertise.
  • Increase enrolment of international students in undergraduate and postgraduate programmes at private and public universities.
  • Intensify the linking students with relevant industries based on their educational qualifications for internship programs.

 

 

Regional benchmarks

Singapore: Developing a high quality teacher workforce 

 

Recruitment

The Ministry of Education carefully selects prospective teachers from the top one third of the secondary school graduating class. Strong academics are essential. Teachers receive a stipend equivalent to 60% of a teacher salary while in training and commit to teaching for at least three years.  Interest in teaching is seeded early through teaching internships whilst a system for mid-career entry exists as well.

 

Training

All teachers receive training on the Singapore curriculum at the country’s National Institute of Education at Nanyang Technological University, either in a diploma or a degree course depending on their level of education at entry. There is a close working relationship between the Institute and schools, where master teachers mentor every new teacher for several years.

 

Compensation

Each year, the Ministry of Education examines a range of occupational starting salaries and may adjust the salaries for beginning teachers to ensure that teaching is seen as equally attractive with other occupations for new graduates. Teacher salaries do not increase over time as much as some other professions but there are many opportunities for teachers to assume other roles.

 

Professional Development

Teachers are entitled to 100 hours of professional development per year. Courses at the National Institute of Education focus on subject matter and pedagogical knowledge and lead towards higher degrees. Professional development is school-based, led by school staff developers, whose job it is to know where there are problems in the school. Ex. A group’s math performance, or to introduce new practices such as project-based learning or new uses of ICT. Each school also has a fund through which it can support teacher growth, including the development of fresh perspectives by going abroad to examine aspects of education in other countries.

 

Performance appraisal

In Singapore, teachers’ performance is appraised annually by several people on multiple measures, including their contribution to the academic and character development of all students in their charge, their collaboration with parents and community groups, and their contributions to their colleagues and the school as a whole. Teachers who do outstanding work, receive a bonus from a school bonus pool.

 

Career Development

After three years of teaching, teachers are assessed annually to see whether they have the potential for three different career paths  - master teacher, specialist in curriculum or research, or school leader, each with salary increments. Teachers with  potential to be school leaders are moved to middle management teams and receive training to prepare them for their new roles. Middle managers’ performance is assessed for their potential to become assistant principals, and later, principals. Each stage has a range of experiences and training to prepare candidates for school leadership and transformation. There is a clear understanding that high-quality teaching and strong student performance require effective school leaders.

 

Singapore: Skilled Workforce – Establishment of SkillsFuture

  • SkillsFuture is a national movement that provides opportunities for all Singaporeans to develop to their fullest potential at different stages of their lives.
  • Objectives of SkillsFuture: 

Help individuals to make well-informed choices in education, training and careers

Through collaborations between the Government, industry, and institutions, individuals will have exposure to a wide range of occupations and industries from a young age. They will also have access to ongoing information about the changing needs of the labour market.

 

Develop an integrated, high-quality system of education and training that responds to constantly evolving industry needs

Education and training will be reviewed on a regular basis to ensure that a sound and broad-based education for the young is complemented with full menus of continual learning options – including opportunities to develop new specialisations.

Promote employer recognition and career development based on skills and mastery

Employers will be involved in designing and implementing a framework to enable employees to advance in their careers through skills ladders.

Foster a culture that supports and celebrates lifelong learning

This will involve a long-term effort to respect every job for its requisite skills, and value the achievements of individuals who attain mastery in their own fields. It will also promote the habit of learning throughout life – for work as well as for personal development and interest.

 

Initiatives to support the Employers:

iNnovative Learning 2020 or iN.LEARN 2020 is a learning innovation initiative led by SkillsFuture Singapore. iN.LEARN 2020 will drive the use of blended learning in Continuing Education and Training (CET) to meet the dynamic learning needs of business enterprises and individuals.

This learning innovation initiative aims to foster closer collaboration among CET partners and practitioners, such as training providers, adult educators, enterprises, consultants and technology vendors to enhance the quality, accessibility, and effectiveness of learning.

P-Max is a SkillsFuture initiative that aims to:

Help small and medium-sized enterprises (SMEs) to better recruit, train, manage and retain their newly-hired Professionals, Managers, Executives and Technicians (PMETs).

Enable SMEs to establish better communication channels between supervisors and staff and to adopt progressive HR practices (e.g. goals setting, performance management) for newly-hired PMETs within their SMEs.

Help newly-hired PMETs to better acclimatise to the new SME work environment and to encourage better retention of PMET in SMEs.

The SkillsFuture for Digital Workplace, formerly known as Future@Work, is a national initiative designed to equip Singaporeans with the mindset and skills to prepare for the future economy.

SkillsFuture Earn and Learn Programme – Under this programme, fresh ITE and polytechnic graduates will get placed with employers and learn through structures on-the-job training and institution based training. Employers can receive up to S$ 15,000 to offset the cost of developing and providing the structured training. 

SkillsFuture Employer Awards – The SkillsFuture Employer Awards recognises exemplary and progressive employers that champion skills development. They grow their talent pool and bring the best in their employees, offering learning opportunities and structured skills-based career pathways.


(The writer Hardy Jamaldeen is directly instrumental in bringing in investments exceeding Rs. 7 billion into Sri Lanka and is a key lobbyist for real estate and investment reforms to attract FDIs into Sri Lanka. He is a finance professional with over 20 years of experience and a seasoned commercial property investor and advisor. Hardy is the Founding Managing Director of Steradian Capital Investments Ltd. and Executive Director of Lanka Realty Investments PLC where he is responsible for financing, corporate structuring, acquisitions and development. He is also the Executive Director of several real estate companies, focusing on commercial, residential and leisure property investment and development. Hardy serves as a Director of Hayleys PLC, Talawakelle Tea Estates PLC, Haycarb PLC, Singer (Sri Lanka) PLC, Singer Industries (Ceylon) PLC. He is a Fellow of the Association of Certified Chartered Accountants, UK and holds a degree in Engineering and Business from the University of Warwick, UK.) 


Sources


General

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Singapore

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India

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Vietnam

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Indonesia

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Malaysia

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Bangladesh

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Sri Lanka

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