[Title] Kuala Lumpur Action Programme, on Skills Development (Attachment to the APEC Economic Leaders' Declaration)

Background

1. Human resources development is one of the key factors to ensure sustained economic growth. Recognising this, APEC Economic Leaders in Seattle envisioned building a community where improved education and training would provide the skills for improving the well-being of its people.

2. In 1994, Ministers adopted the Human Resources Development Framework which reaffirmed the principles of the Seoul Declaration, namely:

- affirm that issues of human resources development and the development of economic growth, employment, and quality of life should be addressed in an integrated and coordinated manner;

- affirm the value of, and need for, concerted development of human resources by member economies, the region's business/private sector enterprises, and research, education and training institutions; and

- affirm the important role of the public sector in giving guidance to human resources development in both the public and business/private sector.

3. The meeting of APEC Human Resources Development Ministers in 1997 also emphasised the importance of skills development as one of the instruments for adjusting to the changes in the labour market and economic environment. The strive for sustained growth demands an emphasis on productivity, the emphasis on a skilled workforce would enable the restructuring of industry towards higher technological capability and value-added as well as enhancing the absorptive capacity for technological improvements.

4. In the face of the current economic crisis, APEC has agreed that there is a need to address the social impact of the crisis. Retraining of displaced workers can contribute towards alleviating the social impact on those affected as well as strengthening the spirit of community in APEC.

Objective

5. As APEC progresses towards a decade of regional cooperation, efforts towards achieving the vision of stability, security and prosperity for our peoples will be further strengthened through an APEC action programme on skills development. The objective of the programme is to contribute towards sustainable growth and equitable development while reducing economic disparities and improving the social well-being of the people, through skills upgrading/improvement.

6. The action programme seeks to encourage greater participation of the private/business sector in skills development in APEC. The programme also emphasises projects which can be conducted on an on-going basis taking into account the principles of mutual respect and equality, mutual benefit and assistance, constructive and genuine partnership, and consensus building. APEC economies will participate in the implementation of the programme on voluntary basis.

Strategic Focus

7. The action programme will bring to focus and encourage concerted efforts in activities that contribute directly towards a more rapid building up of the skills base of the region's workforce in four specific areas:

(a) Upgrading the industrial skills base: Upgrading the skills base across APEC economies will contribute towards greater efficiency, enhanced technology flow and increased productivity, resulting in more efficient and effective utilisation of resources.

(b) Spawning new entrepreneurs: Small and medium enterprises form the backbone of our economies. A thriving SME sector is crucial for the successful adjustment to the rapidly changing business environment. As such entrepreneurial skills should be encouraged and their growth promoted.

(c) Technology skills for the new millennium: The workforce must be equipped with new skills to match the rapid pace of transformation from an industrial economy to an economy that is characterised by greater use of new technologies such as information technology, biotechnology and composite/advanced materials.

(d) Strengthening institutional infrastructure to facilitate trade and investment liberalisation: The promotion of trade and investment liberalisation must be supported by corresponding efforts to strengthen the institutional capacity required to enable effective response to market demands. This includes the capacity for more effective implementation of facilitation and supervisory measures.

Approach

8. To intensify skills development efforts, APEC should encourage implementation of the projects on an on-going basis. Such efforts should be intensified through voluntary sponsorship/joint sponsorship from APEC economies. The Partners for Progress (PFP) approach could be adopted.

9. Funding of projects on a sustained basis is a critical issue. Economies could seek the participation of the business sector, where possible, to undertake such projects. As principal beneficiaries of TILF activities, the private/business secto should be encouraged to contribute to APEC's longer term capacity building measures such as skills development. Businesses with interests spread across the region are well-placed to contribute towards such efforts.

10. Another approach is to encourage public-business 'smart partnership' in skills development. The provision of technical skills undertaken by the public sector faces increasing constraints in terms of funds, expertise and equipment. The result is a mismatch between training and the real work environment. A more effective approach is to encourage a market-driven approach to skills training emphasising greater business participation. While the public sector is able to provide training for more generic skills, business involvement is necessary to ensure that the output matches market demand.

11. An APEC network of skills development centres will enable cooperation resulting in benefits in areas such as programme development, exchange of training modules/instructors and sourcing of instructors/equipment. This will also complement other APEC initiatives on human resources development such as mutual recognition of skills training qualifications.

Conclusion

12. The Action Programme on Skills Development, by drawing out sustained and concerted efforts on skills development with direct impact on the beneficiaries, will contribute towards maximising the potential for economic growth and improving the well-being of the people of the region.