South East Asian Economies Must Scale Up for Growth

The South East Asian countries are on a journey from agriculture and industry to value-added services. To reach their destination, they are looking to increase both inward and outward investment. That, in turn, requires a significant increase in finance professionals.

Foreign investment to the region has increased massively over the past decade. Vietnam, for example, has seen an increase in investments from 33% of GDP in 1999 to 43% in 2009, while foreign investment to Indonesia is growing at a rate of 46% year-on-year. And the targets for future investment remain high: Malaysia wants to increase private investments from 2% in 2006-2009 to more than 12%, aiming for 20% of investment in new projects to come from abroad.

To achieve that, they need to climb the global competitiveness ladder. Currently, Malaysia ranks 24th, Thailand 36th, Indonesia 54th and Vietnam 75th on the World Economic Forum’s Global Competitiveness Report 2010-2011. Vietnam and Indonesia have made leaps up the ladder, while Malaysia and Thailand have fallen slightly.

To quote co-author of the report Xavier Sala-i-Martin, who is Professor of Economics at the Columbia University in the US: “For economies to remain competitive, they must ensure that they have in place those factors driving the productivity enhancements on which their present and future prosperity is built”. Financial market development is one of the pillars assessed in the report and having enough qualified finance professionals is undoubtedly a key piece in that puzzle.

Increased transparency and the ability to balance risk and reward are other fundamental requirements for these ambitious investment and growth targets to be realistic. Both bring a greater need for qualified professionals across the economy; we need skilled auditors, book keepers, CFOs, government officials, standards setters and regulators.

While demand is already acute in many countries, it is likely to become even more pressing. Therefore, it is critical that real efforts to raise the quality of the region’s finance professionals and to increase the numbers are put in place. It takes time to build up a pool of highly skilled professionals. If we hide from the challenge for another few years, the only option will be to import skilled accountants and other finance professionals from other countries – a solution that inhibits rapidly-growing countries from standing on their own feet.

To strengthen the accountancy profession in each of these countries, there are several challenges to be overcome:
• We need to change the perception of the value of the profession – many employers do not see the point of an accountancy qualification. We therefore need to demonstrate more clearly what an important role qualified accountants can play in, for example, increasing transparency
• Work needs to be done on increasing the access to the accountancy profession from outside of the main cities; Jakarta, Bangkok, Hanoi, Ho Chi Min City and Kuala Lumpur. This is a pre-requisite for a broadening of the skills base and also for increasing the number of qualified accountants and other finance professionals
• Finally, despite the region’s close proximity to China, English still remains the universal language of business. Improving the English proficiency is therefore also important.
All of this can be achieved if we work together – and start straight away.