Singapore

Professionals wanted

• IT professionals
• Financial services professionals
• Non-IT engineers
• Lab technicians
• College lecturers
• Doctors
• Architects
• Advertising account executives
• Sociologists, anthropologists, psychologists
• Historians

Status of economic agreement

The 2005 pact removes restrictions on movement of Indian professionals in 127 occupations. However, movement of Indians hasn’t taken off due to Singapore having issues of recognition of Indian qualifications.

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South Korea

Professionals wanted

• IT professionals
• Non-IT engineers, especially in telecom
• Management consultants
• Product researchers
• Advertising professionals
• English language teachers
• Survey managers

Status of economic agreement

The CEPA, which became operational from January 1, 2010, allows movement of Indian professionals in 163 occupations. However, like Singapore, issues of recognition of Indian academic qualifications will initially hold back movement.

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Europe

Professionals wanted

• IT professionals, especially network professionals
• School teachers
• Doctors, nurses and caregivers
• Management accountants
• Auditors
• Engineers
• Economic consultants

Status of economic agreement

Six rounds of talks completed; seventh in February. Talks have focused mostly on goods, with the EU seeking liberal investment limits and access in select sectors. In services, so far, only wish-lists have been exchanged.

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Japan

Professionals wanted

• IT professionals
• English language teachers
• Doctors, nurses and caregivers

Status of economic agreement

Talks likely to resume following recent statements from the Indian and Japanese PMs to sign a pact this year. Although Japan is reluctant to allow a liberal inflow of foreigners, it has no choice given its declining and aging population.

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Sometime while pursuing his graduate degree in architecture from Anna University in Chennai, Austin Chandrasekaran figured out what he wanted from a job: the opportunity to work on projects outside India and with the latest techniques. India, he felt, would give him neither. A college senior, Siva Kumar, told him that Singapore would, but chances of him landing a job in an architecture firm there with his Indian degree were next to nothing. So, he enrolled for a one-year master’s course in Singapore, which allowed him considerable access to the job market there.

India has signed pacts with Singapore and South Korea. It is negotiating with the EU and Japan. Next up, Australia, Canada and Israel.

Today, 29-year-old Chandrasekaran works in the Singapore office of Lend Lease, a $13.7 billion Sydney-based real estate firm. In his five years there, he has executed large office and residential projects in Dubai, Doha, Bangkok, and Mauritius, besides, of course, Singapore. For all this, he earns 5,000 Singapore dollars (Rs 1.63 lakh) a month—about two to three times what a classmate from his graduate days would be making in India. “The course in Singapore helped me get a toehold in the job market there,” says Chandrasekaran. The twisty route he took to find work in Singapore is paying off.

In the coming years, architecture graduates from India might not have to take such a long-winded route to work in Singapore. Their Indian graduate degrees should suffice; and Singapore and its architects should be more welcoming to them. The open passage is the result of an agreement the governments of India and Singapore have hammered out, and whose nitty-gritty is currently being sorted out. The agreement, signed in July 2005, allows unrestricted movement of Indian workers to Singapore on a one-year work permit in 127 skilled professions. In August 2009, a similar agreement was signed with South Korea.

‘W’ For Won: Korea is hiring English teachers by the thousands. Monthly pay: 2.7 million won (Rs 1.1 lakh).

Annexure 8A of the agreement with South Korea lists 163 professions in which it has allowed liberal movement of Indian white-collar professionals. It’s quite a range. There are about 35 kinds of IT professionals alone (for example, hard-disk developer, network consultant, Internet network operations engineer). There are a host of industrial engineers (natural gas chemical engineer, car electronics engineer, ship engineer and researcher). There’s an assortment of other professions, ranging from the expected (biologist, game graphics designer) to the unexpected (assistant English teacher for primary and secondary schools, and advertising professional).

Due to an aging and declining population, Japan will need 30 million immigrants over the next half century; the EU, 56 million by 2050.

And it’s not just Singapore and South Korea. The Indian government is currently negotiating such agreements with 29 other countries, and plans to initiate conversations with 13 more, to enable Indian white-collar professionals to cross over easily. The centrepiece of these talks is the most inclusive type of trade pact, called the Comprehensive Economic Partnership Agreement (CEPA), which covers movement of both goods and people (a free trade agreement, or FTA, covers only goods).

So far, India has signed two CEPAs, with Singapore and South Korea. It is currently negotiating for two more on the same lines, with the European Union (27 countries) and Japan. “We will announce talks with Australia, Canada and Israel next month,” says a top government official. And subsequently, it wants to do the same with Asean (10 countries) and New Zealand. Collectively, these 44 countries account for about 50% of India’s trade.

“The government has realised that most of India’s gains from globalisation will be from the services sector,” says Amarendra Khatua, Joint Secretary in the Commerce Ministry, who is involved with the negotiations. “That’s why the focus (of trade talks) is on facilitating the movement of people.”

Around 80,000 nurses graduate in India every year. An entry-level nurse, who earns about Rs 30,000 in India, can earn Rs 2-4 lakh abroad.

That India, the second most populous country, should be a talent supplier to the world is something of a given. It’s been articulated before. The developed world is facing a shortage of skilled professionals. Given its current level of economic activity, India can afford to let some of its professionals go for short bursts, buoyed by the promise of gains in other forms or at a later date.

Indian professionals abroad send back money, which adds to India’s foreign exchange coffers. In 2008-09, they sent back $44 billion, which is more than the foreign direct investment that came into the country that year ($27 billion). They acquire experience and wealth, which they come back and use to set up businesses. When India sits down on the diplomatic table with nations, it uses this human capital as a bargaining tool. The idea has merit.

What we are seeing now—for the first time and at the highest levels of government—is movement to convert that idea into reality. The government is moving quickly at the diplomatic levels. However, the thought and urgency being shown at the diplomatic level is not being complemented by an attention to detail at the policy level, which blunts the power of a trade pact to make a real difference.

At $44 bn, remittances exceeded 2008-09 FDI by 60%. If this is with unskilled workers, imagine what skilled workers can add.

For example, though Singapore has allowed Indian architects to come and work there, there’s no clarity on which Indian architecture degrees are recognised and which are not—something that should have been there in the agreement, but was left for later. As a result, not many architects have hopped across to Singapore yet. Similar detailing has reined in movement of Indians in other shortlisted professions also. That’s the concern. How India deals with issues like this will determine how much it is able to unleash this idea and turn it into a sustainable competitive advantage.

Demographic Shift

Really, it’s India’s opportunity to lose. The changing demographics of many advanced economies are working in India’s favour. In those countries, the working-age population (15-64 years) is expected to shrink sizeably over the next generation. On the one hand, they are seeing fewer births every year. On the other, their life expectancy is increasing. So, the number of people who need to be supported is increasing, but the number of people who can support them is not seeing a corresponding increase.

Europe and Japan are two regions that will see this scenario unfold in an extreme form. According to the European Commission, the working-age population in Europe is expected to decline from 309 million in 2005 to 253 million over the next 40 years. In Sweden, for instance, 2010 will be the first year when the number of people joining the jobs market will be less than the number of retirees.

Labour Pains: Barring the UK, English is not spoken much in Europe. Nurses may have to learn the local language.

Around 56 million immigrants would be needed to compensate for the projected reduction in the working-age population in the European Union (the present immigrant population in the EU is 31 million). It is especially hungry for IT professionals, engineers, nurses and teachers. According to IDC, a global intelligence data-provider, the EU will face a shortage of 500,000 IT networking professionals by 2010.

The government has realised that most of India’s gains from globalisation will be from services.Amarendra Khatua, Joint Secretary, Commerce Ministry

Similarly, according to Japan’s health ministry, the country’s population is expected to fall from 127 million in 2005 to 95 million in 2050. Worse, its labour pool is expected to shrink by a debilitating one-third from current levels. Unless robots become smart and flexible enough to take over many human functions, Japan will need to bridge a significant part of this gap through immigrants.

The Tokyo Immigration Bureau estimates that Japan will have to accept about 30 million immigrants over the next 50 years. High on the list are IT workers, nurses and English language teachers. Even Keidanren, Japan’s main industry federation, favours immigration. It has projected a drop of 6.1 million in its working-age population by 2025.

It’s a paradox. On the one hand, with job losses caused by the economic slowdown and the increased threat of terrorism, many developed countries are tightening their visa norms. On the other, their long-term demographic trends are such that they will need foreigners to meet shortfalls. In time, they will be forced to shed some of their reluctance to allow foreign workers, especially those from developing nations. Japan, all these years, has zealously restricted free movement of workers into the country. Of all the developed nations, the Asian tiger has the lowest percentage of immigrants—outsiders constitute less than 1.5% of its population. But for how long?

Many nations would be comfortable with Indians filling up jobs in their services sector.Pritam Banerjee, Head of International Policy and Trade, CII

As they open their doors wider for foreigners, India, with its emerging demographic advantage, has to swoop in, says Pritam Banerjee, Head of International Policy and Trade, CII. “Many countries would be comfortable with Indians filling up jobs in their services sector,” says Banerjee. “It’s an opportunity for India while negotiating bilateral trade treaties to get concessions for movement of persons.”

Give And Take

Developed nations are looking to control the nationalities of the people they allow in and the professions they allow them in. That kind of balance between freedom and control is virtually impossible to attain through a multilateral agreement. And that’s been the case so far.

Under the World Trade Organisation (WTO), countries signed an agreement in 1995 for the services sector called the General Agreement on Trade in Services (GATS). However, the part in the agreement that governs the movement of people is the weakest and largely remains the prerogative of each country.

Incoming Call: Always reluctant to allow foreigners in, Japan may not have a choice with its shrinking workforce.

Under GATS, 161 services are classified under 12 broad sector heads. Each service is classified under one or more of four modes, based on the complexity of its delivery. Mode I deals with cross-border services (for example, BPO firms in India servicing clients in the US). Mode II, with overseas consumption (foreigners spending on tourism in India). Mode III, with commercial presence (how much equity can a foreign entity hold in a particular sector).

The opportunity is emerging, but cultural differences and language would be limiting factors.E Balaji, CEO, Mafoi Management Consultants

Mode IV, with the movement of people (Singapore allowing Indian architects to work there), which is what India is pushing for, to press the advantage of its growing workforce.
Every country in the WTO has made time-bound commitments on all four modes. While most countries are liberal in opening up Mode I and Mode II, they are circumspect with Mode III and Mode IV. Developed nations want more access for their companies under Mode III, but the developing countries fear it will wipe out their domestic industry. Similarly, developing nations want more access for their people under Mode IV, which developed nations are not comfortable with.

Since countries have committed a bare minimum under WTO, they have taken the Mode III and Mode IV negotiations to the bilateral level. Says Manab Majumdar, Assistant Secretary-General, Federation of Indian Chambers of Commerce and Industry (Ficci): “India should seek a mix of Mode I and Mode IV access, whereby some work is outsourced to India, but professionals are able to travel and work at the client’s place for a short duration.”

The services sector is India’s selling point. Mode IV access has been a critical part of the agreements it has signed with Singapore and South Korea. Likewise, for the two agreements it is currently negotiating, with the EU and Japan. With the EU, seven rounds of talks have happened. So far, the talks have centred around goods. In services, the two countries have presented ‘wish lists’—what each wants from the other. With Japan, talks had stalled, but are likely to be revived following recent statements of intent from the Prime Ministers of the two countries to sign the pact this year.

The last time the government consulted us was in 1998, for a WTO conference.Sheila Seda, Secretary-General, Trained Nurses Association of India

In both these instances, it’s the industrial strength of those countries versus India’s human capital. The EU wants India to open up industries like automobiles, chemicals, industrial machinery, insurance and retail. It also wants to participate in government orders. Japan reportedly wants greater access for its companies in high-end plastics, petrochemicals and machinery goods. India, on its part, wants its professionals to be able to access their jobs. In large numbers. With great ease.

Delay In The Detail

That means nailing the agreement to the point where movement can begin. It’s not happening at present. One of the 163 professions in the CEPA with South Korea is assistant English teachers for primary and secondary schools. The Korean government runs a programme to hire English teachers from abroad, at a pay of 2.7 million Korean won per month (or Rs 1.1 lakh). It hires around 4,000 teachers a year, but only from “native English-speaking countries”. Hence, Indian teachers don’t qualify. The CEPA also bars Indian teachers from teaching in private institutes, which is where most of the jobs are. So, the agreement is ineffective. India is renegotiating both these clauses with South Korea.

Even the Singapore pact, signed five years ago, hasn’t delivered because of the government’s inability to wade through the fine print. The number of work visas issued by the Singapore embassy to Indian residents is unavailable, but anecdotal evidence suggests we are nowhere close to the desired movement.

Mutual-recognition agreements on academic qualifications should be drafted in the agreement.Manab Majumdar, Assistant Secretary-General, Ficci

Take the case of architects. The 2005 pact did not get into conditionalities. As a result, Singapore recognises degrees from only select colleges in India. The Indian Institute of Architects (IIA), the nodal body of architects, wants Singapore to recognise degrees awarded by all the 150-odd institutes that are registered with the statutory body, the Council of Architecture. “My registration under the Architects Act, as passed by the Indian Parliament, should be acceptable in Singapore,” says Balbir Verma, a former president of IIA who is also the point person for trade-related matters. This ambiguity over recognition of degrees extends to other professions too.

Ficci’s Majumdar says India needs to start aligning its domestic regulations with that of other countries during the negotiation process itself. “We need to have mutual-recognition agreements (MRAs) on academic qualifications in the agreement,” says Majumdar. That means the agreement should state the qualifications required for each of the professions listed in the agreement.

Says CII’s Banerjee: “Since there is no time-bound commitment to conclude MRAs, there is no actual commitment when countries agree to allow movement of persons in agreed professions.” A senior government official who is involved in the trade negotiations agrees that MRAs should be drafted into the agreement. But, he says, “I need to get the agreement done.”

We have a team in place that interacts with the government on bilaterals and WTO.Kunal Banerjee, Former President, Institute of Cost and Works Accountants of India

While the official is pleading the pressure of time, Majumdar is pointing towards working with stakeholders. For instance, Indian nurses and care-givers are in great demand in developed countries, but the government has neither cared to ask them what they want nor tell them what they need to do to cross over. During the negotiations with EU and Japan, the Trained Nurses Association of India (TNAI), which has 200,000 nurses and students in its fold, hasn’t been consulted even once. “The last time we were consulted was in 1998, in preparation for a WTO ministerial conference,” says Sheila Seda, Secretary-General of TNAI, a nurse herself with about 20 years of experience. Verma of IIA has a similar story to tell. “The last time I was consulted on bilaterals was in 2005,” he says.

Today, the onus is mostly on the apex bodies of the professions to be proactive and push their interests. The Institute of Cost and Works Accountants of India (ICWAI), which regulates the cost-accounting profession, is more an exception than the norm. It has got its degree recognised by corresponding bodies in the US and UK. In the US, an ICWAI graduate can get an equivalent degree without having to write any more exams. In the UK, on passing a qualification exam, the ICWAI graduate is exempted until the final stage.

“In the one-year period after the UK agreement, about 1,500 Indian students have appeared in the qualification exam conducted by the UK-based institute,” says Kunal Banerjee, the last president of ICWAI. Those are the kind of results the government would like to see in other professions as well.

The thought and urgency at the diplomatic level is not being complemented by an attention to detail at the policy level.

If it does not see those results, the government has only itself to blame. “We don’t do enough homework or preparedness at home to capture the market,” says Biswajit Dhar, Director General, Research and Information System for Developing Countries (RIS), a New Delhi-based research body that focuses on international trade. Barring IT and financial services, most other service sectors don’t have repositories of data. For example, there is no data on how many nurses are hired every year by hospitals in India, on how many have gone out of the country, or on how many have come back. Even their salary details are sketchy.

“We also don’t gather enough economic intelligence,” adds Dhar. All consulates have commercial officers, who, besides promoting trade ties, are also supposed to carry out economic intelligence. They look for answers to basic trade questions that would be of interest to an Indian exporter or importer. For instance, which are the goods the country is not self-sufficient in? Which are the goods that offer India a distinct price advantage over another country, an advantage that it hasn’t tapped? Where does it need people? What kind of profiles is it looking for? How do Indian professionals need to reorient themselves to adapt culturally?

Crossing The Cultural Divide

Working as a French teacher in The American School in Chennai, Anuradha Raju often heard her American colleagues make fun of the way Indian teachers, even those who taught English, pronounced the alphabets ‘v’ and ‘w’. “There might be a need, but landing a job is not easy, as many Indian teachers lack soft skills like proper pronunciation and exposure to modern teaching methods,” says the 58-year-old Raju, now the Vice-Principal of St John’s International School in Chennai. It’s especially a challenge when Indian teachers have to compete against those whose first language is English, as is the case in South Korea.

Language is, in fact, a big barrier. Barring the UK, English is not spoken much in most of Europe. Nor in Japan. In professions where communication is an integral part of the job, like nursing, learning the local language will be necessary. “Certainly there is an opportunity emerging, especially in European markets, for Indian talent. But barriers like cultural differences and different languages would be limiting factors,” says E Balaji, Chief Executive Officer of Ma Foi Management Consultants, which has offices in Europe and has placed Indians in those markets.

Says TNAI’s Seda: “If the monetary benefit is adequate, motivated nurses will take the initiative to learn the foreign language in less than a year.” TNAI, in fact, has asked the nursing regulator to include a foreign language as one of the ‘option’ subjects in the nursing course.

Cost And Benefit

Seda’s greater concern on India exporting talent is whether this will come at the cost of the domestic economy. “We welcome the movement of nurses outside India for greater recognition, conducive working environment and to learn technological advances,” she says. “But it’s a paradox, as we have a shortage in India.”

As it is, the patient-to-nurse ratio is dismal in India. Although there are about 80,000 nurses graduating every year, Seda feels that if both emigration and domestic recruitment pick up at the same time, the cost of hiring a qualified nurse will increase rapidly. This will increase the cost of healthcare sharply. Entry-level nurses in Central government hospitals currently earn Rs 30,000 per month. Abroad, they can earn Rs 2-4 lakh per month. So, there is a huge incentive for them to go out. Since these agreements are tailored to facilitate movement of skilled professionals, it raises concerns of a ‘brain drain’.

At the same time, there are benefits. Even after 13 years in the profession, Sarina Jose was earning a meagre salary of Rs 15,000 per month teaching in a private school in Chennai. She’s now off to Santa Clara, California, to teach Maths, at a salary of $54,000 a year. What she made in a year here, she will make in a month there. She plans to send some of it back to India to her family. In 2008-09, at $44 billion, remittances were India’s second largest export head, after IT/ITES ($45.2 billion). This is precious foreign exchange for the country. And unlike investments by foreign investors, remittances don’t come in and go out depending on which way the economic wind is blowing. If this is what unskilled workers can do, imagine what skilled workers can add.

Besides, in liberalised India, going abroad is not seen as an escape hatch anymore. It’s seen more as an opportunity to gain precious experience working with the best and building wealth. A lot of that personal experience and wealth is being poured back into the economy in the form of entrepreneurial ventures, a case in point being the Indian IT and ITES industry.

Jose is going abroad by the dint of her effort. As did Chandrasekaran, the student of architecture, before her. The system did not enable it. But, progressively, it will for people like them. And that could change lives.