TransFormation Forums: One of the Main Hurdles for Growth in Latin America & The Caribbean is the Lack of Qualified Personnel

The Panamanian Minister of Labour, Luis Ernesto Carles, closed on the 22nd October in his country, the series of international forums on job training that was held during this year in different Latin-American countries at the initiative of the Inter-American Development Bank and with the support of several organizations among them the EU-LAC Foundation.

Brazil, Chile, Colombia, Mexico and Peru, along with Panama, were the hosting countries where experts in education and employment have discussed from a national and regional perspective how the lack of job training affects the productivity, and thus addressing one of the main bottlenecks that affects growth in Latin America and the Caribbean.

Experts compare Latin-American labour market to a jigsaw in which the pieces do not fit together; in other words, there is a mismatch between workers’ skills and the needs of the productive sector, which has a negative impact on the capacity for growth and development.

The data provided by the IDB is worrying: nine out of ten entrepreneurs from countries like Argentina, Brazil, and Chile, cannot find workers who comply with the abilities required to produce competitively, in spite of the fact that there are around 22 million of young people who neither study nor work in the region, with the risk to be left out of the social structure.

With regards to Panama, with around 240,000 young women and men outside the education system and without a job, 50 per cent of the enterprises cannot find qualified personnel to cover the vacancies, and just 9 per cent of these companies provide training or internship programmes.

In addition to that, according to the data provided by Tomás Bermúdez, representative of the IDB in this last forum of the series TransFormation, in order for Panama to keep growing, the Panamanian logistics should create 100,000 workplaces for next decade.

Carles went on by saying that apart from the number of problems that need to be tackled by his ministry, there is a the breach between the formal sector and the informal one, for although the unemployment rate in his country is under 4 per cent, the underground economy employs almost 39 per cent of the workers.

This was the reason why the Minister spoke about the necessity of stopping the “informalities” and articulating public and private policies, but also creating dual programmes that combine theoretical knowledge with hands-on workshops, and also taking the vocational training to the workplaces where those young people will end up being formally hired.

“The government, universities and training centres have a commitment to the private enterprises to generate instruction and specific skills for young people to cover the labour demand”, the minister emphasized and announced that Panama will create 260,000 quality jobs in five-year’s time.

In Panama, as it had already been done in the TransFormation seminars held in Brazil, Chile, Colombia, Mexico and Peru, experts analysed models of capacity centres-enterprise partnership that showed the value of the skills as the driving force for development.  A highlight is the regular lack of bond that often exists between university programs and the needs of the labour market, which then requires greater collaboration between academia, professional training and the private sector.

The models presented by Australia, South Korea, Austria, Check Republic, Germany, the United Kingdom, among other EU countries, also showed that those training systems, be it through traditional educational or vocational training, that are directly linked to the labour market are much more efficient in  promoting youth employment.

Experts argue that the later the breach of abilities is tackled, the greater the distance that divides Latin-American economies from the world’s most productive ones; thus, there is an urgent need to establish a training system for employment with high quality standards and relevance, to count on a proper institutional framework for this new system and to include employment training in the productive sector.

For further details on Transformación Forum series check the official website here.