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The West needs Asia's growth momentum to help it emerge from its protracted slump, so Asia should drive a harder bargain in global negotiations, says Indian tycoon.

The countries in Southeast Asia should start flexing their muscles in the world as some others in the region have done, says one of the continent's most successful businessmen.

"It is important that we negotiate from a position of strength, as we have seen with China which has done a good job because for every one hand they give, they take back with two hands," said Azim Premji, the chairman of the Indian software giant Wipro.

Mr Premji, a self-made billionaire, says that countries in Asia tend to put more than required on the table, and despite being so generous, countries such as India are labelled as being "bureaucratic".

But even as they engage with the world, countries in the region should continue to pursue growth in intra-regional trade to help offset any major slowdown in the western hemisphere.

However, Mr Premji himself is far from downbeat about the future of Europe or the United States.

Wipro, which counts Fortune 500 companies including GE among its major clients, says its talks with these clients indicate that things are on the mend and business conditions are not as bad as portrayed in the media.



"There is too much pessimism in the market," he said at a recent seminar held by the Thailand Management Association. "I do not see the western world undergoing a major recession. Yes, there will be some slowdown in Europe and United States but it would not be a big slowdown."

In any case, he said, one way for Asia to immunise itself against a slowdown is "to build trade with our neighbours".

With the growth of the region increasing the importance of countries such as Thailand, these countries need to be more than just processors based on cheaper labour cost but must move up the value chain and find a niche for themselves.

"The Far East needs to graduate to higher-end services and not try to focus on labour arbitrage," he said.

One way to move up the value chain is to invest in education. Citing the example of India, Mr Premji said that as many as 650,000 students graduate in India with engineering degrees each year against just 100,000 in the United States and 35,000 in Germany, a country that is renowned for its engineering.

But the stark need for India there to upgrade its educational system is underlined by the fact that only one third of its 650,000 engineering graduates are actually employable in the information technology or telecom sector, areas that require high degrees of expertise.

Mr Premji says the near-term goal should be for at least 50% of engineering grads to be employable in IT and telecoms. A similar strategy should be applied across Southeast Asia which has more than 600 million people.

But to be able to achieve a larger base of educated and skilled workers, the region needs to lift the restrictions it has placed on the movement of people.

Wipro recently opened an office in Bangkok and wants to expand in Thailand and across the region in a big way, but various government restrictions are a hindrance, said Mr Premji.

Wipro, which serves some major Thai clients such as Kasikornbank, wants to increase its current local staff from about 100 people now to between 200 and 250 in a year or so and to as many as 500 in the next three years.

Mr Premji says existing government restrictions on hiring foreign nationals are not a big problem, though he believes it should look at relaxing the rules or phasing in changes in stages.

Citing the need to train people to serve as junior and middle managers, he said that a phased-in system would work best.

Countries that now impose restrictions on foreign skilled workers could allow in as many as possible in the first few years, and then reduce the numbers over a certain period.

This approach, he says, would allow time for companies in specialised work such as Wipro to be able to train local people in the required skills.

He says more multinationals are finding that they need to be able to expand their operations in Asean because they feel they are overexposed to China.

Among the countries that have good potential in Asean are Thailand, Vietnam and Philippines, he says.

Currently Wipro has 2,000 staff in the Philippines and the next big wave would likely be in Vietnam, where Mr Premji says the people are hard-working and the educational system is good.
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