In an effort to strengthen ties, the Indian government signed a MoU with Taiwan on 16th February, Friday. According to the MoU, Indian migrant workers will be able to explore job opportunities in Taiwan thus helping Taiwan with its labor shortages. This collaboration initiative has been taken at a critical point of time when Taiwan is facing acute labor shortages especially in the capital city of Taipei. It has forced the Taiwan administration to look for foreign workforce that goes beyond their conventional Southeast Asian sources. Taiwan, which if referred to as the Rouge state by China is popular for industries in semiconductor production is struggling with an aging population and is solely dependent on 700,000 migrant workers coming from Thailand, Philippines, Indonesia and Vietnam. According to Reuters, these workers are engaged in the manufacturing sector and also work as domestic helps for the senior citizens of the country.
“Taiwan-India relations reach a new high! The MOU on the Facilitation of Employment of Indian Workers, signed by Taiwan in India Rep. Ger & India Taipei association Rep. Yadav, promises mutual benefits for our people, igniting a powerful momentum for even deeper & more fruitful cooperation”, mentioned Ministry of Foreign Affairs, Taiwan in a tweet.
Currently, Taiwan is facing huge labor shortages which is being a major obstruction in the growth of manufacturing, construction, agriculture and hospitality sectors and this MoU can open doors for Taiwan to come to a solution in that regard. Although the particulars of the agreement has not been disclosed publicly yet but the Labor Minister of Taiwan has confirmed that they will be able to decide on the amount of workforce required and the areas in which that could be employed in.
Having said that, let us now look into the probable areas where Indian migrant workers will be able to provide labor and boost the business ecosystem of Taiwan.
Boost to the Hospitality Industry
Growth in revenge consumption has increased post pandemic in Taiwan. It is only because of labor shortage that consumers have been complaining about unavailability of booking arrangements at popular hotels and restaurants because companies have hugely downsized their operations.
Media reports also say that one of the renowned hotel businesses in Taiwan is taking only 70 per cent reservations because it does not have the required manpower to serve guests or clean the rooms.
The MoU that has been signed can work as a major boost in fulfilling workforce shortages for the hospitality industry of Taiwan as the Ministry of Labor has suggested to opening the hospitality industry of the country to 3000 migrant workers.
Address Skilled Labor Shortage in Semiconductor Manufacturing
During the past three years, it has been observed that the semiconductor production segment of Taiwan is struggling to find the right number of engineers at each and every step of the supply chain process. 27,701 engineering positions went vacant in the year of 2021which was 44 percent more than the unfulfilled positions in 2020.
The scenario further worsened in 2022 with 35,167 positions going vacant. Although reports suggest that the global semiconductor market had a reduced workforce demand in 2023, Taiwan again showcased a deficiency of engineers that amounts to 22,820.
In this regard, the MoU will be able to facilitate the semiconductor industry of the country with skilled workforce that is required for companies to fulfill the global demand.
Fulfill Construction Market Requirements
Despite the growth of the global construction market, the amount of labor shortage that Taiwan is facing in this segment is alarming. Infrastructures help a country in building a stable economy but in the case of Taiwan, there is an abundance of projects that need to be completed but there is an acute labor shortage. There is also the factor of inadequate vocational training for laborers and an increasing demand for people with the required physical capabilities. Post covid, the country fell short of 118,000 construction workers which was 1.45 times the shortage that was recognized the previous year. Because of this, the construction sector is also facing instability in raw material prices.
Hopefully, with the recent agreement, India will be able to provide the accurate number of migrant workers who can provide services to the construction sector of the country and help the country get on its feet.
Drive Growth in Agriculture
Aging population and low birth rate has been a consistent obstacle for the agriculture sector of Taiwan. Farming has been one major driving factor for Taiwan’s economy that is carried out by means of small scale farming by families. Being a labor intensive task, an acute shortage of labor has been observed in the recent years, especially post covid that has become highly detrimental to the prosperity of the nation.
With this deal between India and Taiwan signed, the shortage of agriculture labor in Taiwan can now be addressed. India being an agro based country will be able to provide the accurate labor that is required to give a boost to Taiwan’s failing agriculture industry.
Until the specifications regarding the agreement is released, it is hard to say about the possible sectors of Taiwan’s economy that will be addressed but from what is already known, the MoU will definitely help the country in getting the required workforce that can drive the country’s economy forward.