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APAC Edition
10th February 2025
 
THE HOT STORY
Australia seeks solutions for 'skills mismatch'
As the federal election nears in Australia, a broad coalition of organisations spanning unions and employer groups is increasing the pressure on the major political parties to fix the “skills mismatch” to unlock an estimated $9bn in economic benefits. Research by Deloitte shows that almost 45% of permanent migrants living in the country - roughly 621,000 people - are working in a job below their qualified skill level. More than 201,000 of those migrants are qualified in management and commerce, in excess of 80,000 are qualified engineers and just under 50,000 are trained health professionals. Among some of the recommendations for resolving the problem is the creation of a national governance body in charge of all skills assessment and qualifications. Along with offering means-tested financial help to applicants, the body will set up information centres in areas with high migrant populations. 
WORKFORCE
BOJ blaming chronic labour shortages for weak economic activity
The Bank of Japan (BOJ) is increasingly blaming chronic labour shortages as the main reason for its weak economic activity, which may be used to lift interest rates beyond what was initially expected. Japanese businesses are struggling to hit full capacity not because they can't find customers but because they can't find workers. The BOJ's more vocal concerns about the resulting wage and inflationary pressures mean it will be more inclined to look past economic weakness as it considers raising interest rates further. Japan's rapidly ageing population has led to a dwindling pool of workers, with the country facing a deficit of 3.4m workers by the end of this decade and 11m by 2040. 
Employee sabbaticals benefit companies
Sabbaticals have been shown to have a positive impact on mental and physical well-being, creativity, and confidence. However, many organisational leaders express scepticism about the practicality of facilitating them, as they may not be able to cover the absence or function effectively without a key member. However, the benefits to organisations of offering sabbaticals far outweigh the risks. Some leading companies, such as Adobe, Autodesk, Automattic, Genentech, Deloitte, Bank of America, and the Big Five tech companies (FAANG), have implemented sabbaticals, sometimes forced by their founders. The percentage of U.S employers with formal policies supporting extended leave has doubled from 2019 to today. Offering sabbaticals can be a differentiator to attract talent, increase retention, and rejuvenate long-tenured employees.
Worker housing rents surge in Singapore
In the second half of 2024, rents for worker housing in Singapore increased by an average of 10.8%, driven by a surge in foreign labourers. According to the Dormitory Association of Singapore and Knight Frank, there were 442,900 foreign workers employed in various sectors, while the available dormitory beds totalled 439,198. The report predicts that rents will continue to rise by 5% to 8% in 2025 due to ongoing demand and limited supply. Centurion chief executive Kong Chee Min stated: “Investor interest in the purpose-built worker accommodation asset class has been rising due to its attractive demand-supply dynamics.”
SUSTAINABILITY
Ikea scales back climate ambitions
Ikea has revised its climate target in Australia, citing insufficient electric vehicle charging infrastructure and a lack of a national decarbonisation strategy for the freight sector. The company said: "We want to eliminate carbon emissions from deliveries around the world," but explained that current conditions have necessitated the change.
OUTLOOK
Hong Kong retailers struggle
US sandwich chain Eggslut is closing its only Hong Kong location in Causeway Bay, less than two years after its opening. The Los Angeles-based company announced it would regroup and return “when the right moment comes". The closure, effective February 23rd, adds to the growing list of retailers struggling in Hong Kong's challenging retail environment, where spending patterns have shifted. According to Midland ICI&I, 650 street shops ceased operations in the first nine months of 2024, a 44% increase from the previous year. Retail sales in the city fell 7.3% in 2024, totalling HK$376.8bn ($48.4bn). The retail property sector is also feeling the strain, with rents expected to decline by up to 5% this year. Knight Frank noted, “Numerous negative factors persisted throughout 2024, contributing to a challenging retail environment.”
INVESTMENT
Tax perks for Johor-Singapore SEZ to attract talent
The Malaysian Investment Development Authority (Mida) has introduced a tax incentive package for the Johor-Singapore Special Economic Zone (JS-SEZ) to attract investors and enhance economic collaboration. Announced on February 3, the incentives include a special tax rate of 5% for up to 15 years and a 100% investment tax allowance on qualifying capital investments over five years. Additionally, knowledge workers earning over RM20,000 monthly can benefit from a reduced 15% income tax rate for a decade. Mida's initiative targets advanced manufacturing, global services, tourism, and smart logistics, and aims to drive growth across six districts.
BUSINESS TRAVEL
Air Busan enforces power bank restrictions
Air Busan has implemented a ban on passengers storing power banks in overhead lockers following a fire incident on an Airbus A321 at Gimhae International Airport, which injured seven individuals. The airline described the ban as a “pre-emptive measure” to enhance safety, allowing for quicker detection of overheating devices.
Air New Zealand stops flights to Seoul
Air New Zealand will terminate non-stop flights to Seoul this year due to fleet engine availability issues. Incheon International Airport to Auckland Airport will end flights on March 29, 2025. 
HEALTH & WELLBEING
Pakistan health workers kick off polio drive despite snow
In Pakistan, health workers have commenced a crucial polio vaccination campaign despite challenging snowy conditions. The initiative aims to immunise children against the disease, with officials determined to ensure that "no child is left unvaccinated."
INTERNATIONAL
Legal risk for anyone impeding Elon Musk's efficiency effort
A federal prosecutor appointed by President Donald Trump has asked Elon Musk for information about anyone trying to hinder the work of the billionaire's Department of Government Efficiency, the Trump administration's efficiency effort. In a missive that was posted on his personal account on Musk's social media platform X, Edward Martin, the interim U.S. attorney in Washington, D.C., said any action to threaten or confront employees of the department "may break numerous laws." Martin added: "Let me assure you of this: we will pursue any and all legal action against anyone who impedes your work or threatens your people." Musk posted a thank you in response to Martin's message.
OTHER
Thai Government cuts off power to Myanmar scam hotspots
The Thai Government has cut electricity supplies to five areas in neighbouring Myanmar in an effort to disable sites that have become hubs for online scams. Thai Interior Minister Anutin Charnvirakul said supplies were “not being stopped because the companies violated the contract, but because the electricity is being misused for scams, drugs and call centers”. CNN notes reports that in a number of scam hotspots in Myanmar, where a civil war has been ongoing since 2021, workers are lured with the promise of well-paid jobs before being “routinely held against their will”, with former detainees saying “beatings and torture are common”.

 
CNN
 


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