MANILA, PHILIPPINES - ASIA is facing a serious skills shortage that could hamper the region's economic growth and push for modernisation, the Asian Development Bank said in its annual outlook report released on Wednesday.

The Manila-based ADB said the shortage was widespread and had been partly driven by skilled workers leaving to take opportunities in industrialised countries around the world.

'Although this brain drain is hardly new to the region, the skills shortage confronting it has added a new, more urgent dimension to this trend,' the bank said, calling the shortfall a 'symptom' of Asia's economic success.

'Such imbalances are particularly evident among professional groups, including accountants, airline pilots, business managers, engineers, lawyers, medical doctors, scientists and software specialists.' As one example, it cited what it called an 'acute shortage' of airline pilots in China, where a booming economy has meant rising incomes and an explosion in air travel.

'Other factors are at play, too, including a steady convergence towards international norms and practices for environmental standards, corporate governance and financial regulation,' the bank said.

'This upgrading raises the demand for professional managers and specialists.'

The report said the overall dearth of skills had resulted in 'productivity losses and idle capital; rising wage costs; increased turnover of sought-after workers; and higher placement and training costs for new workers.'

'Business efficiency suffers as a result, and if problems are sufficiently widespread, whole industries and even entire economies suffer,' it said, warning that most nations had not geared their education systems to cope.

'The region's universities have to do more than produce high numbers of graduates - they have to turn out graduates who can perform the functions and tasks required by rapidly modernising economies.'

Set up in 1966, the ADB provides development aid to dozens of Asian and Pacific countries, where it says nearly 1.9 billion people still live on two dollars a day or less. -- AFP