Vietnam labour productivity growth too slow

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“Vietnam’s economic growth has been mostly due to the growth in the size of the labour force, not the quality,” Loc said at the launch of the VCCI labour market report project on March 4.

The project, to be jointly implemented in 2015 by the VCCI and the International Labour Organisation (ILO), aims to create a detailed report on the Vietnamese labour market from the viewpoint of employers, as well as provide forecasts on labour demand for the next five to ten years and offer policy suggestions to the government in order to increase the quality of the labour force and ensure that it meets the demand of the business community.

According to the VCCI, the quality of the labour force is one of the factors determining whether Vietnam is going to be successful in its restructuring of the economy. A high quality labour force is going to make Vietnamese companies more competitive, which has become increasingly important in the context of Vietnam preparing to sign a number of strategically important free trade agreements along with the Trans-Pacific Partnership in the near future. These moves are expected to increase Vietnam’s appeal to foreign investors, boosting one of the important resources for the country’s growth.

“The price of technology is going down while its sophistication is increasing, so a low labour cost is not going to be a competitive advantage in the future,” said Roy Chacko, a specialist from ILO’s Bureau for Employers’ Activities.

According to data from London-based think tank Overseas Development Institute, Vietnam had a working age population of 52.2 million in 2013, 49.5 per cent of whom were between 15 and 29, but 41 per cent of whom were employed in unskilled occupations. As the country is seeing rapid population aging, experts have advised the country to take advantage of the golden population structure it currently has in order to create breakthroughs in economic growth.