Vietnam looks to escape labour trap

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The Minister of Labour, Invalids and Social Affairs (MoLISA) planned to draw up a training development strategy which give top priority to foreign investors developing high-quality vocational training schools, MoLISA deputy minister Nguyen Ngoc Phi told the VIR-led workshop on boosting foreign direct investment (FDI) in Hanoi.

The schools would be developed using investment forms including wholly foreign-owned investment, joint ventures and public-private partnerships, said Phi. 
     
“I hope this is a positive message for businesses, particularly FDI enterprises and will get them looking at investment opportunities in Vietnam’s education and training system,” he said.      
He said Vietnam had implemented a raft of measures to develop education and training including international cooperation. In 2011, the Japanese government agreed to provide $450 million in official development assistance for education and vocational training in Vietnam, of which $130 million was for vocational training.

And during her visit to Vietnam last year, German Chancellor Angela Merkel pledged to build a high quality vocational training in the country. Phung Xuan Nha, vice president of Vietnam National University, Hanoi said: “We cannot rely totally on foreign investors to improve the quality of our workforce. While the participation of foreign investors in this process is vital, it [improving the quality of the workforce] is the role of the government.”

The development of a more highly-skilled workforce is essential to Vietnam’s goal of basically becoming an industrialised country by 2020. At the same time, Vietnam’s 2011-2020 national socio-economic development strategy defines developing and raising the quality of human resources, especially a high-quality workforce as a strategic breakthrough.

This is part of the government’s commitment to meet businesses’ demand for skilled labour.   
However, the Vietnam Chamber of Commerce and Industry’s Provincial Competitiveness Index report 2011 showed only 34 per cent of businesses in Vietnam were satisfied with the quality of vocational training.      

Meanwhile, according to a recent research conducted by the Foreign Investment Agency (FIA) and United Nations Industrial Development Organization, 32 per cent of foreign investors in Vietnam said the shortage of skilled workers was the biggest reason they were not operating at full capacity.

“The severe shortage of trained workers, qualified engineers and excellent managers continues to be a barrier to FDI inflows, slashing the competitiveness of the investment environment in Vietnam,” said Minister of Planning and Investment Bui Quang Vinh.    

FIA director Do Nhat Hoang added: “The shortfall of high quality human resources is inherent, but it has become more serious in recent times with Vietnam trying to attract high-tech FDI projects”.           

Toyota Industrial Equipment Vietnam director Kotaro Takeuchi, said: “We are worried about recruitment in Vietnam as our under-construction company is about to become operational and we will start employing people in September 2012. The specific characteristic of our company is labour-intensive because we specialise in assembling automobiles and producing spare parts.”

Christopher Jeffery, dean of British University Vietnam, said: “In terms of investment, money is important but what can we do with money and no skilled workforce? If you have good infrastructure and foreign direct investment, a skilled workforce will help companies in your country succeed.”

Vietnam’s population reached 87.84 million in 2011, including 66 million aged between 15 and some 50 million people at working age.

The number of trained workers increased quickly, from 5.9 million in 2000 to 20.1 million in 2010. The country targets to raise the rate of trained workers to 70 per cent in 2020 from 40 per cent in 2010.