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Productivity low despite high gains
Viet Nam's productivity remains extremely low despite an average yearly rise of more than 5 per cent during the past decade, a report published in Ha Noi yesterday reveals.
The report "Labour and Social Trends in Viet Nam 2009-10" was prepared by the Institute of Labour Science and Social Affairs (ILSSA), and confirms that the country's rapid structural transformation from 2000 has increased worker productivity in the three major economic sectors.
Agricultural employment fell from more than 65 per cent in 2000 to more than 52 per cent in 2007 as workers transferred to industry and services.
Industry
Industrial productivity for each worker was almost VND22 million (US$1,200) in 2007, more than 50 per cent higher than in the services industries and more than six times that of agriculture, says the report.
Although it was less than half the rate of productivity growth in China, the growth from 2000 to 2008 was quite outstanding and higher than all other ASEAN countries and India, said ILSSA Director Nguyen Thi Lan Huong.
"However it was very low in absolute terms," she said.
Viet Nam's average output per worker in 2008 was the lowest but one in the list of ASEAN countries plus India - just before Cambodia.
The country's productivity was more than 61 per cent of the ASEAN average, 22 per cent of Malaysia's and 12 per cent of Singapore's.
Challenge
"Labour productivity is one of the biggest challenges in the labour market in Viet Nam," said International Labour Office (ILO), Viet Nam, director Rie Veis- Kjeldgaard.
Apart from its link to Viet Nam's particular type of economic structure, low labour productivity meant enterprises might not yet be in a market where they could provide maximum value, she said.
It also meant they might not maximise value adding.
The types of jobs on offer did not provide the opportunity to maximise value adding and the skills of workers were also inadequate.
The report - the first of its type for Viet Nam - argues that productivity is a key driver of economic growth and the sustainable wage increases that are essential for poverty reduction.
Labour productivity and competitiveness are intertwined concepts, it says.
Measures to bolsters productivity - such as investing in infrastructure, enhancing worker education and skills and improving workplace health and safety can simultaneously drive competitiveness.
The World Economic Forum's Global Competitiveness Index puts Viet Nam 75th of 133 countries in 2009-10.
It was ranked 70 in 2008-09.
"As Viet Nam continues its integration into the regional and global economy, it has to compete with those that have higher productivity," said the ILO Director.
"If workers were not aware of the importance of self-training to improve their skills, they would lose their home-ground jobs," warned Deputy Labour, Invalids and Social Affairs Minister Dam Huu Dac.
The ILO director said she was convinced that the Viet Nam Government's policy's for industry, macro economic and human resource development would help labour productivity grow.
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