Vietnam has failed to improve labour productivity over the last 10 years according to experts at the conference on enhancing national competitiveness on March 21.
Nguyen Duc Thanh, head of the Vietnam Institute for Economic and Policy Research (VEPR), said Vietnam had failed to transform labourers into skilled workers in the past 10 years.
According to Thanh, labour productivity in Vietnam is much lower than in other ASEAN countries, let alone Singapore or China. Cheap and unskilled labour currently still accounts for the majority of the workforce, including in rural areas. Vietnam is still struggling to develop skilled workers for other sectors.
“Lack of investment, working environment and the low technology usage in Vietnam are an issue. It explains why we are still in the group of low-income countries in ASEAN and Asia,” Thanh said.
Vu Tien Loc, chairman of Vietnam Chamber of Commerce and Industry (VCCI), said Vietnamese labour productivity in 2007 was estimated at USD10,232, accounting for 7.2% of the Singapore’s, 18.4% of Malaysia’s, and 36.2% of Thailand’s.
Japanese Ambassador Kunio Umeda said Vietnam’s economy was experiencing rapid growth in recent years and attracted a lot of foreign investment. This was an opportunity to solve several problems, including low labour productivity.
Experts from VEPR said the labour productivity in the state-owned firms was the highest in Vietnam. “It’s because state-owned firms enjoy huge incentives in terms of capital, technology and market monopoly,” Thanh said.
Many private firms do not have the capacity to make huge investments in infrastructure, technology and have trouble finding markets. Meanwhile, they use an enormous number of workers compared to state-owned firms.
“Many factors affect each other and pull down the labour productivity,” Thanh said. “This problem needs a long-term solution and patience. We should implement measures from expanding the market for certain products, help the private sector expand, and improve the training of skilled labourers.”