Workers at Duc Giang Garment Company in Hanoi. Labour productivity is a key factor to promote the country's economy. (Source: VNA) Hanoi (VNS/VNA) - Vietnam’s labour productivity has improved but is stilllow in comparison with other ASEAN members, according to a report by theMinistry of Planning and Investment.
Thereport shows that Vietnam’s labour productivity index reached 102.2 million VND(4,400 USD) per labourer in 2018, nearly double that of 2011. In the period2011-2018, the country’s labour productivity increased by an average of 4.88 percentannually, in which the period of 2016-2018 witnessed an average increase of5.77 percent annually.
However,in comparison with other countries in ASEAN, Vietnam's labour productivity isstill low. This means that Vietnam’s economy is facing a huge challenge tocatch up with other countries. If measured by purchasing power parity (PPP)value in 2018, Vietnam’s labour productivity reached 11,142 USD, only 7.3 percentof Singapore, 19 percent of Malaysia, 37 percent of Thailand, 44.8 percent ofIndonesia, and 55.9 percent of the Philippines.
Ministerof Planning and Investment Nguyen Chi Dung said improving Vietnam’s labourproductivity is an urgent task, playing an important role to promote growth,overcome the middle income trap, avoid falling behind and narrow thedevelopment gap with countries around the world. However, this taskshould be solved in the long-term, he added.
Expertssaid it is necessary to understand the capacity of workers and why Vietnam’slabour productivity is still low in order to find solutions, which must beradical, effective and comprehensive and capable of covering all causes.
Chairmanof the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said that Vietnam’scompetition has mainly been based on cheap labour and low costs of raw materials.This has occurred for a long time, making many Vietnamese private enterprisesneglect improvements to strategic planning, management skills, and promotingthe application of science and technology in production and business as well asincreasing capital efficiency.
“Inthe context that Vietnam has become a low middle-income country, while thetraditional competitive advantages are gradually disappearing, the low labourproductivity will be a major cause hampering the country’s investmentattraction and international integration,” Loc said.
ProfessorKenichi Ohno from the Japan Policy Research Institute said that Vietnam needsto build an overall strategy to increase labour productivity, movingsustainable labour productivity growth of 7-8 percent.
Hesaid it should focus on boosting labour productivity in industry first, then onother sectors such as agriculture and services. For countries that receive alarge amount of foreign direct investment like Vietnam, the strategy can targethigh-quality FDI projects and enhance the competitiveness of domesticmanufacturing industries, setting up close links between these two areas.
Ohonosaid that despite many years of close economic co-operation, Vietnam has notyet applied any Japanese productivity tools. Some productivity measures such as5S (sort, set, shine, standardise and sustain) and Kaizen (changing for thebetter) have been tested at the enterprise level with the support of JapanInternational Cooperation Agency (JICA), but the scale is too small and onlylasts a short time.
GeneralDirector of Duc Giang Chemical Joint Stock Company Dao Huu Huyen said the Stateneeds to have suitable policies, creating conditions for a number of"leading" enterprises to make breakthroughs and promoting small- and medium-sizedenterprises for development.
“Thiswill be an effective and practical way to promote labour productivity inenterprises,” Huyen said.
According to Chairman of Thien Phu EnergyInvestment Joint Stock Company Tran Anh Dung, to increase labour productivitywhen Vietnam and many countries in the region and around the world are catchingup with Industry 4.0, businesses need to make efforts to raise their level,actively applying technology in production and business and encouragingcreative ideas in every activity.
“In the Vietnamesebusiness community, young businesses and start-ups need to raise awarenessabout technology and labour discipline, which is the most effective andpractical solution to boost labour productivity,” Dung said.-VNS/VNA
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