14:08 | 07/01/2018 Economy- Society
(VEN) - “Increasing productivity - leverage for sustainable development” was the theme of the 2017 Vietnam Development Forum (VDF 2017) recently held in Hanoi. Most forum participants agreed that increasing productivity plays a particularly important role in Vietnam’s economic growth and ability to attract investment.
Low productivity growth
Dr. Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM), said Vietnam reached an annual labor productivity growth of 4.8 and 4.3 percent and a yearly economic growth of 7.3 and 6.7 percent in 1990-2000 and 2000-2012, respectively. The country’s labor productivity was unstable in recent years, falling to its lowest level - 3.8 percent - in 2013 and rising to 6.5 percent in 2015, leading to an annual economic growth of only 5.96 percent in the 2011-2016 period.
According to Minister of Planning and Investment, Nguyen Chi Dung, 2017 was a successful year of Vietnam, which fulfilled or exceeded all of the 13 socioeconomic development targets set by the National Assembly, including gross domestic product (GDP) growth of 6.7 percent. However, Vietnam’s growth quality remains modest, which is mainly attributed to modest labor productivity.
Ousmane Dione, Country Director of the World Bank in Vietnam, said Vietnam’s average labor productivity growth is about four percent, much lower than the seven and five percent that China and the Republic of Korea (RoK) reached when they were at the same level of development as Vietnam. If Vietnam continues with its current rate of productivity growth, it won’t be able to keep pace with such countries the RoK and Singapore, he warned.
Economists say that if Vietnam doesn’t improve its labor productivity, it won’t be able to lure large, quality investment projects.
Education is key
Forum participants said Vietnam needs a skilled workforce, noting that currently, only 20-30 percent of the demand for average-level workers is met. Domestic enterprises are mainly small to medium in size and haven’t been interested in vocational training, while state investment in education remains scattered and ineffective for labor supply-demand connection. Vietnam needs to pay special heed to education or development of high quality human resources that meet the economy’s actual development needs.
Prime Minister Nguyen Xuan Phuc said at VDF 2017 that the Vietnamese government is interested in increasing labor productivity. Reporting to the National Assembly in October, the government frankly pointed out that the growth quality was lagging. The prime minister added that the government will set aside capital and encourage businesses to boost investment in education and training.
Dr. Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM), says increasing labor productivity has become an indispensable trend and is integral to improve the growth quality.