Experts discuss current situation of informal economy

Hanoi (VNA) – Economists and managers gathered at a conference in Hanoi on December 13 to discuss the role and significance of the informal economy, thus seeking proper policies for the sector.

Prof. Dr. Nguyen Cong Nghiep said that although the informal economic sector exists in all economies, the sector’s operation is particularly strong in developing countries due to incomplete legal frameworks, as well as weak inspection, supervision and administrative systems.

Over 50 percent of the non-agricultural workforce in the majority of low- and middle-income economies work in the unofficial economic sector, he said, noting that the figure in Central Africa is over 80 percent.

The informal economic sector accounts for about 30 percent of GDP in Latin America, more than 50 percent in India, and over 60 percent in Sub-Saharan Africa.

According to the professor, in more developed economies, while it differs from nation to nation, generally speaking the sector is smaller in scale. In the US, the percentage is 5.4 percent of the GDP; in Sweden, 6 percent; Spain, 17.2 percent; and Italy, 19.8 percent.

Some experts estimated that the sector’s scale in Vietnam is about 20-30 percent of the GDP. The General Statistics Office (GSO), while yet to give an official figure, holds the view that the number is less than 30 percent of the GDP.

Whatever the exact number is, it is obvious that such economic activities are complex, said Nghiep.

Economist Dang Le Doanh said that the fast development of technology and the dynamism of a strong, integrated economy may create spaces for a number of digital economic forms to rise as part of the informal sector. However, these forms may lead to greater social inequality and increase the gap between the rich and the poor, he said.

Doanh held that in order to develop the digital economy in a legal manner, the State should build a suitable legal environment for different types of economic forms.

GSO Deputy General Director Nguyen Thi Huong said that unobserved economic forms are mostly in the illegal, leftover activities of data-collection programmes.

She said that a project to build statistics on the informal economic sector is being built and will be submitted to the Prime Minister for approval in December 2018.

Asserting that this is a difficult job, Huong called for support and coordination from ministries, sectors, and localities, as well as economic experts and researchers.–VNA