Illustrative photo (Photo: VNA) Hanoi (VNA) – Vietnam can escape the middle income trap to achieve rapid and sustainable growth only by improving its labour productivity, heard a policy dialogue on September 26 in Hanoi.
The event was jointly held by the Vietnam Institute for Economic and Policy Research (VEPR) and German think tank Konrad Adenauer Stiftung (KAS).
Peter Girke, KAS Chief Representative in Vietnam, said that the Vietnamese economy has been developing continuously and gained notable achievements.
However, labour productivity has failed to achieve corresponding growth. Compared to many other nations in the region, Vietnam has a peculiar issue in terms of labour productivity, he added.
According to VEPR Director Nguyen Duc Thanh, in 2017, Vietnam’s labour productivity was twice as high as that of low income countries, equal to 50 percent of that of lower middle-income nations and only 18.3 percent of that of upper middle-income states.
The country’s labour productivity rose from 38.64 million VND (1,650 USD) per labourer in 2006 to 60.73 million VND (2,602 USD) per labourer last year, with an average yearly growth rate of 5.3 percent during the 2012-2017 period.
In 2015, Vietnam recorded the highest growth in terms of labour productivity, at 6.49 percent. However, compared with other countries in the region, labour productivity in almost all sectors was at the lowest levels.
Thanh said that labour productivity in manufacturing and processing remains low, which has a knock-on effect for the sustainable growth of the sector.
He stressed the need for more administrative and institutional reforms that can help raise labour productivity in order to achieve rapid and sustainable economic growth.
The director proposed that Vietnam build a movement to increase labour productivity like those seen in Japan, Singapore, and the Republic of Korea.
Le Van Hung from the Vietnam Institute of Economics (VIE) said that the foreign direct investment (FDI) sector holds an important role in raising labour productivity in the country.
To increase the sector’s contributions to labour productivity, it is necessary to pay attention to the quality of FDI capital instead of the quantity, and focus on developing the supporting industry, Hung stressed.–VNA
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