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More efforts needed to improve labour productivity

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.
More efforts needed to improve labour productivity ảnh 1Illustrative photo (Photo: VNA)

Hanoi (VNA) – Vietnamcan escape the middle income trap to achieve rapid and sustainable growth onlyby improving its labour productivity, heard a policy dialogue on September 26in Hanoi.

The event was jointly held by theVietnam Institute for Economic and Policy Research (VEPR) and German think tankKonrad Adenauer Stiftung (KAS).

Peter Girke, KAS ChiefRepresentative in Vietnam, said that the Vietnamese economy has been developingcontinuously and gained notable achievements.

However, labour productivity has failedto 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 NguyenDuc Thanh, in 2017, Vietnam’s labour productivity was twice as high as that oflow income countries, equal to 50 percent of that of lower middle-income nationsand only 18.3 percent of that of upper middle-income states.

The country’s labour productivityrose from 38.64 million VND (1,650 USD) per labourer in 2006 to 60.73 millionVND (2,602 USD) per labourer last year, with an average yearly growth rate of5.3 percent during the 2012-2017 period.

In 2015, Vietnam recorded thehighest growth in terms of labour productivity, at 6.49 percent. However,compared with other countries in the region, labour productivity in almost allsectors was at the lowest levels.

Thanh said that labourproductivity in manufacturing and processing remains low, which has a knock-oneffect for the sustainable growth of the sector.

He stressed the need for moreadministrative and institutional reforms that can help raise labour productivityin order to achieve rapid and sustainable economic growth.

The director proposed that Vietnambuild a movement to increase labour productivity like those seen in Japan,Singapore, and the Republic of Korea.

Le Van Hung from the VietnamInstitute of Economics (VIE) said that the foreign direct investment (FDI) sectorholds an important role in raising labour productivity in the country.

To increase the sector’scontributions to labour productivity, it is necessary to pay attention to thequality of FDI capital instead of the quantity, and focus on developing the supportingindustry, Hung stressed.–VNA 
VNA
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