Labour productivity enhancement – key to economic growth
Updated : Monday, April 16, 2018 10:59 AM (GMT+0700)

Vietnam’slabour productivity is very low compared with growth need, thus raisingproductivity is the key to economic growth, experts said at a conference onApril 13. 

 
An apparel factory of the Formostar Garment Vietnam Co., Ltd in Hai Duong province -
Photo: VNA

According to Ngo Van Tuan,deputy director of the Party Central Committee’s Economic Commission, thecountry’s productivity increased by an average 4.7 percent a year during2011-2017, while the GDP growth was about 6.21 percent and real wage rose by anaverage 12.59 percent. 

“This means production costsin Vietnam is becoming more expensive, which directly affects the country’scompetitiveness”, Tuan told the CEO forum 2018 held by the Vietnam Economic Times

The General StatisticsOffice (GSO) reported that local productivity has been increasing throughoutrecent year, but remains lower than regional levels. 

By purchasing power parityin 2012, Vietnam’s productivity in 2016 reached 9,894 USD in 2016, equal toonly 7 percent of Singapore’s, 17.6 percent of Malaysia’s and 36.5 percent ofThailand’s. 

The gap is still expanding,GSO Director General Nguyen Bich Lam said, attributing it to the slowrestructuring process of the economy, with the high proportion of the workforceworking in the agricultural sector where the labour productivity is low.

The prevalence of outdatedmachinery, equipment and technology in the economy is another cause, he said,noting that most domestic firms, particularly private ones, use technology thatare two or three generations backward compared to the world’s average. 

Furthermore, the capacity ofresource management and use is low, as is business administration capacity,according to Lam. 

He urged the Government andsectors to make raising labour productivity a leading task to improve thenational economy’s competitiveness and sustainable growth. 

The Government should set upa national labour productivity committee to coordinate efforts to enhanceproductivity, and develop a national strategy to help the country catch up withregional countries in terms of productivity.

Deputy director of the PartyCentral Committee’s Economic Commission Tran Van Tuan was of the opinion thatthe most effective solution to enhance productivity is to attract FDI intoindustrial production and services of higher value. 

He said the country needs anew strategy and new directions in attracting FDI, in order to allow the FDIsector to play a greater role in technology transfer.

A representative fromDeloitte Vietnam Ha Thu Thanh said as the human factor is the first to affectlabour productivity, the country needs a human-based approach to productivityenhancement.

Source:VNA

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