|Improving productivity emerges as a huge challenge facing the Vietnamese economy to catch up with the levels seen across the region. (Illustrative image: internet)
The suggestion was made at a conference which aimed to find ways of improving the national labor productivity, hosted by the General Statistics Office of Vietnam (GSO) this week.
The average national labor productivity for the 2011-18 period rose by 4.8 per cent annually, higher than the growth pace seen among regional peers.
Despite this increase, the GSO noted that the country’s labor productivity, based on the 2011 purchasing power parity benchmark, now stands at US$11,142, a very low level compared to that of other regional countries.
This figure is equivalent to only 7.3 per cent of Singapore’s labor productivity, 19 per cent of Malaysia’s, and 37 per cent of Thailand’s.
Improving productivity emerges as a huge challenge facing the Vietnamese economy to catch up with the levels seen across the region.
Nguyen Bich Lam, head of the GSO, said that amid increasing international integration and fierce competition, the enhancement of the national labor productivity acts as a decisive factor to better competitiveness of domestic enterprises and the overall economy.
High labor productivity could facilitate swift and sustainable development and help the country overcome the middle-income trap as well as narrow the development gap between Vietnam and regional peers. Hence, Lam stressed the need to seek ways of improving labor productivity.
He underpinned his stance that local industrial production has been consistently regarded as a key contributor to the country’s economic growth, but its labor productivity has yet to bring into play the significant role.
In 2018, industrial labor productivity reached more than VND154 million (US$6.776) per employee, an annual rise of 4.5 per cent, while the average figure seen during the previous seven years edged up from 1.83 - 3.1 per cent.
The sector, without breakthroughs and drastic changes to be made, could fail to reach the target of increasing its labor productivity by 5.5 per cent during the 2016-20 period.
Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), urged the need for stronger institutional reform and comprehensive market development to boost the national labor productivity.
He also underlined the significance of further fostering economic restructuring and the contributions made by industrial production and services to the country’s economic growth.
Furthermore, household productivity should be improved as households nationwide make up for 30 per cent of GDP, the VCCI chairman noted.
Aside from macro-level measures to increase labor productivity, the establishment of a national productivity committee has been called for.
Indeed, Prime Minister Nguyen Xuan Phuc launched the national labor productivity movement right at the conference.
PM Phuc outlined a number of key tasks to be implemented in pursuit of higher labor productivity.
Focus must be placed on promoting institutional reforms and increasing the efficiency of the domestic labor market, both in terms of supply and demand.
He called for an open mechanism in the State apparatus that encourages competent workers get involved into the management work. Additionally, technology investments should be paralleled with those aimed to better the skills of laborers.
In a bid to handle the risk of lagging behind other regional economies and overcome the middle-income trap, more joint efforts must be raised by businesspeople, enterprises, and laborers to incline towards growth models based on productivity, quality, and efficiency.