Vietnam faces two-pronged challenge to human capital development: WB

Vietnam has delivered a strong performance on the human capital index but is facing challenges in ensuring high-quality human resources, said a World Bank official at the National Conference on Sustainable Development 2019.

vietnam faces two-pronged challenge to human capital development: wb hinh 0
Deputy Prime Minister Vu Duc Dam delivers his opening speech at the National Conference on Sustainable Development 2019 in Hanoi on September 12 – Photo: VGP

The conference took place in Hanoi on September 12, under the theme “For a decade of more sustainable development,” gathering more than 700 delegates from State agencies and private businesses.

Daniel Dulitzky, WB regional director for East Asia and Pacific Human Development, noted that the global lender had launched the Human Capital Index (HCI) a year ago. The index contains three subcomponents: percentage of children surviving to age 5; expected years of learning adjusted for quality of learning; and a measure of health, in this case combining stunting and adult survival. 

Vietnam’s overall HCI score is 0.67, which means that a child born in Vietnam today will be 67% as productive, upon growing up and starting work, as a child who enjoys a full education and perfect health.

Dulitzky highlighted human capital disparities among ethnic minorities, primarily because the gaps are so stark, with strong equity implications that will have to be addressed in the next decade.

At the same time, he noted that Vietnam needs to enhance both the quantity and quality of its skilled workforce graduating from universities and vocational education and training institutions for a smooth transition to a career.

“Our projections show that if Vietnam follows the current trend, the overall share of the labor force aged 15 and above with a tertiary education degree will only marginally increase by 2050,” he remarked.

The tertiary level gross enrolment rate is below 30%, public funding for higher education as a share of the gross domestic product is less than 0.5% and tuition fees as a share of the unit cost at public universities is more than 50%. This places Vietnam among the countries with the lowest tertiary education enrollment, allocating the least amount of public funding while relying heavily on out-of-pocket contributions.

Dulitzky also cited the 2018 Global Competitiveness Index, indicating that Vietnam is ranked toward the bottom of the list of 140 countries based on industry-relevant skills among university graduates. This low-quality workforce is reflected in Vietnam’s performance, lagging behind other countries in the value added per employee.

To promote inclusive growth, Vietnam faces a two-pronged challenge in human capital development, according to the official.

The first is to close the gaps in human capital disparities for ethnic minorities, and the second challenge is to strengthen the overall development of the workforce and prepare Vietnam for a knowledge-based economy.

He suggested the Government reform the national targeted programs, which should focus on improving human capital outcomes for ethnic minorities, including nutrition, access to high-quality secondary and tertiary education and support for their transition to good jobs.

Supporting ethnic minorities’ transition away from farm work toward household enterprises and salaried employment is key to the country’s long-term prosperity. Access to tertiary education and training needs to be more equitable, including the use of means testing as a form of subsidy targeting, he remarked.

Addressing the opening ceremony, Deputy Prime Minister Vu Duc Dam stressed that Vietnam has spared no effort to fulfill its Millennium Development Goals and has earned many achievements.

Dam said the country is committed to fulfilling the 2030 Agenda for Sustainable Development.

The Government has already issued a national action plan on sustainable growth, with 115 criteria, and combined it with all guidelines, policies and action plans, according to the senior Cabinet leader.

He stressed that it is impossible to achieve sustainable growth targets without effective, strong action at all levels for all sectors, business communities and people, or without the cooperation of the international community.

He called for joint efforts to fulfill sustainable growth targets based on the United Nations’ 2030 Agenda for Sustainable Development.

Vu Tien Loc, president of the Vietnam Chamber of Industry and Trade, who also serves as chairman of the Vietnam Business Council for Sustainable Growth, delivered a report on improving the competitiveness of the private economy and strengthening public-private partnerships (PPP) for a more sustainable decade.

Loc noted that it is necessary to promote the expansion of the PPP to attract more resources from the private sector for socioeconomic development and to achieve the Sustainable Development Goals.

He stressed the need to issue a PPP investment law to reform the PPP model. State management agencies should change their management methods and enhance their capacity to create more favorable conditions for investment activities in the PPP format to attract new investors.

Saigon Times