Vietnam's workers might be well-regarded in ASEAN but productivity is at a low level.
The productivity of Vietnamese workers stands at an average $3,515 a year, just one-eighteenth of their Singaporean counterparts, according to General Statistics Office (GSO).
Productivity in agriculture, agro-forestry and fishery is about $1,351, or just 38.9 per cent of the average, while workers in industry and construction produce about $5,302 and services about $5,003.
Vietnamese workplace productivity in 2014 has increased 4.3 per cent since 2010, with a 2.4 per cent gain in agriculture, agro-forestry and fishery, and 4.4 per cent in industry and construction.
Productivity rose 3.7 per cent annually on average from 2005 to 2014, but is just one-eighteenth of Singapore’s productivity, one-sixth of Malaysia’s, and one third of Thailand’s and China’s, according to the GSO.
Mr. Dang Quang Dieu, Director of the Policy and Law Department at the Vietnam General Confederation of Labor
“The capacity of Vietnamese workers would be as good as in other ASEAN countries if they worked under similar conditions. For example, in worker competitions among ASEAN countries in 2014 to honor the best in each area Vietnamese workers won 16 gold medals out of a total of 57.”
GSO also identified four reasons behind Vietnam’s low labor productivity. Firstly, there is much movement in economic structure and labor structure, but the proportion of workers in agriculture, agro-forestry and fishery is still high. Secondly, labor quality is not high due to inadequate training and outdated equipment and facilities. Thirdly, the proportion of industry enterprises remains small. And finally, management ability is not high and its use of resources is ineffective.
Total factor productivity (TFP) made up only 11.9 per cent of GDP in 2001 to 2005 period, -4.5 per cent in the 2006 to 2010 period and 23.6 per cent in the 2011 to 2013 period, GSO reported. The increase in labor productivity in manufacturing and services was quite slow compared with other nations in the region.
In research conducted by the International Labor Organization (ILO) in June, labor productivity in Vietnam stood at one-fifteenth of that in Singapore.
“I think comparisons between Vietnamese labor productivity and Singaporean labor productivity are unreasonable because of the differences in working and living conditions between the two countries, said Mr. Dang Quang Dieu, Director of the Policy and Law Department at the Vietnam General Confederation of Labor.
He pointed out four reasons for low productivity in Vietnam. “The most important reason is the lack of investment by enterprises and the state of their technology,” he said. Labor quality and working conditions were other factors, as were was low salaries, he said.
He stressed that salaries of Vietnamese workers was about one-twentieth of their Singaporean counterparts, which goes a long way to explaining why productivity is one-eighteenth of the rate in Singapore, he said.