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Vietnam Today

Labor productivity still down in region

Released at: 19:17, 05/01/2016

Labor productivity still down in region

Productivity gap remains despite increasing nearly 24% in last five years.

by Le Diem

Average productivity per worker in Vietnam has improved significantly since 2010, by 23.6 per cent, according to figures from the General Statistics Office (GSO), but the gap between productivity in Vietnam and elsewhere in the region remains.

Productivity increased 3.9 per cent each year from 2006 to 2015. The increase since 2010, though promising, still fell short of the target of 29-32 per cent. Average output per worker in 2015 reached VND79.3 million ($3,660), up 6.4 per cent compared with 2014.

Improvements, however, are disproportionate between sectors and the gap between Vietnam and ASEAN countries such as Singapore, Malaysia, Thailand, and Indonesia increased.

This was caused by a the slow transformation of the country's economic structure, a high rate of rural workers, and low productivity in agriculture. Machinery, equipment, and technological processes used in Vietnam are outdated, and the quality and structure of labor use does not meet requirements.

Improvements in labor productivity have been regularly discussed by authorities after a study by the International Labor Organization (ILO) showed that the productivity index in Vietnam in 2013 was among the lowest in Asia-Pacific.

Vietnam’s productivity was put at 15 times less than in Singapore, eleven times less than in Japan, and ten times less than in South Korea. The study also identified causes, which included low education standards, poor technology, and problems in economic restructuring.

According to the GSO, Vietnam’s working-age population (15 years and over) in early 2016 stands at 54.6 million, an increase of 185,000 people since early 2015. Unemployment in 2015 was 2.31 per cent higher than in 2014.

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