Swiss Federal Councillor Johann N. Schneider-Ammann, Head of the Federal Department of Economic Affairs, Education and Research

DONG NAI (ILO News) – Good working practices in enterprises that are based on dialogue and cooperation between workers and management go hand in hand with higher productivity and bigger profits, a senior Swiss Government official said during his visit to a wood manufacturing company in Dong Nai Province on 25 October.

As the Swiss Government’s support put a special focus on small and medium-sized enterprise (SME) development, Federal Councillor Johann N. Schneider-Ammann, Head of the Federal Department of Economic Affairs, Education and Research, was happy to witness the improvement in safety and dialogues at Phu Tai JSC as a result of the Swiss help.

Joining the project “Sustaining Competitive and Responsible Enterprises” run by the International Labour Organization (ILO) and the Vietnam Chamber of Commerce and Industry (VCCI), the company, which exports its products to Europe and North America markets, has been trained to boost productivity while bettering working conditions and making production processes cleaner.

The project, funded by the Swiss and Norwegian governments, has helped SMEs in the wood industry in HCM City and the neighbouring provinces of Dong Nai and Binh Duong.

Good working conditions and respect for worker’s rights will keep the SMEs more competitive."

Consumers’ awareness about the origin of their products has been on a rise over the last few years, especially after the Rana Plaza collapse tragedy in Bangladesh last April. Four out of every five Canadians, for instance, make an effort to ensure they know how and where things they purchase are made. But the issue of human dignity at workplaces goes further than that.

“Good working conditions and respect for worker’s rights will keep the SMEs more competitive,” the Swiss Federal Councillor – a former entrepreneur – said.

The Swiss support to address various challenges faced by SMEs coincides with One UN Plan and Viet Nam’s 2011-15 development plan for the groups that account for 97 per cent of all enterprises in the country.

“Despite being in its early period of development, SMEs in Viet Nam have experienced a strong growth and played an important role in the national economic development,” VCCI President Vu Tien Loc said. “As the country accelerates its regional and global integration, Vietnamese SMEs are having a lot of good opportunities but at the same time facing major challenges, especially the increasing competition.”

ILO Country Director Gyorgy Sziraczki called SMEs the “the major sources for job creation”, but expressed his worries that “they are lagging behind in productivity and working conditions, affecting the entire nation’s competiveness and market-access in the global market.”

ILO calculations showed that Viet Nam’s labour productivity in 2012 was among the lowest levels in the Asia Pacific, remaining one fifth of Malaysia’s or one-tenth of South Korea’s.

In this context, the SCORE project has offered training in workplace co-operation, quality management, productivity, occupational safety and health, using ILO practical tools and approaches suitable for Vietnamese SMEs.

“This project can set a model for a larger scale and hopefully will leave a sustainable impact in the development direction of all Vietnamese SMEs,” said the VCCI leader.

According to the national SMEs Development Plan, some 350,000 new SMEs are expected by 2015, creating 3.5-4 million jobs and making up 40 per cent of the country’s gross domestic products.