Any reform and integration must be beneficial to all

ILO Country Director Gyorgy Sziraczki shares his views on key labour and employment issues in Viet Nam in the past few years and looks ahead to the country’s near future.

Press release | 31 July 2015
What do you think have been the major achievements of Viet Nam in the area of labour and employment since 2012?

Viet Nam has made important achievements over the past few years.

First, the framework for labour market governance has been strengthened to help Viet Nam in the transition towards a market economy and as a new middle-income country. Important laws including the 2012 Labour Code, Employment Law, amended Social Insurance Law, Law on Technical Education and Vocational Training, and most recently Law on Occupational Safety and Health got the greenlight from the National Assembly.
Viet Nam has also ratified 3 international labour conventions since 2012, namely the Employment Policy Convention (Convention 122), Maritime Labour Convention (MLC 2006) and Promotional Framework for Occupational Safety and Health Convention (Convention 187). This shows a good sign of the country’s gradually aligning with international standards in the area of labour and employment.

Second, evidence-based and informed discussions have become more of a “habit” in Viet Nam. The Government has put more efforts on statistical work, for instance, the regular production of Labour Force Survey or the first-ever Child Labour Survey. These are critical in designing and monitoring policies.

The third major achievement has been experimental work and learning from pilot programmes on the ground. Better Work has been a good example in showcasing the improved compliance with labour laws while enhancing productivity and competitiveness in the apparel industry. Meanwhile, industrial relations pilot programmes have helped to strengthen the voice and representation of key players in the labour market and dialogues at some enterprises and local level on key issues such as working conditions and wages.

What are the most important factors that have contributed to those outcomes, without which they could not have been achieved?

On one hand, the political commitment from the Government has played a key role in bringing about changes. Without a strong leadership, Viet Nam could not have made progress in its labour market reform using evidence-based discussions and policy-making.

On the other hand, there has been a growing demand for more openness, stronger voice and increased participation in the issues of concern of businesses, workers, families and individuals. The gradually expanding middle class and workers in the formal sector have also been calling for changes towards a more competitive economy and a fairer society. In that context, it is the political response to the call that has lead to remarkable achievements of Viet Nam.

In addition, Viet Nam’s deepening integration into the world’s economy has also been a key factor in moving ahead with needed reforms.

Over the past three years, what have been the biggest challenges for the country to create decent work for all?

Despite remarkable achievements, some major challenges still remain.

The first one is the weak policy coherence. More and effective collaboration is needed across ministries to foster a conducive environment for the growth of businesses and the creation of more and better jobs. For example, the Ministry of Labour, Invalids and Social Affairs plays a key role in shaping labour market governance but macro-economic policies have a more decisive impact on labour demand. Inter-ministerial co-ordination is important to ensure that economic growth translate not only more but also better jobs, and it can also save costs for the Government.

The second challenge lies in the capacity of Government agencies for effectively implement labour laws and regulations. Laws are just a part of the story: implementation and compliance are the key.
Finally, most of the workers in Viet Nam are still in the informal sector, which often goes together with poor working conditions, inadequate pay and no protection. This will continue to be a major challenge for the country in the years to come. The small and medium-sized enterprises, which make up a big share of businesses in Viet Nam, will need a reboot to also be able to benefit from the national economic development and its integration into global markets.

As a labour economist, how would you see the emerging issues for Viet Nam’s labour market in the near future?

Viet Nam will undergo a major structural transformation as it keeps deepening its integration into the global economy.

In that context, first, the country will need to move forward to improve its labour laws and regulations and ratify key ILO conventions, including Convention on Freedom of Association and Protection of the Right to Organize (Convention 87) and Convention on the Right to Organize and Collective Bargaining (Convention 98).

Second, compliance will also need to be strengthened to make sure that laws and regulations will be implemented in practice.

Third, more investment in education and skills training for the young and dynamic labour force is another critical factor Viet Nam needs to improve to seize market opportunities and create quality jobs, leading to both business growth and higher living standards.

After all, the success of the integration and reform process much depends on whether it benefits everyone: businesses, workers and their families and the society as a whole.