Question

Write a report on trade, employment and wages in Vietnam.

Not more than 3000 words

Answer 1

Economy of Vietnam:

Vietnam have a large economy.economy of Vietnam is a socialist-oriented market economy.majority of Vietnam's export revenues are generated by crude petroleum, garments, footwear, and seafood, and electronic products are of growing importance.which is the 36th-largest in the world as measured by(GDP) AND 23th-largest in the world as measured by(PPP).

The resistance-war economy had been developed since 1951, the Vietnam State Bank was set up and the Vietnamese bank note introduced from June 10th, 1951, making an important point in the distribution of goods, trade and commercial activities started to develop.

Trade report of Vietnam:

Vietnam's foreign trade has been growing fast since state controls were relaxed in the 1990s. The country imports machinery, refined petroleum, and steel; it exports crude oil, textiles and garments, and footwear.

When the 20-year Viet Nam War ended in 1975, Viet Nam’s economy was one of the poorest in the world, and growth under the government’s subsequent five-year central plans was anaemic. By the mid-1980s, per capita GDP was stuck between $200 and $300. But then something changed. In 1986, the government introduced “Đổi Mới”, a series of economic and political reforms, and steered the country to becoming a “socialist-oriented market economy.

Economic growth in the coming years will remains sluggish in developed markets. Especially the Eurozone will only experience limited growth as the region continues to struggle with the Eurocrisis. World output growth is strongly driven by emerging markets, in particular China and other developing Asian countries. Vietnamese growth is predicted to be slightly below the developing Asia average, with 6,0% in 2013 and in 2014.

In the coming years, exports (in current dollar terms) are expected to increase with 22.5% annually. The rank of the Vietnam in the list of largest exporters worldwide will increase to 27. Demand for foreign products (imports) is also expected to increase in the next five years, with 20% annually. The rank of the Vietnam in the list of largest importers worldwide will increase to 27. Worldwide, the top three export and import countries in 2017 will be China, United States and Germany. The countries that show the greatest increase in demand for imports of foreign products are Vietnam, Indonesia and Taiwan.

Vietnam’s trade surplus widened to USD 3.5 billion in September 2020 from USD 1.6 billion in the same month a year earlier, a preliminary estimate showed. Exports jumped 17.5 percent to USD 27.5 billion. Meanwhile, imports increased at a softer by 10.6 percent to USD 24 billion. Considering the firsst nine months of the year, the trade surplus was USD 16.99 billion, as exports were up 4.2 percent from a year earlier to USD 202.86 billion, while imports fell 0.8 percent to USD 185.87 billion.

Empolyment report of Vietnam:

Vietnam’s 50 million jobs are a cornerstone of its economic success. The transformation toward services and manufacturing, and impressive labor productivity and wage growth led to plunging poverty rates and globally enviable economic growth over the last decades. Employment rates are high and unemployment rates are low by global standards.

The statistic shows the distribution of employment in Vietnam by economic sector from 2009 to 2019. In 2019, 37.36 percent of the employees in Vietnam were active in the agricultural sector, 27.64 percent in industry and 35 percent in the service sector.

If Vietnam continues to focus its efforts on attracting foreign direct investment in lowskilled assembly jobs, its future jobs will look a lot like today’s jobs. If the current rate of transformation from family farms and enterprises to jobs that are covered by labor contracts continues for the next 20 years, contracted wage jobs would increase from 24 percent of jobs to 43 percent by 2040. These jobs would continue to be in low value-added activities, with related low per-unit profit and minimum wage-level jobs with limited opportunities for worker advancement. Family farming and household enterprise jobs would still account for more than half of all jobs in Vietnam in 2040.

Mega-trends could disrupt the future jobs picture

More jobs will be associated with local, regional, and global value chains.

Small- and medium-sized Vietnamese-owned firms will continue to create good jobs, though possibly less successfully than today.

Job quality in the modern sector will improve if Vietnam shifts toward higher value-added production activities.

The household enterprise sector will persist.

Automation will slowly begin to change the tasks in some jobs and (even more slowly) displace jobs.

The limited skill level of Vietnam’s workforce will hinder the emergence of good jobs.

Good wage in Vietnam:

Average Local Salary: The average monthly salary of a worker in Vietnam is about $148 per month; those in high paying jobs bring home around $500 per month.

Toward fair compensation in Vietnam: Insights on reaching living wage", 10 April 2019

An analysis by the Fair Labor Association... finds that factory workers in Vietnam work excessive overtime, beyond what is acceptable by international standards, to close the significant gap between what they earn and what they need to provide for themselves and their families... The report’s key findings:

• Workers who earn a salary on par with living wage estimates do so only through excessive hours and days of work without rest... It is common for workers in facilities with rest day violations to work more than 50 hours of overtime a month.
• Although the average worker in FLA-affiliated factories in Vietnam earns more than double the legal minimum wage, a worker would need a pay increase of almost 25 percent to reach the lowest consensus living wage estimate, as benchmarked by the Global Living Wage Coalition.
• Under Vietnam’s proposed 5.3 percent minimum wage increase for 2019, minimum wages would remain less than half (48.2 percent) of the Global Living Wage Coalition benchmark.

Our estimate of a living wage for rural Vietnam for March 2016 is VND 3,991,841 (USD 181) 3 per month, and therefore VND 153,532 (USD 7.0) per workday. The net living wage (take-home pay) after mandatory deductions is VND 3,572,698 (USD 162) 4 per month, and therefore VND 137,411 (USD 6.25) per workday. In order to estimate the living wage for the rural areas of Vietnam, we conducted research in rural areas of two provinces: Soc Trang, a province in the Mekong Delta southwest of Vietnam and Thai Binh, a province in the Red River Delta in the northeast of the country. Both provinces share some important commonalities: their populations mostly live in the rural areas and agriculture makes up more than half of the provincial GDP. However, both provinces have developed export-oriented manufacturing and food processing, industries which include shrimp-processing in Soc Trang and garments in Thai Binh. We averaged the local costs we found in these two areas to obtain our estimate of living costs and a living wage for rural Vietnam. These estimates should be seen as providing approximate estimates of living costs and a living wage for rural Vietnam. First, these two areas are small, and Vietnam is a large country and so they may not be fully representative of rural Vietnam in its entirety. Second, we found that food costs were significantly different in the two areas as they tended to be considerably lower in Soc Trang compared to Thai Binh, although we found that other costs were similar. This means it would be worthwhile to undertake additional future work on living costs and living wages in other rural areas of Vietnam to find out variability in costs of living across different rural areas of Vietnam.