Vietnam's labor productivity is only 11.2% of Singapore's, facing the middle-income trap

On the afternoon of October 20, Deputy Prime Minister Ho Duc Phoc presented to the National Assembly a report summarizing the Government's work for the 2021-2026 term.

Deputy Prime Minister Ho Duc Phoc - Photo: Quochoi.vn

Reporting on the assessment of the situation and results of 5 years of implementing Resolution 31 of the National Assembly on economic restructuring, Deputy Prime Minister Ho Duc Phoc said that the context of the situation has many rapid, complicated, and unpredictable changes, affecting economic growth.

Slow productivity growth, restructuring still faces many challenges

Therefore, out of 27 targets, only 10 were completed. Targets such as increasing labor productivity, the number of enterprises and agricultural cooperatives applying high technology, the rate of cooperatives linked with enterprises in the value chain or the proportion of spending on science and technology all faced many difficulties and challenges and required great efforts to achieve.

The Government has focused on completing the restructuring goals of public investment, the state budget, the credit system and public service units. At the same time, it has developed various types of markets and improved the efficiency of resource allocation and use.

Regarding business development, the Government promotes connectivity between economic sectors, urban economic development, strengthening regional linkages, between urban and rural areas and key economic zones.

However, Mr. Phoc admitted that the progress in building institutions and policies to support economic restructuring has not kept up with development requirements. The economic structure and growth model have made progress but have not yet created clear changes. The development of the business force still has many limitations.

Economic sectors have not yet seen a strong shift in productivity growth, especially in the industrial and service sectors. Restructuring of state-owned enterprises and public service units is still slow and has not met expectations; restructuring of some key sectors still faces many difficulties and challenges; and the operation of various markets has not yet been truly effective, ensuring conditions for sustainable development.

Chairman of the National Assembly's Economic and Financial Committee Phan Van Mai - Photo: GIA HAN

In the audit report, Chairman of the National Assembly's Economic and Financial Committee Phan Van Mai emphasized the need to clearly assess the impact of failing to meet targets in order to propose appropriate solutions.

He noted that the current growth model is transforming slowly, still mainly relying on capital and labor, while sustainable driving forces such as innovation, science and technology and knowledge-based economy have limited contributions, increasing the risk of falling into the middle-income trap.

Worryingly, labor productivity improved slowly, averaging only 5.24% over the period, much lower than the target of 6.5% and far behind other countries in the region.

In 2023, Vietnam's labor productivity by PPP (2021) will be only 11.2% of Singapore, 27% of South Korea, 28.6% of Japan, 36.2% of Malaysia, 64.6% of Thailand, 57.3% of China, 84.8% of Indonesia and only slightly higher than the Philippines at 104.9%.

The economic structure is shifting slowly, the added value is still low when the localization rate is only about 36.6%. The development of different types of markets is not synchronous, while the internal capacity of the private enterprise sector and the collective economy is still weak, small in scale and lacking in connection.

Therefore, the audit agency believes that it is necessary to comprehensively assess the economic restructuring process to develop focused and key solutions.

Permanent Deputy Prime Minister Nguyen Hoa Binh - Photo: GIA HAN

More than 400 business trips and changes in management

According to the summary report of the Government's 2021 - 2026 term presented by Permanent Deputy Prime Minister Nguyen Hoa Binh, throughout the term, the Government and the Prime Minister regularly monitored, inspected and urged the implementation of tasks in all fields.

The Prime Minister and Deputy Prime Ministers have made more than 400 working trips with localities to grasp practical situations, guide law enforcement, and promptly remove difficulties and obstacles.

The thinking in policy and law making has been innovated, shifting from "management" to "development creation", from "pre-inspection" to "post-inspection", focusing on handling "bottlenecks" and "knots" in mechanisms.

The Government held 45 thematic meetings on law-making; submitted to the National Assembly for approval 180 laws, ordinances and resolutions - the highest number ever; and issued 1,400 resolutions and 820 decrees.

The Permanent Deputy Prime Minister said that to realize the two strategic goals, the Government will continue to perfect the organizational apparatus and streamline the two-level local government.

The Government also focuses on perfecting institutions, mobilizing all resources, creating new momentum for development; promoting administrative reform, controlling and simplifying procedures.

Along with that is promoting economic growth associated with macroeconomic stability, controlling inflation and ensuring major balances.

The Government will promote industrialization, modernization, economic restructuring, science and technology development, innovation and digital transformation.

At the same time, invest in synchronous infrastructure, build a modern education system on par with the region and the world, effectively use resources and protect the environment.

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Source: https://tuoitre.vn/nang-suat-lao-dong-viet-nam-chi-bang-11-2-singapore-doi-mat-bay-thu-nhap-trung-binh-20251020151606001.htm