VIETNAM’S FUTURE JOBS LEVERAGING MEGA-TRENDS FOR GREATER PROSPERITY OVERVIEW Wendy Cunningham Obert Pimhidzai VIETNAM’S FUTURE JOBS LEVERAGING MEGA-TRENDS FOR GREATER PROSPERITY OVERVIEW Wendy Cunningham, Obert Pimhidzai with Claire Hollweg, Gabriel Demombynes, Mary Hallward-Driemeier, Mauro Testaverde, Michael Crawford, Elizaveta Perova, Nga Thi Nguyen, Obert Pimhidzai, Reyes Aterido, Sergiy Zorya, Steven Jaffee Vietnam’s Future Jobs: Leveraging Mega-trends for Greater Prosperity Overview summarizes an extensive analytical exercise that is detailed in the report Vietnam’s Future Jobs: Leveraging Mega-trends for Greater Prosperity. All the material in this Overview document, unless otherwise cited, is presented in detail in the full report, including data sources, full citations, and complete analysis and interpretation. The full report includes the following chapters: • Chapter 1: Vietnam’s Labor Market Now and in the Future (Obert Pimhidzai) • Chapter 2: Shaping Vietnam’s Agriculture and Food System to Deliver Jobs (Sergiy Zorya, Steven Jaffee, Nguyen Do Anh Tuan, Truong Thi Thu Trang, Nguyen Le Hoa, and Nguyen Thi Thuy) • Chapter 3: Enterprise Dynamics and Job Flows (Mary Hallward-Driemeier and Reyes Aterido) • Chapter 4: Workers and Jobs – Current Trends and Emerging Opportunities (Wendy Cunningham) • Chapter 5: The Pathway to Future Jobs (Wendy Cunningham) Several background papers were also prepared to inform the report. They are cited in the chapters where their results are presented. II TABLE OF CONTENTS PrefaceV AcknowledgementsVII Executive Summary IX Introduction1 A Quick Look Backward 3 Brief Sketch of Today’s Jobs 5 Mega-trends and their Effects on Vietnam’s Jobs 8 Rise of the Asian – and Vietnamese – Consumer Class 8 Shifting Trade Patterns and New Trade Partnerships 9 Rise of the Knowledge Economy 10 Automation and Digitization in the Workplace 11 Shifting Demographics and the Increasing Dependency Ratio 12 A Roadmap for Future Jobs: Moving Beyond the Status Quo 15 Reform Area I: Creating More Job Openings in “Good Jobs” in the Modern Sector16 1. Lower the Barriers to Growth of Domestic Small and Medium Enterprises  16 2. Encouraging Enterprises to Move into Knowledge-Intensive Segments of Regional and Global Value Chains 20 3. Facilitating the Development of the Agro-food System 21 Reform Area II: Enhancing the Quality of Existing Jobs in Traditional Sectors24 4. Encouraging the Agricultural Sector to Diversify into High-Value Crops  24 5. Facilitating Business Links Between Household Enterprises and SMEs 25 Reform Area III: Connecting Qualified Workers to the Right Jobs 26 6. Building Worker Skills for Today’s and Tomorrow’s Jobs through Radical Reforms to the Education and Training Systems 27 7. Generating and Providing the Information Needed to Place the Right Workers into the Right Jobs 29 8. Providing Auxiliary Services to Facilitate Labor Force Participation and Labor Mobility 30 Conclusions and Institutional Factors for Developing a Deliberate Jobs Strategy 32 III V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W LIST OF FIGURES FIGURE 1: A picture of jobs in Vietnam in 2015 2 FIGURE 2: Hourly wage by gender and ethnicity 6 FIGURE 3: Primary source of per capita income, by ethnicity of household head  7 FIGURE 4: Share of developing Asia households in each consumption category, 2002-2030  8 FIGURE 5: Direct, indirect and total jobs content of exports, 1989-2012  9 FIGURE 6: Schematic value chain, by value added for each stage of the production process  11 FIGURE 7: Annual share of the population by age, 1950-2050  13 FIGURE 8: Policy for better and more inclusive jobs  16 FIGURE 9: Distribution of jobs across firm size and ownership type, %  17 FIGURE 10: Job creation and destruction, by firm ownership, size and age  17 FIGURE 11: Productivity and the trade-off (covariance) between productivity and jobs  18 FIGURE 12: Income sources of rural households, 2004, 2010, 2014  21 FIGURE 13: Progression and distribution of jobs in a food system as countries develop  22 FIGURE 14: Investment attractiveness and job creation capacity of different segments of the food system  23 FIGURE 15: Source of products purchased by and destination of sales by unregistered household enterprises, as % of total value 26 FIGURE 16: Share of employers identifying each skill as important for their workplace  27 FIGURE 17: Job search methodologies, by age  29 LIST OF TABLES TABLE 1: Top occupations in vietnam, 2014  5 TABLE 2: Comparison of annual and per-hour-work adjusted labor productivity, 2014  24 LIST OF BOXES BOX 1: Who are non-farm household enterprises in Vietnam?  5 BOX 2: Rise of the sewbots? Maybe not for a while…  12 BOX 3: Climate change and jobs  13 BOX 4: Properly measuring agricultural productivity  24 IV PREFACE Jobs have been a fundamental part of Vietnam’s rapid transformation to a modern, globally integrated, middle-income country. Doi Moi – the economic reform program that was launched in 1986 - not only changed Vietnam’s economic structure, but it also had deep implications for jobs, and these jobs were themselves a key input to the economic reform process. In 1986, most workers were engaged in agricultural production, with a small share laboring in state-owned enterprises. Today, less than half of jobs are in agriculture and a heterogeneous private-sector driven jobs sector has grown up. Job quality has not evolved as quickly, with the majority of jobs still being low productivity, low-paid, and lacking social benefits or worker protection. The world is on the cusp of new opportunities that could further shift Vietnam’s jobs picture. The rise of the Asian consumer class especially in China, a shift toward knowledge economies, new trade partners and patterns, automation in the workplace, and aging all threaten Vietnam’s current jobs structure. They also offer opportunities. At the invitation of the Government of Vietnam, the World Bank produced the report “Vietnam’s Future Jobs: Leveraging Mega-trends for Greater Prosperity” to explore the new challenges and opportunities facing Vietnam and to share policy reforms that could be a catalyst for more – and better – jobs. This work is aligned with the World Bank Group’s FY18-22 Country Partnership Framework, which emphasizes inclusive growth and investment in people and knowledge and highlights the importance of jobs for continued economic growth and poverty reduction. The report “Vietnam’s Future Jobs: Leveraging Mega-trends for Greater Prosperity” builds on “Vietnam 2035: Toward Prosperity, Creativity, Equity, and Democracy” a publication developed as a partnership between the Government of Vietnam and the World Bank Group, which lays out a long-term vision for Vietnam’s growth and development. “Vietnam 2035: Toward Prosperity, Creativity, Equity, and Democracy”, together with a series of studies that the World Bank has prepared covering topics of agricultural and rural development, private sector development, and skills development, present pieces of the jobs story. This study is the first that pulls together the viewpoints of specialists in poverty, macroeconomics, trade, private sector development, gender, education, and labor—thereby painting a unified and comprehensive jobs picture. The report identifies three reform areas that will be particularly important to capture the jobs-related opportunities offered by a changing economic and social context. First, create more jobs in specific segments of the modern sector, namely via Vietnam’s small and medium enterprises, agro-industry, and value chains. Second, enhance the quality of jobs in the traditional sectors. Family farming and household enterprises will be a part of the jobs landscape for many decades and much can be done to increase the quality of these jobs. Third, connect qualified workers to the right jobs. This will require overhauling the education and training sectors to meet the 21st century, as well as a range of other support for workers to shift jobs and skills as economic and social context change ever more rapidly. V V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W We hope that “Vietnam’s Future Jobs: Leveraging Mega-trends for Greater Prosperity” serves to inspire and connect policymakers, the private sector, and development partners to pursue the multi-faceted jobs challenge in the context of a changing world towards further prosperity and equity for Vietnam. Ousmane Dione World Bank Country Director for Vietnam VI ACKNOWLEDGEMENTS The Overview and Main Report were written by a World Bank team led by Dr. Wendy Cunningham. The team included Claire Hollweg, Gabriel Demombynes, Mary Hallward-Driemeier, Mauro Testaverde, Michael Crawford, Elizaveta Perova, Nga Thi Nguyen, Obert Pimhidzai, Reyes Aterido, Sergiy Zorya, and Steven Jaffee. Additional background papers were prepared by Bilal Kahn, Van Nguyen, Viet Nguyen, Dino Merotto, Stacey Frederick, as well as Nguyen Do Anh Tuan, Truong Thi Thu Trang, Nguyen Le Hoa, and Nguyen Thi Thuy from Vietnam’s Institute for Policy and Strategy for Agriculture and Rural Development (IPSARD). Excellent administrative support was provided by Nga Thi Phuong Bui, Van Cam Nguyen, and Corinne Bernaldez and research assistance by Roxana Marinelli, Linh Hoang Vu and Anita Nyajur. Dr. Gary Fields provided constant critical review and guidance to the team throughout the process. The book was prepared under the guidance of Victoria Kwakwa, Vice President for East Asia and Pacific; Ousmane Dione, Country Director for Vietnam; and Jehan Arulpragasm and Philip O’Keefe, social protection Sector Managers at the World Bank. The preparation benefitted from detailed peer review guidance provided by Christian Bodewig, Luc Christiaensen, Daria Taglioni, Brian Mtonya, Yoonyoung Cho, and Jennifer Keller as well as Achim Fock, Cia Sjetnan, Sebastian Eckhardt, Michel Welmond, Keiko Inoue, Nga Nguyet Nguyen, Dung Viet Do, Dung Thi Tuyet, Mai Thi Hong Bo, Ngan Hong Nguyen, Vuong Hai Hoan and many colleagues at the World Bank who provided insights, suggestions, and improvements to the report process and the final document. The team wishes to thank the participants in numerous consultation meetings with the Ministries of Labor, Invalids, and Social Affairs; Agriculture and Rural Development; Industry and Trade; Planning and Investment; and Education and Training as well as the Vietnam Chamber of Commerce, and international development partners. The team is deeply grateful to Dr. Nguyen Thang and team at the Centre for Analysis and Forecasting (CAF) at the Vietnam Academy of Social Sciences for their constant guidance and support throughout the process, and to the participants of the technical sessions that CAF hosted to debate specific topics of the report. Dr. Dang Kim Son’s detailed insights were particularly valuable. The team also benefitted from the discussions, comments, and ideas shared by Vietnamese youth, jobseekers, and Facebook users who participated in our live chats and discussion boards. VII ABBREVIATIONS AND ACRONYMS ASEAN Association of Southeast Asian Nations BPO Business process outsourcing CPTPP Comprehensive and Progressive Agreement for Tran-Pacific Partnership ESC Employment Service Center FDI Foreign direct investment GDP Gross Domestic Product GSO Government Statistics Office GVCs Global value chains HACCP Hazard Analysis and Critical Control Points IPSARD Institute of Policy and Strategy for Agriculture and Rural Development IT Information Technology LFS Labor Force Survey LMIS Labor Market Information System LTC Long Term Care M&E Monitoring and Evaluation MNCs Multi-national corporations MOET Ministry of Education and Training MOLISA Ministry of Labor, Invalids, and Social Affairs OECD Organisation for Economic Cooperation and Development PISA Programme for International Student Assessment PPP Public Private Partnership R&D Research and Development SMEs Small and medium enterprises SOEs State-owned enterprises STEP Skills Toward Employability and Productivity survey VARHS Vietnam Agriculture and Rural Household Survey VET Vocational Education and Training VHLSS Vietnam Household Living Standards Survey VND Vietnamese dong VNSCO Vietnam Standard Classification of Occupations WTO World Trade Organization CURRENCY EQUIVALENTS (Exchange Rate Effective January 25, 2018) Currency Unit = Vietnam Dong (VND) US$ 1 = VND 22,710.75581 VIII EXECUTIVE SUMMARY Vietnam’s 50 million jobs are a cornerstone of The policy challenge is to capture the mega- its economic success. The transformation toward trends so that Vietnam’s jobs of the future are services and manufacturing, and impressive labor higher value-added, more productive, better productivity and wage growth led to plunging paid and provide better opportunities to poverty rates and globally enviable economic workers. As history shows us, economic growth is growth over the last decades. Employment rates not enough to transform the jobs picture. Instead, are high and unemployment rates are low by a proactive set of policies is needed. This report global standards. identifies a narrow set of reforms areas for firms, farms, and workers that should be the focus of The jobs challenge is to create more high policy to improve job quality in Vietnam. It is not quality and inclusive jobs. Shiny foreign intended to be prescriptive, but instead to narrow factories paying above the minimum wage down a complex challenge into a few actionable and offering social benefits typify, at best, priority areas. only 2.1 million jobs. And registered domestic firms provide no more than 6 million jobs. What Will Vietnam’s Future Jobs Meanwhile, 38 million Vietnamese jobs are Look Like? in family farming, household enterprises, If Vietnam continues to focus its efforts on or uncontracted labor. These traditional jobs attracting foreign direct investment in low- tend to be characterized by low productivity, skilled assembly jobs, its future jobs will look low profits, meager earnings, and few worker a lot like today’s jobs. If the current rate of protections. While they have been a path out transformation from family farms and enterprises of poverty, they will not provide the means to to jobs that are covered by labor contracts reach the middle-class status that Vietnam’s continues for the next 20 years, contracted wage citizens aspire to. Ethnic minorities, women, and jobs would increase from 24 percent of jobs to 43 unskilled workers cluster in these jobs. percent by 2040. These jobs would continue to be in low value-added activities, with related low Transformational mega-trends may either create per-unit profit and minimum wage-level jobs with better job opportunities or threaten the quality limited opportunities for worker advancement. of Vietnam’s jobs. Shifting trade and consumption Family farming and household enterprise jobs patterns will affect what Vietnam can export and would still account for more than half of all jobs in in which value chains it can, or cannot, continue Vietnam in 2040. to be engaged. The rise of the global knowledge economy may provide new high-value jobs but will Mega-trends could disrupt the future jobs require a different skill set and export model than picture, improving job quality in some sectors Vietnam currently uses. An aging population will while expanding poor quality jobs in others. Or, demand care services from a shrinking working current constraints may limit Vietnam’s ability to age population. Automation will replace jobs if capitalize on these new opportunities. Specifically: workers are not equipped to use technology to their benefit. Together, these factors portend a More jobs will be associated with local, regional, tilt toward higher quality jobs, but only if firms, and global value chains because of the growing farms, and workers are prepared to take on these consumer class both in Vietnam and the region, new opportunities. IX V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W increasing urbanization, the emergence of agricultural product exports to higher value regional value chains, and Vietnam’s reputation regional markets. as a solid link in global value chains. This may come about because current jobs become linked The household enterprise sector will persist. to value chains (for example, family farms selling With urbanization, helped by the relaxation of to retailers) or through the creation of new jobs restrictions on internal migration (ho khau) in response to new markets. The low skill-level and increasing demand for services by urban of the workforce and the emergence of regional consumers, the household enterprise sector is competitors may hinder Vietnam’s movement into likely to grow. Jobs quality will likely remain more lucrative value chains or higher value jobs low quality if household enterprises continue to within value chains. operate at the margins of the formal economy. Small- and medium-sized Vietnamese-owned Automation will slowly begin to change the tasks firms will continue to create good jobs, though in some jobs and (even more slowly) displace possibly less successfully than today. Even though jobs. At first, technology will free up labor, many of today’s economic policies favor foreign allowing low-skilled workers to produce higher- investors and state-owned enterprises (SOEs), value products. As educated new labor force small- and medium-sized domestically owned entrants continue to raise the skill levels of the firms were the largest source of new contracted workforce, disruptions will be delayed. However, wage jobs in the past decade, expanding by in the longer term, as labor costs increase while the more than 5 percent. If foreign firms continue to cost of technology decreases, machines will start operate in enclaves with little connection to the to replacing humans, thus reducing the number of broader economy, and as Vietnam moves into available jobs. more sophisticated segments of value chains, job creation by domestic firms could be further The limited skill level of Vietnam’s workforce constrained. will hinder the emergence of good jobs. Today’s young people have a strong foundational set of Job quality in the modern sector will improve skills, but the workforce as a whole has low levels if Vietnam shifts toward higher value-added of education and severe skill gaps. The growth of production activities. Contracted wage jobs knowledge-intensive exports, the service industry, are more productive and pay better than and automation will be hindered by a labor force traditional, uncontracted jobs. However most that lacks a range of sophisticated skills and the of Vietnam’s modern jobs are in low value- means to upgrade their skills over their lifetimes. added manufacturing. The global shift toward knowledge-intensive production processes and Job search will need to be done more often. complex value chains, can be an opportunity to The expansion of modern firms will provide create high quality, modern jobs in Vietnam. job opportunities that are less dependent on personal connections. Job turnover will become Rural jobs will continue to become more diverse, more frequent as a result of both the structural with the development of rural manufacturing and transformation of the economy and fluctuations in services. Already, 4 of every 5 rural household firm size. This increase in turnover will be offset derives at least some of their income from off-farm by technology-enhanced job search. But more activities. Increasing mechanization will reduce marginal populations will be left behind. the agricultural workforce who will take up off- farm jobs. This transformation could lead to better Future jobs will be more inclusive for some, but jobs if driven by the development of food chains more of a challenge for others. to serve increasingly affluent urban Vietnamese Young people are already benefitting from consumers and the continued expansion of the onset of these mega-trends. Although X EXECUTIVE SUMMARY youth have higher unemployment rates than Reform Area 1: Creating More Good Jobs the national average, working youth tend in the Modern Sector to be in better jobs than older workers; the Jobs-friendly segments of the modern sector can share of youth working in wage jobs in the be a significant source of new good jobs. The private domestic and foreign sectors is higher best jobs, defined by higher labor productivity than their share of the working population. and wages and social benefits, are largely in the However, a substantial number of less skilled modern sector. They are also inclusive of women youth employed in low-quality wage jobs is and youth. These are the fastest growing jobs in likely to persist. Vietnam today and, if Vietnam prepares for the opportunities brought through the mega-trends, Women may benefit from the expansion of they have potential to grow, in quantity and export-oriented jobs and the emergence of a quality, even more. Thus, the policy challenge is care economy to provide services to an aging to foster the creation and growth of enterprises population. On the other hand, the aging of that are conducive to job creation, create high the population may impose time demands on value jobs, and position Vietnam for even more as women that push them into worse jobs or out the mega-trends are realized. Three policy areas of the labor market entirely. are proposed: (i) lower the barriers to growth of domestic Aging workers who did not benefit from the small and medium enterprises. good education system that Vietnam has today (ii) encourage enterprises to move into are likely to struggle as jobs become more knowledge-intensive segments of regional skills-biased. and global value chains. (iii) facilitate the development of Vietnam’s agro- Ethnic minorities may not be able to take food system. advantage of the emerging new jobs because of their location in remote communities and the Reform Area 2: Enhancing the Quality limited existence of service and manufacturing of Jobs in the Traditional Sectors jobs in their home villages. Jobs in family farming (and related primary production) and household enterprises can be How to Make Future Jobs Better and improved by integrating them into the broader More Inclusive? economy. These jobs will be a significant part of Vietnam can make its future jobs better and the economy for many years so they cannot be more inclusive if firms, farms, and workers ignored. They are overwhelmingly the source of seize opportunities and find ways to minimize employment for ethnic minorities, older workers, downside risk of these future trends. This would and the less educated, thereby being intricately entail complementing efforts to attract higher linked to poverty reduction. Two policy areas value-added foreign direct investment with new are proposed: efforts to foster an innovative, dynamic domestic (i) Encourage the agricultural sector to diversify firm sector; incorporate largely excluded economic into high value-added crops and local value sectors and people into the economy; and generate chains. a lean and smart labor force to create and work (ii) Facilitate business links between household in higher value-added jobs. Eight policy focus enterprises and SMEs. areas and multiple policy directions that define the “how to”, underlie these reform areas. While the Reform Area 3: Connecting Qualified policies may look familiar, they have been selected Workers to the Right Jobs out of a long list of sectoral policies; these eight Workers need different skills and a range of other focus areas offer the best chance for better and supports to effectively engage in today’s jobs and more inclusive jobs. to be ready for the demands of tomorrow’s jobs. XI V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W While Vietnam’s youth are globally recognized This report argues that greater gains are possible for secondary school test scores that rival those through a deliberate jobs strategy that focuses on of European students, most of Vietnam’s labor our eight policy reform areas. This will require force has, at best, incomplete secondary school defining targets for future jobs and monitoring and limited skills. The skills shortages observed progress toward them; engaging, and holding today will be exacerbated as mega-trends begin accountable, a range of government and private to affect the jobs pictures. Even workers with the sector actors; and leadership by a coordinating right skills do not have sufficient information body to champion the jobs issue and guide the about job openings, employers do not have good many actors toward a shared future jobs vision. information about worker quality, social norms limit job options, and income constraints prevent The future for Vietnam’s jobs is bright if Vietnam skill upgrading or moving to more appropriate begins to prepare today for this future. The jobs. Three policy areas are proposed: country can continue on its current path, which (i) build skills for XXIst century jobs through will yield job increases, but these will diminish as radical reforms to the education and training global trends erode some of Vietnam’s comparative system, advantage as certain groups are left further behind. (ii) generate and provide information to fit the The government could reform on the margin in an right workers into the right jobs, effort to keep up with changing global trends, but (iii) provide auxiliary services to facilitate labor this will become difficult as the global economy participation and labor mobility. becomes increasingly crowded by new entrants. Or Vietnam could make some big investments now A Coordinated Strategy for Better Jobs – in its domestic firms and farms, its labor force, A jobs strategy would visualize jobs goals regional and global trade networks, and even in and coordinate multi-sectoral action to reach integrating its own economy. These investments those job goals. The current jobs strategy - that would enable Vietnam to leap forward to higher better jobs will emerge from solid economic and economic status and would yield better and more sectoral development strategies – has had success. inclusive jobs for all its citizens. XII INTRODUCTION Vietnam’s market-based economy with a socialist enterprises (SOEs), by 2016, only a small share orientation has served it well over the past three consisted of full-time agricultural. decades. 1 Its rapid embrace of markets and integration into the global economy resulted in In spite of these transformations, most jobs annual per capita GDP growth rates of 5.5 percent in Vietnam are still in small-scale modes of between 1990 and 2016, higher than any country production, are of low quality, and are not in the world except China during that period.2 On fully inclusive. The celebrated FDI sector is the social side, extreme poverty has nearly been directly responsible for 2.1 million of Vietnam’s eliminated with poverty rates having plunged from 50 million jobs, which are defined in this report 60 percent to 10 percent over a single generation, as income (or in-kind) earning activities that are while a middle class has begun to emerge.3 By not prohibited by law. Registered domestic private 2015, Vietnam had converted itself from one of enterprises and SOEs employ another 6 million the poorest countries in the world into a lower workers, while 3.8 million are in public sector middle-income, modernizing, globally integrated (non-SOE) employment. However, three out of paradigm of economic development. four jobs in Vietnam are either in family farming (39 percent), household enterprises (20 percent), These successes were driven by several factors or employment without a contract (17 percent) that rapidly changed the jobs picture. Exports (Figure 1). By the very nature of these jobs, many grew rapidly, driven by foreign direct investment are low-productivity6 and low-paid, lack social (FDI) that was attracted by a stable government, benefits, and have little or no job security. Even competitive incentives for investing, an abundant many jobs in registered firms, which generally labor force adept at low-skilled assembly and provide job security and social benefits, are low manual work, and external factors such as value-added jobs with few chances for workers to well-developed regional production networks advance into better jobs. Some population groups and the China Plus One strategy employed such as women, ethnic minorities, and youth by multinational corporations (MNC). The face even greater challenges. The unpaid home manufacturing and services sectors increased care economy, which is dominated by women, their contribution to GDP, and some segments continues to be unaccounted for in labor statistics.7 of the agricultural sector boomed.4 The coverage and quality of education improved significantly Nevertheless, Vietnam is in a good position to during the period, and by 2012, Vietnamese high create more good and inclusive jobs by further school students had scores well above the OECD capitalizing on its current economic development average on the PISA (Programme for International model while embracing opportunities offered by Student Assessment) tests for math, reading, and emerging mega-trends in the global economy. science.5 These developments gave a big boost The current FDI-led model is still going strong, to productivity across the economy. Total factor attracting higher levels of foreign investment productivity growth – including labor productivity each year and enabling Vietnam to outpace its - was the main driver of Vietnam’s high economic regional competitors.8 The private domestic sector growth in the 1990s and early 2000s. While in 1986 has the potential to continue expanding and to jobs in Vietnam were characterized almost entirely move into higher value-added activities, while by family farming, collectives, and state-owned the small-scale economy can better integrate into 1 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W FIGURE 1: A picture of jobs in Vietnam in 2015 Domestic private sector (4.7m) 9.4% Non-farm household Wage without Family farming (19.5m) contract (8.4m) enterprise (10.3m) 39% 20% 17% Foreign Government private (3.8m) (2.1m) 7.6% 4.2% SOE (1.3m) 2.6% No employment contract Employment contract (76%) (24%) Source: Author’s calculations from the GSO’s 2015 Labor Force Survey (LFS) data. Notes: The size of each box is proportional to the share of the labor force working in each job type. The “wage” employees are divided into five sub- groups: wage jobs without a contract and four groups that work with a contract: government, SOE, domestic private, and foreign private. In this breakdown, wage workers working for family farms or non-farm household enterprises are classified under “wage worker.” Nearly all such workers have no contract. the economy at-large. Vietnam has an increasingly policy directions that are relevant for Vietnam’s educated labor force and is relaxing constraints to challenges.9 The report is not intended to be internal migration (ho khau). Several emerging prescriptive, but instead it frames the better jobs mega-trends in the global economy will affect issue and narrows down the reform priorities to a the composition of jobs: (i) a growing consumer core set of policy areas for deeper analysis, debate, class in Vietnam and East Asia; (ii) shifting trade and action by Vietnam’s policymakers. While the patterns; (iii) an aging population and a slowdown policies may look familiar, they have been selected in the growth of the workforce; (iv) the rise of out of a long list of policies; these offer the best the knowledge economy; and (v) increasing chance for better jobs. automation and digitalization of production processes and services. These trends could be a This Overview report focuses on reform threat to Vietnam’s future jobs or they could be the areas that emerged from the larger Vietnam’s key to creating better and more inclusive jobs if Future Jobs: Leveraging Megatrends for Greater policymakers take steps now to leverage them to Prosperity report. It starts with a brief review of the Vietnam’s advantage. evolution of jobs in Vietnam since 1986, followed by a quick description of today’s jobs in Vietnam. It The Vietnam Future Jobs report is designed to then moves into a more detailed discussion about identify a narrow set of reform areas that should the emerging global mega-trends and how they be the focus of policy to create more good jobs might benefit – or threaten – future jobs. It lays in Vietnam. It analyzes jobs from the perspective out eight policy areas to create better and more of the agricultural sector, the firm sector, and inclusive jobs in the current economy (short run) as workers; outlines mega-trends and how they well as some actions that, if taken now, will prepare may positively or negatively affect Vietnam’s Vietnam to capitalize on the future evolution of job future jobs; and draws from global experiences markets. It concludes with a summary of the main to identify a narrowly-defined set of priority messages and of the policy directions. 2 A QUICK LOOK BACKWARD Vietnam’s economic miracle is well documented. farms, and price controls were eliminated, In 1986, Vietnam was in the bottom decile globally exposing farms to markets and competition.15 A in terms of per capita GDP and had one of the series of land reforms also allowed households highest shares of employment in agriculture in to lease, exchange, and mortgage their land – the world. Yet by 2016, just 30 years later, Vietnam increasing the length of tenure of plots over had converted itself into a lower middle-income, time. This increased farm revenues16 and created modernizing, globally-integrated paradigm incentives for farmers to enhance productivity of economic development. This amazing and invest in their land, while also creating transformation was the result of the radical potential new revenue streams in rural zones. In reforms initiated in 1986 under the government’s the 1990s the government introduced a series of Doi Moi strategy10 of economic reforms aimed at trade liberalization measures, including in the creating a socialist market economy. agricultural sector, that generated new markets for Vietnam’s primary products and stimulated Doi Moi also radically shifted the structure of domestic production, especially rice. This resulted jobs in Vietnam. In 1986, Vietnamese jobs were in Vietnam changing from being a significant characterized almost entirely by family farming, importer of rice to being the world’s second collectives, and state-owned enterprises (SOEs). largest exporter by 1997. Not only did the quality After the introduction of Doi Moi and its associated of agricultural jobs improve because of higher reforms, employment in the agricultural sector earnings but it also made workers available to declined from 75 percent in 1986 to 46 percent of work in other sectors. jobs in 2016. This was accompanied by a rise in the share of jobs in manufacturing (from 15 to 21 Opening Vietnam’s economy to foreign investors percent) and in services (from 18 to 33 percent).11 resulted in an inflow of FDI and a movement Employment in state-owned enterprises declined of jobs into manufacturing (and services). In from 16 to 2.5 percent in the same period, although 1987, the government lifted restrictions on foreign this was offset by growth in government jobs. ownership (except in areas of national defense) Employment in private enterprises increased from and allowed 100 percent foreign-owned firms to zero to 13.7 percent of all jobs, while the share enter the market. Foreign multinationals were of jobs in household enterprises increased from even offered generous tax breaks and incentives 12 percent to 31 percent.12 Labor productivity to locate their operations in Vietnam, 17 and growth averaged 4.7 percent over the period, special economic zones were established across well above the global average (1.9 percent) and the country. This resulted in a boom in FDI and OECD average (1.3 percent).13 Before 2000, labor a spike in demand for workers in the private productivity growth was due to within-sector manufacturing sector.18 productivity enhancements, whereas between 2000 and 2013, workers moving between sectors Enhanced competition and a reduction were the key drivers.14 in government support for SOEs led to a consolidation of the SOE sector, opening market Reforms in the agricultural sector led to a space for the private sector to fill. Under Doi productivity boom and released rural labor. Moi, SOEs faced competition from an emerging In 1987 and 1988, private economic activity was private sector and received fewer subsidies and legalized, collectives were replaced with household support from the government. They were also 3 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W given more autonomy over their management likely to have improved job quality since registered and were allowed to pursue profits rather than firms have much higher compliance rates with output targets. The SOEs responded to these new labor law than unregistered enterprises.21 conditions by consolidating their activities, with some closing but most merging with associated Trade provided opportunities for both domestic layoffs.19 In urban areas, these job losses were offset and FDI firms. Vietnam moved from being a by the opportunities provided by the increase in minor player in terms of trade in 1986 to being foreign and private domestic firms, but in rural one of the most open countries to trade in the areas, this led to a net loss of manufacturing world by 2016. The US lifted its trade embargo jobs.20 Although the total share of jobs in public on Vietnam in 1994. In 1995 Vietnam joined or privately owned enterprises remained about ASEAN and its free trade area and began applying constant with the reallocation of workers, labor to join the World Trade Organization (WTO). productivity grew rapidly in this initial phase of The US-Vietnam Bilateral Investment Treaty Vietnam’s industrial transformation. was signed in 2001, leading to a huge increase in exports, particularly in garments, textiles, and Reforms to the domestic sector prompted the footwear. Vietnam’s membership in the (WTO) growth of a more modern private domestic was finalized in 2007. In 1989, the country’s export sector providing better quality jobs. In 1990, sector was responsible for 4.5 million jobs, mostly the government enacted the Law on Private in agriculture, forestry, and fisheries, but by 2012, Enterprises, which regulated the emergence of this had more than doubled. Jobs in the export private firms, and the 1992 constitution officially sector were created both by foreign-owned firms recognized the private sector as an integral part of (FDI) and domestic firms. A significant share of the Vietnamese economy. A series of subsequent exports and jobs created in the garment and textile reforms that allowed greater market-based price sector, for example, are created by domestic firms setting and opened up the domestic market to – evidence that in Vietnam, the export sector does trade also encouraged the growth of the private not necessarily equate with the FDI sector. domestic sector, particularly in manufacturing and the service industry. In 2000, the new Enterprise Though Doi Moi and related reforms caused Law made it significantly easier for enterprises a massive shift in Vietnam’s jobs picture and to register, which encouraged more businesses provided income-earning opportunities never to move from being an informal household before seen in Vietnam, the country still needs to enterprise to entering the formal sector. This is add even more good and inclusive jobs. 4 BRIEF SKETCH OF TODAY’S JOBS Most Vietnamese people who wish to work each other.26 Also, most formal firms – which do so. This can be seen in Vietnam’s very low produce “good” jobs paying a wage, benefits, and unemployment and high employment rates better work conditions – produce low-value added (defined as working at least one hour in the week goods and services. Approximately 75 percent of before being surveyed). While 80 percent of manufacturing jobs are in assembly, the lowest Vietnamese people age 15 or older are working or value-added activity in the value chain, and half looking for work, only 65 percent of this age group of the jobs in services are in retail. In fact, only are in the labor market in comparable countries.22 10 percent of jobs in Vietnam are in professional Vietnam’s high labor force participation rates are or managerial occupations, and the top ten partly due to the high labor force participation of occupations – employing 2/3 of the labor force – women. Approximately 76 percent of Vietnamese are very low-skilled (Table 1). women age 15 or older are working or searching for work compared with a global average of 50 percent and a regional average of 61 percent.23 TABLE 1: Top occupations in Vietnam, as a share of all occupations, 2014 However, Vietnam has a dearth of quality jobs. Occupation (3-digit VNSCO)  % Most jobs are in low value-added production and Agricultural, forestry, fishery laborers 33.0 Street and market salespersons  7.9 services, with 76 percent of people working in Market gardeners and crop growers  6.7 family farming, household enterprises (Box 1), Shop salespersons  4.3 or in jobs with no labor contract. Limited assets, Building frame and related trades workers  3.7 Textile, fur, leather machine operators  2.7 scale-limitations, and a host of other factors Garment and related trades workers  2.2 constrain the possibility of raising the value- Mining and construction labourers  1.9 Taxi, van and motorcycle drivers  1.9 added of these kinds of employment.24 Nearly Subsistence crop farmers  1.8 half of all agricultural workers (family farmers Source: adapted from Demombynes and Testaverde (2017). or contracted agricultural laborers) are clustered Note: the table includes the ten largest occupations as defined by the in low-productivity paddy 25 and household Vietnam Standard Classification of Occupations (VNSCO). Hundreds more occupations are not included in the table. enterprises primarily produce and trade with BOX 1: Who are non-farm household enterprises in Vietnam? A new study gives detailed insight into Vietnam’s 10 million household enterprises. Non-farm household enterprises are small, mostly informal, and low-profit. More than 20 percent of the labor force owns a household enterprise in Vietnam, providing the range of manufacturing and services that underpin the day-to-day activity in the economy. They are the small noodle shop owners, motorcycle mechanics, specialized craftsmen, corner store owners, taxi drivers, and the myriad of small businesses that rural and urban household engage in. Nearly 2/3 of these enterprises do not have a business certificate, most not even being aware that they legally need to register their businesses. Monthly earnings range from 4 million dong (self- employed) to 9 million dong (employers), though this is shared by the owner and working family members. The average firm size is 2.5 people, one of whom is the owner, and a good share (40 percent) are unpaid family members. Non-pecuniary aspects of the job make it an attractive option for their owners. Nearly 80 percent of Vietnam’s household enterprise owners cite positive reasons for owning an unincorporated business, including earn a better income (34 percent), independence (14.6 percent), family tradition (9.9 percent), or to balance personal and professional life (14.6 percent). In essence, these jobs pay better than agriculture, provide quality of life that is not feasible in formal wage jobs, and are far more accessible than more lucrative public sector jobs. Source: Pasquier et al. 2017. 5 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W From the worker’s perspective, job quality is owners35 and family farmers36 and carry out also limited. The 12 million workers with labor two-thirds of unpaid labor in Vietnam. The contracts – both in the public and private sector gender wage gap is 10 percent, or 12.6 percent – earn more than the minimum wage, more than after controlling for men’s and women’s different 90 percent receive social insurance (but only 75 education levels, though this gap declined percent of those working in registered private between 2011 and 2014 (Figure 2). Gender domestic firms receive social insurance), and have discrimination by employers limits women’s some job stability in terms of work hours and opportunities to move up the job ladder as can employment.27 In contrast, the 38 million jobs that be seen by the fact that 65 percent of recent job do not have a labor contract are of particularly advertisements for managers specified male poor quality by various measures. Many of these candidates. 37 Women are crowded into lower workers earn below the minimum wage28 and paid jobs despite having higher professional do not contribute to social insurance. Also, they aspirations than boys when in lower-secondary often work in several part-time jobs29 and face school. However, there is evidence that some uncertainty in their earnings due to weather, women are trading off lower wages for jobs that health, or price shocks.30 However, even in these provide more family friendly policies, namely informal jobs, there are some non-pecuniary job family leave and social insurance.38 qualities that the workers value. Most household enterprise owners value the flexibility and control that owning one’s own business offers, 31 and FIGURE 2: Wage gap by gender and ethnicity informal wage workers report valuing the time flexibility over higher wages.32 Female -4% Ethnic minority average wage gap between the reference group By some measures, Vietnam’s dedication to -6% -5,6% equality for all its citizens is reflected in its -6,5% -6,6% jobs. Women and men participate in nearly and the majority group -8% -7,2% equal shares in the labor force, an anomaly in comparison with most of the world. Both farm -10% and non-farm household enterprises are owned almost equally by men and women. Land is fairly -12% equitably distributed – though land use titles are still not issued in the name of both spouses. -12,6% -14% A similar percentage of women and men receive -14,2% -14,3% social benefits through their jobs though women -16% -15,4% are much more likely than men to hold wage contracts (71 percent of female wage or salary 2011 2012 2013 2014 employees compared with 52 percent of males), Source: Demombynes and Testaverde (2017) largely due to the high female incidence of public Note: Ethnic minority is defined as not being of Kinh or Hoa sector employment33 and female-biased labor- ethnicity. intensive manufacturing industries. However, women are at a distinct disadvantage People from ethnic minorities face particular by other measures. Women balance their high challenges in transitioning into modern, employment with a 35-hour per week “second” lucrative jobs with social protections. As of 2014, job in household care, with these time demands the primary job of more than 65 percent of workers being even greater for women who are ethnic from rural ethnic minorities was in agricultural minorities or who live in rural areas.34 Women activities, with much higher rates among particular are over-represented among household enterprise ethnic groups.39 They are slowly transitioning into 6 B R I E F S K E TC H O F TO D AY ’ S J O B S off-farm work but still have limited access to the of Hoa and Kinh children. Those ethnic minority market-based jobs that are available to Kinh and children who learn to speak Vietnamese have Hoa rural households. A combination of factors math and reading/vocabulary test scores that are has limited the number of workers from ethnic more similar to the scores of Hoa or Kinh children minorities who have made the transition out of than to the scores of non-Vietnamese speaking primary agriculture and into higher earning jobs, ethnic minority children.43 including their geographic isolation, low skill levels and language barriers,40 and customs and practices as well as a lack of diversity in off-farm FIGURE 3: Primary source of per capita activities (Figure 3).41 An ethnic wage gap persists income, by ethnicity of household head at around 6.5 percent (Figure 2), with women 20,000 other from ethnic minorities bearing the brunt of both gender and ethic discrimination. transfers '000 VND/per capita 15,000 remittances New trends may begin to open up opportunities 10,000 wages for ethnic minority workers. The recent relaxation own business of the ho khau (restrictions on internal migration) 5,000 livestock & sheries may help rural ethnic minority workers to move to more economically dynamic areas to take up jobs42 0 crops as well as increasing the access of migrant children Ethnic Kinh minority or Hoa to education and health services. The enrollment rates of ethnic minority children in primary and Source: Author’s calculations based on VHLSS (2014). lower secondary school are moving closer to those 7 MEGA-TRENDS AND THEIR EFFECTS ON VIETNAM’S JOBS Five trends are particularly likely to affect in the world, it is also home to a growing number of the ability of the current economic model middle-income countries. In 2002, approximately to create better and more inclusive jobs: the 20 percent of households in developing Asia rise of an Asian consumer class, the shifting countries could be classified as being economically trade patterns, demographic shifts, the rise of secure or middle class, i.e. having high enough knowledge economies, and automation (a sixth incomes to cover the cost of day-to-day living, trend – climate change – is briefly discussed in some savings to protect against income shocks, Box 3). While many of these trends intersect with and some left over for additional consumption.44 each other, all provide potential opportunities to By 2015, this had risen to more than half of all improve Vietnam’s jobs picture or impose potential households, equivalent to a consumer class of more threats to better future jobs. This section sketches than 1 billion households. It is estimated that more out the nature of these jobs trends, how they are than 90 percent of developing Asia households will currently affecting Vietnam, and how they might have incomes available for excess consumption affect future jobs. by 2030, thus constituting a substantial consumer class. (Figure 4). Rise of the Asian – and Vietnamese – Consumer Class Within Vietnam, about 70 percent of the The Asian consumer class is rapidly expanding. population has extra money to spend. While While Asia is home to some of the richest countries most of these households can be categorized as FIGURE 4: Share of developing asia households in each consumption category, 2002-2030 100% Extreme poor 90% (PPP $<2.00 per day) 80% Moderately poor (PPP $2.00 - 3.10 per day) 70% Vulnerable 60% (PPP $3.10 - 5.50 per day) 50% 40% Economically secure 30% (PPP $5.50 - 15 per day) 20% 10% Middle class (PPP $15+ per day) 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Source: World Bank (2017) 8 MEGA-TRENDS AND THEIR EFFECTS ON VIETNAM’S JOBS “economically secure,” namely that they spend from processed food to clothing and consumer US$5.50 to US$15.00 per capita daily, they are appliances. The service sector will expand more already a dominant potential source of consumers. as transactions move from households to formal, The number of such households is rapidly sanitized market places and demand for high expanding, already having grown by 20 percentage value personal services, leisure, and high-quality points since 2010. Between 2014 and 2016, three amenities increases. Firms and workers will move million Vietnamese attained middle class status, into these sectors, resulting in more production bringing the share of Vietnamese classified as and service jobs in higher value-added activities. middle class to 13 percent. If Vietnam successfully markets its goods to neighboring countries, the demand from foreign Non-poor households buy more, and different, consumers could lead to an even bigger boom in goods and services than poor households. manufacturing and service export jobs. Non-poor households consume a larger share of total calories in non-rice products as compared Shifting Trade Patterns and to poor households. 45 They purchase more New Trade Partnerships expensive food baskets, including in non-rice Global trade flows have been increasing for cereals, fruits, and meat, that are expected to meet decades, though there are signs that global trade solid standards of hygiene and food safety, and is slowing down. Global trade has increased they buy more non-food products and services. an average of 5 percent annually since 1990 Compared to the poor, the consumer class while Vietnamese trade flows have increased an households in Vietnam spend twice as much per average of 14 percent annually. Both exports and person on meat and fish, and on meals, beverages imports have similar mean annual growth rates and alcohol in restaurants and hotels. They for Vietnam. More recent trends, since the early spend nearly three times as much on housing, 2000s, show similar estimates, though global trade appliances, health and education services. has been declining since 2014 while global FDI has leveled off.47 Urbanization is also shifting consumption patterns. Urban household need to buy food Exports are a strong source of jobs and wages. that in the past they may have produced. They In Vietnam, exports are directly responsible spend more of their income on services (rather for 9.9 million jobs in 2010, primarily in the than food or other basic necessities) than do manufacturing sector, paying out 463 trillion dong non-urban consumers, such as communications, in wages. Another 10 million jobs were created in transport, restaurants, and banking. While sectors (mostly agriculture) that provide inputs to urbanization may be re-shaping Vietnamese the export sector (Figure 5). consumer preferences, perhaps the biggest opportunity for Vietnam is China’s rapid urbanization and consumer growth, particularly FIGURE 5: Direct, indirect and total jobs in services, aged care services, and education.46 content of exports, 1989-2012 20,000 These shifts may have two implications for Jobs (thousands) 15,000 jobs in Vietnam. First, jobs will diversify within 10,000 sectors. For example, as the demand for rice declines in favor of vegetables, jobs will shift 5,000 out of lower-value rice and into higher value 0 1990 1995 2000 2005 2010 vegetable cultivation. Second, jobs will shift Total Jobs Direct Jobs Indirect Jobs across sectors. Demand for manufactured goods will increase as Vietnamese consumers have the Source: Hollweg (2017a) means to purchase more manufactured goods 9 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W Foreign direct investment (FDI) has played a big Progressive Agreement for Trans-Pacific role in trade expansion. More than US$100 billion Partnership (CPTPP), to which Vietnam is a of FDI flowed into developing East Asia in 2015, signatory, is a trading block of countries with a transforming the economic landscape and creating combined total of 13.5 percent of global GDP. millions of jobs. While domestic Vietnamese This will increase access to markets and spur FDI firms engage in direct exports, trade flows are investments and is expected to expand the service strongly driven by FDI, in response to Vietnam’s sectors and boost productivity, while creating new favorable trade terms and other incentives. The opportunities for domestic firms to integrate into FDI sector is an important engine of economic regional value chains. Vietnam’s commitments growth, job creation, and poverty alleviation in under the CPTPP, could help accelerate reforms in the country; directly employing more than 2 many areas, promoting transparency and creation million workers.48 Globalization has brought with of modern institutions. it – whether through FDI or industry standards – greater efficiency through better production Vietnam has a lot to win or lose from these management, access to more markets, and quality shifting patterns. Export-oriented jobs may be control standards. truncated if Vietnam loses its place in export markets or global value chains or if FDI relocates. A number of factors are beginning to change Low-skilled assembly jobs will likely relocate, the patterns of globalization, with potential but there may be new opportunities, particularly implications for the number of and nature in Asian trade corridors and among CPTPP of jobs in Vietnam. First, other countries are countries, for Vietnam to move into higher value- emerging as competitors for Vietnam for low- added domestic and FDI-led exports, including skilled production jobs, including Cambodia and an expansion of service exports. This would bring Myanmar, while African countries are increasingly with it higher value-added jobs. The skill level entering sectors where Vietnam enjoys significant of the labor force and weak linkages to domestic FDI. Second, as China’s labor costs rise, more inputs markets may hinder Vietnam’s ability to labor-intensive and low value-added businesses capitalize on this mega-trend. are looking to move to lower-cost locations, while China is itself increasingly looking for new Rise of the Knowledge Economy investment opportunities overseas. Third, goods Twenty-first century workers require a more exports are becoming more sophisticated and complex set of skills than in the past. There has increasingly involve new technologies, requiring been a global shift away from manual, routine a more knowledge-based assembly process jobs and into non-routine, thinking jobs.50 While than in the past. Additionally, cost-competitive basic cognitive skills (reading and writing) and wages have driven growth in knowledge-based technical knowledge in one’s field was the recipe industries in developing countries, many of which for a productive worker in the past, today’s have become major destinations for outsourced employers are looking for a range of skills and services and processes. Fourth, the accelerating knowledge. This is being driven by automation, pace of technological change is beginning to where machines are taking over non-thinking affect the production of manufactured goods tasks or a part of the production process, as well and the location of manufacturing production.49 as the increase in demand for high-value products Previously out-sourced low-skilled jobs are and services driven by the expanding consumer returning to the home countries of the lead firms class and global value chains. where high-skilled automated processes are being used (re-shoring). While Vietnam has relied on low-knowledge assembly in the manufacturing sectors, it is the New trade agreements provide additional “knowledge jobs” in value chains - in design, opportunities. The C omprehensive and R&D, marketing, after-sale services, logistics, 10 MEGA-TRENDS AND THEIR EFFECTS ON VIETNAM’S JOBS and vertical farming (Figure 6) – that represent a education, and given the scarcity of continuing larger share of overall value-added than assembly education programs, they have few opportunities jobs. Further, service exports in themselves can be to acquire the skills needed for knowledge jobs. a lucrative industry, especially as some developing East Asian countries are off-shoring some service Automation and Digitization industries and as Vietnam develops its own in the Workplace expertise in, for example, software development Machines, robots, artificial intelligence, and and other emerging service industries. information technology are rapidly entering workplaces around the world and in Vietnam. Knowledge jobs are emerging in Vietnam but Cell phone apps monitor weather conditions for the skill level of the workforce may limit their farmers in the Mekong Delta, sharing apps (most growth. Although the fastest growth is still in low- prominently ride sharing and accommodation) skilled manual jobs, semi-skilled jobs grew by 40 are upending traditional markets, electronic jobs percent between 2011 and 2015, and professional boards are accessed by youth in Ho Chi Minh careers – electro technology engineers; finance City, machines are alleviating manual work in professionals; sales, marketing, public relations farms and factories, and the electronics value- professionals; and engineering –increased by 17 chains have become the second largest source of to 25 percent.51 However, the education profile of FDI in Vietnam (after garments). This technology Vietnam’s population shows that it is not equipped has the potential to free up Vietnamese workers for the knowledge economy. Only 8 percent of from lower value-added tasks, potentially the labor force has a university education, while enabling them to engage in less tedious, and 85 percent have only a secondary education or higher value-added, jobs. These platforms may less.52 Some groups are even more disadvantaged also be a catalyst to greater productivity and more in terms of education and skills. Ethnic minorities inclusion (trade and financial) of small producers have much lower education skill levels than Kinh by providing access to markets at a low cost, or Hoa children and adults. Only 6 percent of as Alibaba does with SMEs in China. But they adults who are ethnic minorities have a vocational may also disrupt existing jobs, and change the or tertiary education compared to 20 percent of notion of a job, ranging from people working at Kinh or Hoa adults. Similarly, few older workers home instead of traditional workplaces, or people in Vietnam have completed upper secondary working as independent workers for short periods FIGURE 6: Schematic value chain, by value added for each stage of the production process Value Added High Globalization ail s s Ret ice ale t Tes uts erv &S & on & np es uts g bly uti tin ic i sal inp n em trib rke ner er- sig D Low Key Ass Ma Dis Aft R& De Ge Upstream Downstream Business Functions Source: Fernandez-Stark et al (2011). 11 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W (the so-called gig economy) in what would have more crops to be grown on the same plot of been contracted work in the past. land per year, which increases labor use. Further benefits include the growth of agriculture-related There is uncertainty in when and how service industries. Agricultural machinery rental automation will affect the nature and number of and repair services provided by cooperatives and jobs in Vietnam, with estimates of technology- private companies are already providing well- induced job losses in Vietnam ranging from 10 paid jobs in rural areas and attracting young to 70 percent. While jobs will adapt or emerge people who otherwise migrate to urban areas. in response to new technology, others may be However, many farming jobs in Vietnam will lost. According to the Vietnam STEP survey, a still be difficult to mechanize in the near future, specialized skills survey collected in 2012, the jobs whether due to the cost of machinery, absence with a low risk of being replaced by technology of machinery that is compatible with Vietnam’s are those that require human skills (such as local farming conditions and topography, or an management), cognitively challenging skills, agricultural infrastructure that does not facilitate and higher-level reading comprehension and comprehensive electrification and mechanization. math. Those jobs that require basic math and reading are more susceptible to automation.53 But Shifting Demographics and what tasks and jobs will be automated, and over the Increasing Dependency Ratio what time frame depends on several factors, many The simultaneous decline in fertility rates of which portend a long transition process for and increased longevity in Vietnam will soon Vietnam (Box 2). decrease both the share of the working age population and the time that it has available for Mechanization in Vietnam’s largest jobs sector market work. The share of the population that is - agricultural production - is having such a of working age has reached its peak and will begin mixed effect: in some instances, it replaces hired to decline in 2018, just as the elderly share of the labor, in others it creates more and better jobs. population takes off (Figure 7). While 6.7 percent Mechanization of manual processes tends to of the population was aged 65 or over in 2017, increase returns to labor thereby improving the this share is expected to reach 21 percent by 2050. quality of jobs. For example, using mechanized This implies a sharp increase in the dependency pumps for irrigation often allows two or three ratio in Vietnam from 0.42 in 2015 to over 0.6 BOX 2: Rise of the sewbots? Maybe not for a while… Recent publications have estimated that 86 percent of Vietnam’s garment jobs will be replaced by machines in the next 15 years. This is certainly a frightening prospect, given that this $29 billion (annual exports) industry is the source of 13 percent of Vietnam’s exports (2015) and 1.3 million jobs. However, a closer look at the apparel industry suggests that these predicted job losses may be excessive, especially in the short run. The jobs that cannot be automated – specialized apparel, knowledge tasks that are higher up the value chain – will still exist. And a host of new jobs will arrive – running and repairing the machines, programming machines to accommodate new styles, and designing shop floors to be machine-friendly. Several factors need to come together for machines to begin replacing humans, none of which are the case in the apparel industry: 1. The existence of machines to replace labor. While technology is being employed in some parts of the apparel global value chain, there is still not a machine that can replace the cut-make-trim (sewing machine operators) that employ 70 percent of garment workers. While the first CMT machine is expected on the market in 2019, it can only produce the most basic garment – an 8 step tee-shirt – quite distant from the 78 step dress. 2. Repetitive tasks with few changes. Fashion changes quickly. While people can easily learn to stitch a new angle, stretch a new fabric, or add a new adornment, machines will not have the flexibility for many years. 3. High labor costs relative to the cost of machinery. Although labor costs are increasing in Vietnamese garment factories, they still pale relative to machines. While the CMT machine for tee-shirts is estimated to pay for itself within two years (of displaced worker wages), the machine itself will need to be replaced frequently as fashion changes. ILO (2016), Frederick (2017), http://softwearautomation.com/ 12 MEGA-TRENDS AND THEIR EFFECTS ON VIETNAM’S JOBS by 2050, meaning that working-age adults will be dependency ratio is expected to increase from 0.1 caring for older adults and children, which will in 2015 to 0.34 by 2050.54 reduce the amount of time that they have available to work. While the child-dependency ratio will These demographic trends have several stay relatively constant around 0.3; the old-age implications for Vietnamese jobs. First, women, who already have high work rates and spend significant time on housework, will be pressured FIGURE 7: Annual share of the population by to provide unpaid eldercare services for family age, 1950-2050 members, thus crowding out their market work 80% time. This may be exacerbated by a fiscally 70% unsustainable pension system that, if it collapses, 60% could leave retired adults to depend on their 50% working children.55 Second, since there will be 40% fewer people, it will be necessary for the existing 30% workers to do more. Third, the falling size of the 20% workforce may encourage the adoption of labor 10% 0% saving technology by Vietnam-based firms, thus changing the skills needed in Vietnam’s future jobs. 1950 1957 1964 1971 1978 1985 1992 1999 2006 2013 2020 2027 2034 2041 2048 Fourth, the care industry will likely expand to cater 0 - 14 15 - 64 65+ for the elderly population, as is currently occurring Source: UN Population Prospects, the 2015 Revision. in China, developed Asia, Europe, and the United States, and may open up new job opportunities.56 BOX 3: Climate change and jobs Climate change is expected to have a significant impact on jobs globally. There is little evidence about its exact impacts, but there are some scenarios that merit consideration. Climate change is a significant risk to Vietnam. Temperature increases per decade in Vietnam since the 1960s is double that of the global average. Rising sea-levels expose a third of Vietnam’s population to the risk of flooding, rising to more than 80 percent in the Mekong and Red River Deltas (see map). These shifts are accompanied by greater rainfall variability, more extreme weather, increasing water salinity, Percent of droughts, and the nature and frequency of crop and livestock population (and human) disease. exposed These changes may lead to jobs loss, particularly in 0 - 20% industries that rely on the environment. Changing salinity threatens 2/3 of Vietnam’s fish from aquaculture. 20 - 40% Agricultural land in the Mekong Delta is slowly eroding 40 - 60% and, when coupled with increasing salinity, puts at risk Disclaimer: the livelihood of 13.6 million rice farmers. The services and 60 - 80% The map shown is for illustration purpose. manufacturing jobs that form the up-stream jobs in agro- Percent of The boundaries, color, 80 - 99% population and food value chains may be affected. The tourism industry denominations, may suffer as temperatures rise, coasts erode, and weather exposed other information shown on any map becomes more unpredictable and severe. And productive in this work do not 0 - 20% assets may be lost to floods or sold-off to manage the imply any judgment on the part of the income losses induced by weather shocks. 40% 20 - Group World Bank concerning the legal Jobs will be created, destroyed, or transformed. They may status of40 - 60% any territory or the endorsement respond to the new conditions created through climate 60 - 80% or acceptance of change, such as more air conditioner installers, deep water such boundaries irrigation engineers, or infrastructure repair or they may 80 - 99% 13 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W slow down climate change, as in renewable energy. But international experts predict that the primary implications of climate change are the transformation of jobs. Primary producers may need to shift to drought (or flood) resistant crops or livestock. Tourism operators may need to diversify into regions that are less threatened by rising sea levels or high temperatures. Climate changed-induced migration is also expected to change the jobs picture. Massive out-migration from the Mekong Delta is partly attributed to impact of climate change; a similar picture is emerging in the north. The movement of low-skilled people to cities will expand the size of the household enterprise sector as well as provide new workers in low-skilled manufacturing. More workers will be looking for jobs and income insecurity will increase. The policy challenge is to facilitate the transitions now to limit the negative jobs impacts and prepare for a changed future jobs market. Scott (2014); Bangalore et al (2016; http://www.independent.co.uk/environment/climate-change-vietnam-migration-crisis-poverty-global-warming- mekong-delta-a8153626.html; http://www.ilo.org/global/topics/green-jobs/WCMS_371589/lang--en/index.htm 14 A ROADMAP FOR FUTURE JOBS: MOVING BEYOND THE STATUS QUO What will future jobs look like? One scenario This report recommends eight policy areas for is that they will look a lot like today’s jobs if generating more good and more inclusive jobs in Vietnam maintains the status quo. Vietnam’s Vietnam in the context of emerging mega-trends: high GDP growth rates, high levels of labor 1. Lowering the barriers to growth of domestic productivity, and fully employed labor force small and medium enterprises. suggests that the Doi Moi strategy still has much 2. Encouraging enterprises to move into to offer Vietnam and its people. The current knowledge-intensive segments of regional and economic activity characterized by rapid exports global value chains. and low value-added assembly jobs in enclaves 3. Facilitating the development of Vietnam’s agro- with little connection to the broader economy is food system. likely to continue to grow. If we assume that the 4. Encouraging the agricultural sector to diversify transition from family farms and enterprises to into high value-added crops. jobs that are covered by labor contracts continues 5. Facilitating business links between household at the same rate as in 2008 to 2015, then about enterprises and SMEs. two out of every five jobs (43 percent) will be 6. Building worker skills for today’s and contracted wage jobs by 2040. tomorrow’s jobs. 7. Providing the information needed to place the A second scenario is that Vietnam will leap-frog right workers into the right jobs. to more better and inclusive jobs by investing 8. Providing auxiliary services to facilitate labor now to ensure that its economy and workforce force participation and labor mobility. are prepared for the emerging mega-trends. While there are still gains to be made under the The first five focus on the firm and markets (labor current model, the government might consider demand) (Figure 8), by creating new good jobs in adopting an economic strategy that capitalizes on the modern sector (strategies 1-3) and improving emerging global trends, by moving up existing the quality of existing jobs in traditional sectors global value chains, embracing technology, serving (strategies 4 and 5). The last three focus on a diverse emerging consumer class domestically workers, in terms of having the right skills and across Asia, and morphing into a knowledge (strategy 6) and clearing out other obstacles so economy. The aim of these policies would be that they can find and thrive in the right jobs to foster an innovative, dynamic domestic firm (strategies 7 and 8). sector, generate a lean and smart labor force to create and work in higher value-added functions, and incorporate largely excluded economic sectors and people into the economy. 15 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W FIGURE 8: Policy for better and more inclusive jobs Creating More Good Jobs in the Modern Sector • lower the barriers to growth of domestic small and medium enterprises • Develop knowledge-intensive sectors • Modernize the agro-food industry Enhancing the Quality of Existing Jobs JOBS in the Traditional Sector • Diversify into high-value crops & local value chains • Link household enterprises to SMEs Connecting Qualified Workers to the Right Jobs • Build worker skills for today’s and tomorrow’s jobs • Provide information for job search • Provide auxiliary services to open job opportunities Reform Area I: Creating More Job 1. Lowering the Barriers to Growth of Openings in “Good Jobs” in the Domestic Small and Medium Enterprises Modern Sector Domestic enterprises can be an engine for The best jobs, defined by higher labor creating better jobs, both today and as the productivity and wages and social benefits, are mega-trends take off. The entry of FDI into through contract wage employment. They are the economy under Doi Moi has been a boon inclusive of women and youth. These are also the in terms of creating employment. Although fastest growing types of jobs in Vietnam today foreign firms comprise less than 1 percent and, if Vietnam prepares for the opportunities of all firms, they employ 30 percent of non- brought through the mega-trends, they have government contracted wage workers and are potential to grow even more. Thus, the policy mostly very large firms. However, the majority challenge is to foster the creation and growth of of jobs have been created by domestically owned enterprises that are conducive to job creation, firms (Figure 9). Some are quite large, but the create high value jobs, and position Vietnam for majority are in small and medium firms, which even more as the mega-trends are realized. Three collectively employ 35 percent of all workers with policies areas are proposed. non-government contracts. 16 A R O A D M A P F O R F U T U R E J O B S : M O V I N G B E YO N D T H E S TAT U S Q U O FIGURE 9: Distribution of jobs across firm size and ownership type, % 100% 80% 60% 43% 40% 22% 20% 9% 10% 8% 7% 0% 1-9 10 - 19 20 - 49 50 - 99 100 - 499 500+ All Firm size, by number of workers Domestic Private Foreign Public-majority Public-minority Share of Wage Jobs Source: Adapted from Aterido and Hallward-Dreimeier (2017) Perhaps more importantly, the private domestic Job destruction through firm death is sector is contributing more to net job creation concentrated in larger firms. Large domestic than any other firm ownership type, particularly firms of all ages – both private and SOEs – employ very small firms (Figure 10). Most of this is due to a lot of workers and destroy a lot of jobs (Figure the entry of new firms since few private domestic 10). This is in contrast with large foreign firms, firms expand. However, among the firms that have who continue to add jobs with age. What is not added more jobs than they have shed, most are captured by these data is the fact that one-third of small and medium-sized firms employing 10 to micro-firms exit the market within three years so, 100 employees. These firms have a high rate of job although they create many jobs initially, these jobs creation for the first six years of life and then they are short-lived. stabilize, and most of them are domestic, non- public firms. These trends point to four conclusions about the types of firms that will be the source of contracted wage labor in the future. First, small FIGURE 10: Job creation and destruction, and medium-sized domestic firm are the source by firm ownership, size and age of most job growth despite the constraints that they face in starting up. Second, very small firms have high failure rates. Third, a small number of 1000 2000 3000 large foreign firms play a large role in job creation. 000 workers Fourth, SOEs create and destroy jobs at similar rates (with no net job creation). -1000 0 Encouraging firm entry, firm growth, and continued inflows of FDI will also lead to 1-9 10-19 20-99 100+ 1-9 10-19 20-99 100+ 1-9 10-19 20-99 100+ continued productivity and job growth. Firms Domestic Private Foreign Public that are young, foreign, and large drive productivity entry age 2-5 age 6-9 age 10+ increases. Overall productivity in registered firms has been increasing on average over time (solid Source: Aterido and Hallward-Driemeier (2017). line in Figure 11). Also, contrary to popular belief, more productive firms have larger labor forces in 17 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W Vietnam. In fact, the larger size of foreign firms Productivity gains translate into higher wages, is due to higher firm productivity rather than especially in private firms. In terms of job ownership; domestic and foreign firms with quality from the workers’ perspective, foreign the same productivity have the same rates of and older firms pay higher wages than domestic job creation. The positive relationship between or SOEs. Exporters, firms with a high share of firm size and productivity has gotten stronger female workers, and capital-intense firms tend over time (covariance term in Figure 11). More to increase wages, while SOEs provide the lowest productive firms are less likely to exit the market, wage increases across time. As firms increase which means that the jobs that they create their productivity, their wages tend to rise but continue to exist. The positive relationship is only minimally. This effect is greater in foreign strongest for domestic private firms, half as strong firms than in domestic firms and is lowest for foreign firms, and weak for SOEs. Worryingly, in SOEs. the most productive firms are downsizing their workforce57 by making labor-saving technological The emerging mega-trends will open new changes or by shifting production to be more markets to domestic firms, but these must be capital-intensive. These job losses are particularly actively sought. Emerging consumer markets high among highly productive foreign and state- within Vietnam, growing regional value chains, and owned enterprises. efficiency-enhancing technology can offer domestic firms new areas of business. Also, the increased demand for services from the growing Vietnamese and Asian middle class and the growing services FIGURE 11: Productivity and the trade-off export market both offer opportunities for domestic (covariance) between productivity and jobs small and medium firms. 11.45 0.80 This points to the need for both short-run Aggregate productivity 11.40 0.60 policies to extract more jobs from the current Covariance economic model and medium-term strategies 11.35 0.40 to ensure that the workforce and the domestic 11.30 0.20 sector are ready for the emerging mega-trends. In the short run, the report proposes the following 11.25 0.00 policy directions: 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 • Level the playing field for the private Aggregate productivity Covariance sector. The government could do more to encourage the entry and growth of domestic Note: Covariance is defined as the correlation between productivity of the firm and number of workers. firms and to continue attracting new, large foreign firms. It could do so first by further loosening government controls over factors of production: land usage can be further These trends point to four conclusions about relaxed, tax rates could be adjusted to reduce the types of firms that will be the source of the gap between tax responsibilities faced by contracted wage labor in the future. First, small foreign and domestic producers,58 and the and medium-sized domestic firm are the source state needs to be more cognizant of how it of most job growth despite the constraints that distorts input markets – through considerable they face in starting up. Second, very small firms purchase of production inputs – and capital have high failure rates. Third, a small number of markets that give preferential access to SOEs. large foreign firms play a large role in job creation. Second, the government could reconsider Fourth, SOEs create and destroy jobs at similar the virtual monopoly held by SOEs in sectors rates (with no net job creation). such as fertilizer, coal, electricity and gas, 18 A R O A D M A P F O R F U T U R E J O B S : M O V I N G B E YO N D T H E S TAT U S Q U O telecommunications, water supply, and exporters. There is great scope for SMEs to insurance. 59 While some of these may be provide inputs to MNCs and exporters, but necessary for the purposes of national security most are not producing at a quality or quantity or equity, removing protections from SOEs level that is compatible with production might open them to some productivity- processes in the larger firms. As a result, SME enhancing competition and result in greater linkages to MNCs are quite weak. As SMEs job creation and higher wages in the private have difficulty filling the information gap sector, where firms tend to share productivity (they do not know what they do not know), gains with workers. the government can support such information • Further facilitate firms’ market entry and collection and dissemination to guide SMEs to exit. Vietnam requires more steps to register up their standards. a business than the regional average and • Support investments in logistics, finance, more than most other lower-middle income marketing, and other professional services countries. Simplifying this procedure would to suppor t manufactur ing expansion. help firms to enter the market and thus create This recommendation is the topic of the jobs.60 It would also help to make bankruptcy next section. proceedings faster and less complex in order to enable firms to make an orderly, transparent, 2. Encouraging Enterprises to Move and efficient exit from the market, leaving the into Knowledge-Intensive Segments most productive firms to continue, thrive, and of Regional and Global Value Chains potentially grow. Services have the potential to account for a larger • Expand links between local SMEs and MNCs. share of export earnings, both directly and also SMEs are job creators, but they are growth indirectly as inputs into manufacturing and constrained so building business links between agricultural products, and thus to create more them and multi-national corporations (MNCs) high-quality jobs. The emerging knowledge may enhance their growth capacity. First, economy and the rise of a middle class that will SMEs need to be provided with information demand more services present Vietnamese firms on: (i) industry standards and how to meet with the opportunity to move into higher value them; (ii) the quality of goods and timeliness of industries – and thus better jobs – than low-skilled delivery from prospective suppliers; (iii) credit assembly for export. Design and R&D as well as options; and (iv) a supplier’s database with marketing and after-sale services represent a larger information about secondary markets for the share of overall value added than production. In specialized goods that the MNC is seeking to fact, service exports generate higher wages per purchase. Second, the government could help unit of output than manufacturing, 55 dong for by eliciting feedback from MNCs or lead firms every 100 dong exported compared with 29 dong about what they need, by providing systematic per 100 dong of exports in manufacturing. 61 matchmaking services between buyers and However, services employ fewer workers per sellers, and developing mechanisms to provide unit of output. follow-up support. Vietnam’s engagement in export-related services In order to ensure that the workforce and the is quite limited compared with its involvement domestic sector are ready for the emerging in the production stage of value chains. In 2015, mega-trends, the report also makes the following Vietnam’s exports of services represented less than medium-term proposals: 7 percent of Vietnam’s export basket (compared to • Establish structures to enable dialogue between 15 percent in Korea, 16 percent in Malaysia, and public sector firms, large firms, and SMEs 22 percent in Thailand) and were dominated by within the same sectors to help SMEs to become travel and transport services (95 percent) rather suppliers for larger firms, especially MNCs or than other commercial services. 19 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W The Vietnamese economy will need to move This is primarily a medium-term policy agenda, into services for exports if it is to continue but there are some short-term actions that can be leveraging FDI to produce better quality jobs. taken now: The services might be inputs to value chains in • Streamlining the logistics regulatory environ­ which Vietnamese firms are currently engaged, ment and upgrade domestic infrastructure to allowing them to upgrade to providing more improve connectivity. sophisticated products and tasks and capturing • Support links between exporting firms and more value-added domestically. However, the domestic input-supplying firms. most prevalent ”backbone” services that are being provided in other developing countries are The medium-term objective is to build new not yet common in Vietnam, such as transport, products and skilled workers to drive a knowledge- telecommunications, finance, and other based service economy. Three specific areas for professional and business services. action are: • Foster R&D and innovation. This will require Backbone services have the potential to play legislation or incentives to attract private a bigger role in Vietnam’s export sector and investment or public subsidies to bolster to be a source of higher-quality jobs. Vietnam Vietnam’s meager R&D infrastructure and should try to ride the ”third wave” of offshoring connect local facilities with national or in business process outsourcing (BPO) services international partners who have knowledge as jobs have already started moving out of more of local and global markets. The Law on expensive places like India and China and into High Technologies also needs to be revised other East Asian countries. Although Vietnam is to encourage R&D in a much broader range not one of the top 10 countries for outsourcing of sectors. today, it has a growing BPO sector and increasing • Lift formal restrictions on service trade. The capability in outsourced IT services such as current regulatory framework disadvantages software development. 62 It has made huge service exports. For example, lifting foreign strides in developing its domestic services sector equity limitations and caps would facilitate by reducing barriers to trade and investment, greater regional integration for Vietnam expanding telecom coverage, and reducing within ASEAN. access costs, and has promoted programs for • Build the human capital needed for knowledge- developing technical skills. Yet these initiatives intensive service exports. A short-term solution are still hindered by the restrictive regulatory and would be to relax emigration regulations and institutional framework for domestic and foreign allow foreign professionals in the export- firms, by weak telecommunications infrastructure, related industries to move to Vietnam. Also, and the lack of skills and supporting professions participating in regional markets might offer such as accounting and legal services.63 Vietnamese firms a chance to learn from leading companies in the region and to play Vietnam is uniquely positioned to strengthen a bigger role than if they were competing in its logistics industry. It performs well on the international markets. This would require logistics performance index, higher than many Vietnamese companies to explicitly align other lower middle-income countries, but it is their products and services with regional far behind China and not that far ahead of the value chains and to build into their own trade Philippines. Its international shipping scores agreements opportunities for Vietnamese favorably, but its micro-management systems professionals to receive on-the-job training. In are lagging and these are likely to become more the longer term, Vietnam will need to develop important with more advanced goods and its own service professionals who can compete processes and as customers want greater speed in to the highest international standards. getting customized goods to market. 20 A R O A D M A P F O R F U T U R E J O B S : M O V I N G B E YO N D T H E S TAT U S Q U O 3. Facilitating the Development in five rural households relies exclusively on of the Agro-food System agricultural incomes (Figure 12). One-third of Vietnam’s agro-food system is already a source rural households derive their income from non- of off-farm rural jobs and has the potential to farm jobs, an increase of 10 percentage points yield even more if it can capitalize on several between 2004 and 2014. These jobs are often mega-trends. The agro-food system comprises affiliated with the broader agro-food system. not only primary agriculture but also a range of Another 31 percent of households mix farm and manufacturing and service jobs in, for example, non-farm work, although this is shrinking over farm inputs and services, food storage, food and time in favor of non-farm wage jobs.65 Male- agro-industrial processing, distribution and headed households are more likely to engage in logistical services retailing, and food service wage work while female-headed households are provision. In fact, Vietnam’s agro-food system is more engaged in self-employment activities.66 The comprised of multiple “complete” value chains that share of households that rely solely on agricultural can locally produce raw materials, intermediate income differs by region, and, notably, ethnic products, and end products, either for domestic minorities derive a large share of their income consumption or export.64 With urbanization and from agricultural activities. a rise in the consumer class in Vietnam and in the region, mechanization, and the development of National agro-food chains are linking rural regional value chains, manufacturing and service farmers with small-scale urban markets and jobs in the agro-food system have the potential to household enterprise jobs. Urbanization and grow significantly. consumerism is encouraging the expansion of low-skilled, small-scale services in agro-food Already households are beginning to diversify products in urban areas. The new activities into other parts of the agro-food chain. Although include safer informal food distribution systems nearly 40 percent of workers identify family (such as hygienic wholesale and wet markets), farming as their primary work activity, only one a vibrant street food culture, large and small modern retail distributors, and firms specializing in efficient urban food logistics and the reduction FIGURE 12: Income sources of rural of food waste. These small-scale activities are households, 2004, 2010, 2014 creating many jobs, particularly in the household enterprise sector. 100% 90% 19% 17% 17% Other sources Vietnam also has a significant opportunity 80% to create jobs in large-scale agro-food chains. 70% 22% 31% 32% Non farm & These industries are responsible for 11 percent Share of income 60% non ag wages of GDP, but they currently account for only 50% an estimated 4.5 percent of all jobs in the 40% 36% 32% 31% Farm, non farm Vietnamese economy (equivalent to about 31 30% & ag wages percent of industrial jobs) compared to 15 20% percent and 46 percent respectively for primary 10% 23% 21% Farm 19% & ag wages production. Past global trends suggest that off- 0% 2004 2010 2014 farm jobs in agro-food chains are due to expand in Vietnam (Figure 13) though the automation of Source: World Bank staff based on the 2004, 2010, 2014 VHLSS. processes to prepare primary goods for market Note: “Farm and ag wages” is only farm income, while “farm, non- farm, and ag wage” is a mix of farm and non-farm wage and and the strict hygiene and processing standards non-wage income. “Non-farm and non-ag wage” is only demanded in global value chains may limit job non-farm income. “Other” may include remittances, transfers, pensions, or other such sources of income. growth in agro-food manufacturing to less than past trends might indicate. 21 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W FIGURE 13: Progression and distribution of jobs in a food system as countries develop Low Income: e.g. African countries Food manuf./ industry 3% Farming 91% Food services 6% ~80% of all jobs Middle Income: e.g. Brazil Food manuf./ industry 25% Farming 49% Food services 26% ~30% of all jobs High Income: e.g. US Food manuf./ industry 13% Farming 21% Food services 66% ~10% of all jobs Source: WB staff estimates. Some segments of the food processing industry Agro-food processing also has the potential are more jobs-friendly than others.67 A recent to create more inclusive jobs if the facilities analysis by the International Finance Corporation are located near where the primary inputs are mapped 22 agro-industry subsectors in terms of produced. Food processing factories remain their attractiveness to investors and their value to rare in the 304 industrial zones established in the Vietnamese economy as well as their potential more than 60 cities and provinces across the to generate jobs. This revealed that the sectors that country. While most current fish processing and are both good for investors and good for workers rice milling operations are in close vicinity to (upper right quadrant, Figure 14) are horticulture primary production, the remainder of the food and aquatic products, both of which have the and beverage processing industry appears to be potential to deliver many jobs with high returns concentrated in and around Hanoi or Ho Chi in both the primary and tertiary segments of Minh City. the value chain. 22 A R O A D M A P F O R F U T U R E J O B S : M O V I N G B E YO N D T H E S TAT U S Q U O FIGURE 14: Investment attractiveness and job creation capacity of different segments of the food system fruit/veg/ ower farms fruit/veg storage/packing sh farms feed processing sh grading/packing job creation capacity rice products sh processing -3 -2 -1 0 1 2 3 4 dairy products speciality rice mills Arabica co ee mills seeds general mills Robusta co ee, rice farm mills attractiveness of value proposition for investors Source: Adapted from IFC (2014). To foster the ability of the agro-food system to • Strengthen public and private sector capacity create better paid and safer jobs, a range of job- to ensure safe food for both domestic and friendly policy interventions are needed: international markets. Vietnam has already • Encourage investment in agro-food processing, taken important steps in this regard, but it food logistics, and modern retail. To do this, will also need to: (i) consider models such it will be necessary to reduce the cost of as co-regulation, which relies on greater domestic enterprises in the agro-food system, private sector involvement; (ii) strengthen to level the playing field between SOEs and public control measures for food safety; (iii) private agro-food processors, to enter further require private companies to adopt HACCP trade agreements to increase the access of (Hazard Analysis and Critical Control Vietnamese products to international markets, Points), traceability, and other food system to implement agro-food incubation programs management systems; and (iv) implement for emerging and start-up SMEs, and to regulations and provide technical support upgrade skills for the service jobs that are to ensure safe food practices across the particular to the agro-food system. spectrum of small to large food processing, • Encourage financing to upgrade food market handling, and distribution enterprises. These infrastructure at the local level. Wholesale and upgrades would need to be accompanied by urban wet markets are still largely informal. brand development and trade promotion to Upgrading their sanitation, logistics, hygiene increase the visibility and perceived value of standards, and facilities will not only improve Vietnamese products overseas. the reputation of street food culture but also • Provide incentives to encourage food industries to provide higher value-added job opportunities invest in cities close to the agricultural production for family enterprises. Credit agencies should base and areas with underemployment to foster be encouraged to provide preferential lending the creation of inclusive jobs. The agro-food rates and repayment schemes to attract public- industry would have a comparative advantage private investments. in locating in secondary cities where it would 23 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W be near its primary inputs. Such investments integrate family farms and household enterprises are particularly needed in the upland into the modern enterprise sector. provinces of north Vietnam and the Central Highlands where there are very few economic 4. Encouraging the Agricultural Sector opportunities and would create employment to Diversify into High-Value Crops opportunities for Vietnam’s ethnic minorities. While creating more and better jobs will take time, agriculture, as a part of the broader food system, Reform Area II: Enhancing can be leveraged to deliver more and higher the Quality of Existing Jobs in quality jobs. On average, agricultural productivity Traditional Sectors is low, but there are some key differences between Although Vietnam continues its structural commodities, (Box 4), some of which are more transformation process, it has a large stock of labor-intensive and higher-value than others. low-value added jobs, namely family farming Fruit, pepper, and coffee cultivators earn double (and related primary production) and household the amount that paddy producers earn,68 but enterprises. Today they comprise 60 percent of due to various government policies, agricultural all jobs and, if they continue to contract at the land use remains heavily skewed toward paddy rates observed in the past 8 years, they will still production, as well as production of maize and comprise more than half of all jobs by 2040. They cassava, accounting for 70 percent of agricultural are overwhelmingly the source of employment land in 2014.69 for ethnic minorities, older workers, and the less educated, thereby being intricately linked to Significant economic and better job gains can poverty reduction. Thus, these job sectors cannot still be achieved by facilitating the shift of labor be ignored. Two policy areas are proposed to better from less to more productive activities. This BOX 4: Properly measuring agricultural productivity At first glance, agricultural productivity is low in Vietnam. Vietnam’s average agricultural labor productivity in 2014 was VND 28.6 million per worker annually, 60 percent smaller than the average labor productivity in Vietnam’s industry and construction. Correctly measuring agricultural labor productivity leads to more nuanced conclusions. Actual hours worked is lower in most agricultural production than in manufacturing or services. When adjusted for actual work hours, agricultural productivity is estimated to be twice a large, equal to VND 53.7 million per worker per annum. The average productivity gap between agriculture and manufacturing or construction narrows to only 15 percent for construction and 30 percent for manufacturing and transport and warehousing. Within the agricultural subsectors, labor productivity in fisheries, coffee, pepper, and fruits was higher than that in construction and even food processing industry, the largest off-farm jobs alternative to farmers. TABLE 2: Comparison of annual and per-hour-work adjusted labor productivity, 2014 Annual labor productivity Per-hour-work adjusted annual (GDP/worker) (VND) productivity (VND) Agriculture 28,600,000 53,710,000 Crops 51,000,000 Livestock 57,000,000 Agricultural services 76,000,000 Fisheries 68,750,000 Forestry 39,250,000 Manufacturing and processing industry 70,000,000 Construction 60,700,000 Transport and warehousing 73,200,000 Source: IPSARD’s estimate based on VHLSS 2014 and GOS 2016. Note: The share of crops in total agricultural output was 56 percent, livestock accounted for 16 percent, fisheries for 16 percent, forestry for 3 percent, and agric. services for 1 percent. 24 A R O A D M A P F O R F U T U R E J O B S : M O V I N G B E YO N D T H E S TAT U S Q U O would particularly affect women, who are more adoption of sustainable agricultural practices likely than men to cultivate rice and less likely to to reduce the sector’s vulnerability to weather, cultivate high-value crops such as coffee, cashews, price fluctuations, and natural disasters. or pepper. 70 Since farmers keep the income • Provide family farmers with professional that they produce, switching to such crops may development services. In order to move into translate into more employment (in terms of work producing new crops and feeding into growing days) and better job quality (in terms of higher domestic and international value chains, agricultural income to rural households).71 primary producers will require a deeper knowledge base and continuous learning. Diversifying farmland use away from rice and Therefore, there is a need to develop a broad maize is also consistent with dietary shifts range of private technical, advisory, and occurring both domestically and globally. financial services for Vietnamese agriculture There has already been a decline in national and to develop dedicated programs to support consumption of rice and rapid rates of growth agro-entrepreneurship (such as farmland in the consumption of fruits and vegetables, transfer services and farm business education), processed foods and, especially, animal products,72 particularly for women who currently benefit and this growth is expected to accelerate. from fewer extension services than men. • Foster stronger and more consistent links Given the importance of family farms for between primary producers and the agro- jobs today and well into the future, a range of food system. Primary agricultural producers priority policy reforms merit consideration by will gain most if they have access to regular policymakers: and professional markets. This will require: • Adopt policies and programs to accelerate shifts strengthening farmer cooperatives and in agricultural land use, especially from mono- expanding their provision of a broader range of crop rice to mixed farming or high value crop commercial and marketing services; providing production. A high priority should be to convert public financing and technical assistance significant proportions of lowland irrigated to encourage the formation of agricultural rice land into alternative use, as Vietnam did clusters for such select contexts as aquaculture, successfully with aquaculture in the 1990s and specialty rice, and horticulture and floriculture; 2000s. Farmers could be given more land- strengthening animal health and pest use choices by further loosening restrictions surveillance services and enforcing regulations on the use of rice-land, improving irrigation governing the use of agro-chemicals and services, developing more flexible irrigation antibiotics; and integrating primary producers infrastructure suited to growing various crops, into the food safety program discussed in and supporting farmers in acquiring the new policy area #3. skills needed to cultivate high-value crops. • Enable (small) farms to achieve economies 5. Facilitating Business Links Between of scale and, thus, greater productivity and Household Enterprises and SMEs higher earnings. First, encourage the growth The household enterprise sector accounts for of Vietnam’s nascent land rental market at least 10 million jobs and is likely to grow as and consolidate titling to reduce land a result of urbanization and diversifying rural fragmentation, thus allowing for more efficient economies. A new study proposes that this sector use of inputs, including mechanization. can produce more and better jobs if their business Second, the government should facilitate practices can be improved and if they can establish joint production by small and medium- links to the SME sector. sized producers and strengthen cooperatives. Third, it will be important to use regulatory Household enterprise owners want to stay and market-based measures to increase the small and informal while enhancing their 25 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W earnings, but their circumstances make this and credit options to enable them to make difficult. These firms operate in an economic the necessary investments or upgrading to do bubble - purchasing inputs from other household business with SMEs. enterprises and selling directly to individuals • Further ease the process involved in registering (Figure 15). They have few links to the formal a business and communicate more clearly the private sector and almost none to the FDI sector. benefits of registering. Registering is desirable The top concern of household enterprise owners because “formal” household enterprises are is a lack of access to markets followed by limited more likely to have a business relationship financial cash flow that constrains their inability with the SME sector.74 Because small firm to invest in their businesses. The third most owners may not know the benefits of common obstacle mentioned was illness. Forty registration and the process involved in doing percent of household enterprise owners reported so, the government should consider launching that their business was negatively affected due to a market- and community-based information period of illness and that they spent 41 percent of campaigns and registration platforms. their profits on health expenditures, thus cutting • Provide extension services to promising into business investment.73 household enterprises. As with all business in Vietnam, increasing managerial competence The most effective way to enhance the earnings raises productivity, but it can be difficult for of household enterprises is to foster their links to household enterprise owners to take time the SME sector. Just as SMEs need to be linked to away from their businesses to upgrade their MNCs, household enterprises can provide inputs managerial skills. An alternative may be to to SMEs. encourage the development of extension-type • Facilitate information flows to household services that operate in zones where household enterprises. Policymakers need to provide enterprises sell their wares. household enterprises with information on: • Encourage development and adoption of industry standards and how to meet them in technology to link household enterprises with key sectors that serve local markets; the quality the larger economy. Approximately 70% of and timeliness of delivery required by SMEs; Vietnamese consumers have a smartphone, the cost of 4G is low in Viet Nam, and QR codes (quick response codes; the FIGURE 15: Source of products purchased digital version of a barcode) are becoming by and destination of sales by unregistered increasingly popular. China demonstrates the household enterprises, as % of total value power of technology for small producers, as many street vendors leapfrogged into mobile Origin of products purchased economy using Alibaba or Tencent platforms for their business. Reform Area III: Connecting Qualified Workers to the Right Jobs Destination of sales Workers do not have the skills for today’s or tomorrow’s jobs and a myriad of factors further limit their acquisition of and success in those jobs. While Vietnam’s youth are globally recognized for secondary school test scores that rival those public sector private enterprises abroad/FDI of European students, most of Vietnam’s labor other household enterprises individuals force has, at best, secondary school and limited Source: adapted from Pasquier et al 2017. skills. Today’s skills shortages will be exacerbated as mega-trends begin to affect the jobs pictures. 26 A R O A D M A P F O R F U T U R E J O B S : M O V I N G B E YO N D T H E S TAT U S Q U O Even workers with the right skills do not of a secondary school graduate.76 But 70 percent necessarily find jobs aligned with their skills or of Vietnamese workers have less than an upper interests. This may be due to poor information secondary education.77 Many hiring employers say about job openings, poor information about that job applicants lack the skills needed for even worker quality, time constraints that limit job the most low-skilled jobs.78 options, income constraints that prevent moving to more appropriate jobs, or a range of other Workers in the 21st century need a more issues. Three policy areas are presented. complex set of skills than they did in the past. Today’s employers are looking for job-specific 6. Building Worker Skills for Today’s and technical skills but also for socio-behavioral skills Tomorrow’s Jobs through Radical Reforms that typically have not been taught by education to the Education and Training Systems and training institutions such as problem- The low average skill level of Vietnam’s workforce solving, oral (and written) communications, may already be impeding Vietnam’s transition to ability to work independently, and teamwork 21st century jobs. Moving up domestic, regional, skills (Figure 16). These skills are associated with and global value chains into service jobs will automation, knowledge economy, service sector, require skilled workers and managers, and these and the future of jobs and are prioritized by are currently in short supply in Vietnam. Also, employers worldwide.79 They are only beginning more productive workers will be needed to offset to be included in secondary school and tertiary the impending shrinking working age population. curricula but are still not standard, and older A 2015 survey of Vietnamese firms found that workers may have had to acquire these skills on more than 20 percent of firms believed that the job, if at all. the “education level” of the labor force was an obstacle to their firm’s operations, more than three times higher than the percentage in comparable countries in the region.75 FIGURE 16: Share of employers identifying each skill as important for their workplace There are three main issues with the current Job-speci c technical skills skills distribution in Vietnam. First, many older workers who did not benefit from Vietnam’s Leadership quality secondary education system will be in Problem solving the jobs market for many years to come. Second, Creative and there is a flow of new workers, who will be in the critical thinking labor force at least until the year 2065 and will Communication need to prepare both for today’s jobs and for Ability to work independently future jobs that are as yet undefined. Third, the Teamwork kind of jobs available in Vietnam will be changing quickly as the economy transitions toward a Numeracy flexible and knowledge-oriented economy and Foreign language the skills needed by the labor market will also change accordingly. Literacy Time management Vietnam has been successful in creating a quality 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 primary and secondary education system that Index of the importance of skills (0-4) has benefitted its newest generation but not the Blue-collar workers White-collar workers rest of the workforce. The rates of return to post- secondary training and university are 20 percent Source: Bodewig and Badiani-Magnusson (2014). and 60 percent respectively, higher than those 27 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W Digital literacy is increasingly important in which are the skills needed by the employers the labor market, but it is not systematically of today and tomorrow. This will require taught. In addition to the human skills (socio- expanding the coverage of education to ensure behavioral) and higher-order cognitive skills that every Vietnamese person completes needed to function in a modern workplace, at least a secondary school education and workers will increasingly need to be able to use acquires the necessary cognitive and socio- and interact with technology. This could be as behavioral skills to enter the 21st century simple as being able to search information on job market. Vietnam has already begun to the internet, fill in a spreadsheet, or use an app. introduce these skills into the curriculum, However, digital literacy is also not systematically and it will be important to monitor and fine- taught in Vietnamese schools. Programming, tune this initiative where necessary.84 Digital on the other hand, will only be necessary for a literacy also needs to become a core part of the small number of jobs to fill growing knowledge- education curriculum since it will be required intensive service sectors. for even the simplest jobs in the future. • Foster the development of lifelong learning Employers in Vietnam identify managerial skills opportunities. Workers are going to have to as the hardest skill to find.80 The 2014 World be able to upgrade their skills and continue Management Survey ranked Vietnam 24th out to learn over their lifetimes as the nature of of 37 countries in terms of its managerial skills.81 jobs changes in response to mega-trends. This has broad implications for the economy and Therefore, policymakers will need to foster employment since better managers enable firms the development of lifelong learning and and farms to absorb new technologies, adopt new retraining opportunities including on-the- processes, efficiently use inputs (including natural job training, short training courses in VET resources), and integrate into new markets. They institutions and online, and self-guided adult also are more willing to invest in workforce training. Special emphasis will need to be put training. This is a crucial investment so that firms on technical skills, which are still the primary have the capacity to take advantage of the reforms skill sought by employers. Also, business proposed in the first reform area above. associations could provide “managerial extension ser vices” to enable current At present, the training sector in Vietnam managers to upgrade their skills.85 defines the skills that it will teach, but what is • Transition from education and training services taught is not based on any information from to a skills development system. Providing a employers or the labor market. The vocational range of skill development opportunities to a education and training (VET) sector has its own broad population will involve many different instructors, many of whom have not worked actors and will change the role played by the in industry, and there are few opportunities to education and training sector. Policymakers upgrade their skills. While 20 percent of firms should first develop incentives to persuade provide their own training82 and a large share employers to become providers of, advisors to, of workers report that they learn something and advocates for the skill development system. new on the job daily, 83 firm-based training They should also grant VET institutions and remains largely disconnected from the education universities autonomy to design and provide and training sectors. Therefore, several policy their own skills development courses, leaving reforms are needed: MOET and MOLISA to focus on carrying out • Expand the current curriculum to include the monitoring and evaluation, giving feedback broad range of skills demanded by employers. to providers, and conducting results-based The education system needs to teach higher- quality assurance. order cognitive skills (including management), • Develop and invest in a comprehensive long- digital literacy, and socio-emotional skills, term human capital development strategy for 28 A R O A D M A P F O R F U T U R E J O B S : M O V I N G B E YO N D T H E S TAT U S Q U O a diverse jobs market. If Vietnam is to become to find jobs via the internet. However, even person- a knowledge economy and capitalize on the to-person job search services such as recruitment opportunities offered by the mega-trends, it will firms, education institution-based services, and need a flexible skills development system that public employment services are used infrequently. can quickly respond to changing skills needs Older workers depend more on publicly provided as the jobs market evolves. Vietnam is already services than do younger workers, but this still developing a Higher Education Strategy, which accounts for less than 10 percent of job searches by should be expanded to encompass vocational workers aged between 45 and 65 years old. education and training to ensure that the higher education and VET systems reinforce each other and, collectively, produce the skills FIGURE 17: job search methodologies, that the labor force needs. This strategy will by age also need to define the responsibilities and 100 roles of the enterprise sector with regard to 90 80 human capital development. 70 60 Percent 7. Generating and Providing 50 the Information Needed to Place 40 30 the Right Workers into the Right Jobs 20 People change jobs in Vietnam. About 27 percent 10 of Vietnam’s (age 15 to 64) working age population 0 15-29 30-44 45-65 (15 to 64 years old) changed job type, firm type, Age group Total Other Media/Internet or occupation between 2012 and 2014.86 Young Job after training/ Social network people (aged 16 to 24) tend to move jobs at a internship with employer (friends/relatives/other) Started own business University/school career service higher than average rate - 36 percent in the same Contacted employer directly Private employment agency two-year period. 87 These movements happen Employer contacted me Public employment agency despite the high cost to workers of changing jobs, estimated at 3.1 times the average annual wage. Source: Bodewig and Badiani-Magnusson (2014) Job-seekers often do not have adequate information about the skills needed for the jobs Two policy reforms can be addressed immediately for which they are applying. Little information to provide more useful job search information is available to job-seekers about vacancies, to current job seekers and to prepare for future leaving them ill-equipped to conduct an effective developments. Technology, via internet-based jobs search or to decide what training to pursue information and social media, can play a to improve their chances. Also, job seekers have prominent role: many misperceptions about what to expect from • Create a Labor Market Information System the job for which they are applying; more than (LMIS) to collect and provide information 40 percent of hiring employers say that the wage relevant to workers, students, parents, education or work conditions offered are not acceptable to and training institutes, enterprises, labor job candidates.88 exchanges, career counselors, and policymakers. The system should be built on high-quality More than half of job search is through informal data collected by General Statistics Office means- friends or family – with limited use of (GSO), acquired through big-data sources, broader information sources. Internet-based job scraped from on-line job postings and social search sites are starting to emerge but only 2 to 3 media; and analyzed by MOLISA. These data percent of job seekers use these sites (Figure 17). will likely need to be supplemented by data Not surprisingly, young people are the most likely collected in regular special surveys aimed at 29 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W identifying labor demand. Most importantly, difficulty finding jobs due to their obsolete skills, a the LMIS will need to use the data to produce shifting labor market, employer discrimination, or and disseminate information that is designed the need to care for their grandchildren. for and targeted to the needs of different users. • Develop an integrated job vacancy system. The cost of job-upgrading may trap people in Vietnam’s existing Employment Support sub-optimal jobs. The high cost of labor mobility Centers (ESCs) have limited vacancy hinders people from transitioning into more information to provide and few job-seekers lucrative jobs or taking time out of work to upgrade use the centers. Privately funded online job- their skills. Labor mobility is costly, equaling about boards provide similar information, but the three times the average annual wage in direct costs, public and private systems are overlapping and lost earnings, and psychological stress. Similarly, incomplete. To strengthen Vietnam’s current upgrading skills requires workers to take time system, the government should develop a out of the labor force. The Labor Law imposes comprehensive strategy that identifies those significant costs on enterprises that dismiss segments of the jobs vacancy market that are workers in response to changes in technology, well served by private providers (search firms, production processes, or market demand. In fact, head-hunters, on-line jobs boards) and those Vietnam has one of the most generous severance that need to be publicly provided. It should also payment schemes in the world. This gives provide incentives to private sector firms to fill employers the incentive to hold on to jobs that may some of the gaps, for example, giving subsidies not be beneficial to the worker or the firm, just as to firms that employ individuals from hard-to- Vietnam is capitalizing on mega-trends that will place populations, and revamp the role of the disrupt the current structure of jobs. ESCs to provide the most difficult to employ populations with job counselling and referrals. Three policy reforms can address these constraints and get people back to work: 8. Providing Auxiliary Services to • Develop a comprehensive long-term care Facilitate Labor Force Participation and (LTC) system. Vietnam needs to follow other Labor Mobility countries with similar demographic profiles Factors that are not specific to the labor market in developing a comprehensive LTC system can prevent people from working. Demographics that provides a broad range of services may have several implications for workers. designed to support aging and disabled people. First, Vietnam’s tradition of aging household LTC services can be provided in the home, members being cared for by their family is no community, or institutions, they may be full longer sustainable with greater urbanization and time or for only a few hours a week, they may women working outside of the home. As the be paid or free, and they may cover everything dependency ratio increases, primary caregivers’ from basic social interaction to medical care. (women’s) options for employment may become To begin this process, Vietnam can learn from more limited. Second, the structure of Vietnam’s the range of models across the East Asia (and pension system gives workers an incentive to retire Europe) region. long before they are physically and mentally ready • Provide services and incentives to encourage to stop working. Those living in rural areas already people to work longer. Two policy changes work well into their later years, but urban workers could extend the working life of Vietnam’s are quicker to leave the workforce at the formal “young” aging. First, if health care is improved, retirement age, which is 55 for women and 60 for many people will be physically able to work for men. Thus, due to incentives introduced through longer. This will require the health system to public policies, some urban residents will spend provide more primary care services, shifting nearly half of their adult life not working. Third, care away from acute care hospitals, to improve even those who wish to continue to work may have coordination among health providers, and 30 A R O A D M A P F O R F U T U R E J O B S : M O V I N G B E YO N D T H E S TAT U S Q U O to strengthen the quality of the health care consider expanding unemployment insurance workforce. Second, the government might in order to facilitate job turnover and to consider providing incentives to encourage supplement workers’ incomes while they are people to stay engaged in the economy. retraining as well as providing learning grants Some solutions might include providing job to adult learners to smooth their incomes search services tailored to older workers, while they are not being paid. While ho khau giving vouchers to employers who hire older has been relaxed in law, its implementation workers, creating retraining schemes targeted will alleviate residency constraints and will to those whose education ended long ago, and enhance the skill level of the future labor increasing the retirement age, as has been done force, who may have been denied an education in most modern (and aging) countries. under ho khau. With these benefits, the • Facilitate labor mobility and skills upgrading. severance pay laws can be adjusted to global To help workers to adjust to the shifting norms, thereby reducing the disincentive to demands of the market, the government could firms to hold on to obsolete jobs. 31 CONCLUSIONS AND INSTITUTIONAL FACTORS FOR DEVELOPING A DELIBERATE JOBS STRATEGY Vietnam’s people are working, the economy is 5. Facilitate business links between household booming by global standards, and the population enterprises and SMEs. is the most prosperous that it has ever been. 6. Build worker skills for today’s and tomorrow’s However, this success may be tenuous in the face jobs through radical reforms to the education of automation, shifting trade and consumption and training systems. patterns, an aging population, and a labor force 7. Provide the information needed to place the that is not prepared for the jobs of the future. right workers into the right jobs. Vietnam’s ambitions to achieve middle-income 8. Provide auxiliary services to facilitate labor status by 2035 will require more than maintaining force participation and labor mobility. the status quo with marginal adjustments - it will require some radical changes. Improving the jobs This strategy has the potential to yield better available to the Vietnamese population, whether jobs for everybody. It will not only increase the through the upgrading of current jobs or the quantity of jobs in better-paid domestic and creation of new well-paid, high-productivity jobs foreign firms and raise productivity in traditional with good work conditions, will need more than family farming and household enterprises just strong economic growth and a conducive but will also bring into the workplace those investment climate. who are currently disadvantaged in the labor market – young people entering the workforce, A jobs strategy is not a single set of sectoral women, older workers who are not ready to stop policies; instead it involves multiple actors and working, and rural households. And by providing sectors on the job creation side (enterprises) supplemental support, it will also encompass those and labor supply side (workers) as well as who are currently left behind, including older public policies to bring the two sides together. workers and ethnic minorities. Thus, this report proposes a broad set of policy directions that can be expected to lead to more The strategy will involve various trade-offs in good and inclusive jobs both in the short run (the different aspects of the jobs picture. continuation of the current context, until 2020) • By timeline. Perhaps the biggest choice is and in the medium run (when global mega-trends whether to focus on improving jobs in the cause product markets to change, by 2035 and context of today or to focus on creating jobs beyond). We propose that policymakers should: for the future. These two strategies are not 1. Lower the barriers to growth of domestic mutually exclusive as strengthening today’s small and medium enterprises. jobs would mean that tomorrow’s workers 2. Encourage enterprises to move into would be better able to take on the new knowledge-intensive segments in regional challenges. For example, a more professional and global value chains. and productive household enterprise sector 3. Facilitate the development of Vietnam’s agro- would be ready to be integrated into future food system. domestic value chains. What is needed is to 4. Encourage the agricultural sector to diversify find a balance between investing in the jobs of into high value-added crops. today and those of tomorrow. 32 A R O A D M A P F O R F U T U R E J O B S : M O V I N G B E YO N D T H E S TAT U S Q U O • By labor market perspective. By definition, deciding who will receive preferential policy higher productivity – a desirable outcome treatment. Should public resources be spent from a firm’s point of view – should occur to strengthen the education system to educate by reducing the number of workers – a bad the young or to provide short VET courses outcome from the worker’s point of view. and adult learning to educate older workers? However, currently in Vietnam productivity Should priority be given to teaching the enhancements, particularly in domestic firms, Vietnamese language to ethnic minorities so are crowding in jobs rather than forcing firms they can access education and jobs or should to choose between productivity and jobs. The it be given to teaching 21st century skills to data suggest that this may not be the case once high achievers so they are qualified to work firms reach higher levels of productivity, but, in in modern firms? Should preference be given the short run, both sides of the market benefit. to guiding women towards a wider range of • By sector. For Vietnam to participate more career choices or to improving job search tools in domestic and international value chains, for the population at large? The answers are policymakers will need to support increased not clear, but policymakers could consider links between sectors, for example, tying the proceeding as follows. First, they could let the agriculture sector more tightly to manufac­ private sector provide the necessary services turing and services. Therefore, choosing such as long-term care services for the elderly between those three sectors would be a losing and higher education and training, while strategy, whereas balancing support among saving public resources for supervision and for all three would be more jobs friendly and filling any holes left by market failures. Second, economically justified. they could give firms incentives to take on • By type of firm. The preferential conditions tasks that would be costly for the government that SOEs and FDI enterprises have enjoyed to do, for example, giving them vouchers if in terms of access to land, credit, electricity, they hire older workers rather than spending and other inputs have been necessary to attract public money on retraining those workers. investment to Vietnam, particularly when the Third, taking less expensive public actions domestic sector was too immature to use these such as providing information or financial or inputs efficiently. However, the domestic sector other incentives – can be more cost-effective is now so strong that it is the main source of than full-scale government programs. contract wage labor in Vietnam and is creating jobs more rapidly than any other sectors. Perhaps the biggest challenge is to define the Therefore, it may be time to consider leveling exact actions that need to be taken and to the playing field and scaling back preferential turn these priority reform areas into reality. treatment for SOEs and FDI enterprises. The current jobs strategy - that better jobs • By region. The suggested jobs strategy will will emerge from solid economic and sectoral require making trade-offs between rural and development strategies – has had success. This urban areas. In particular, it will be necessary report argues that greater gains are possible for policymakers to decide either to encourage through a deliberate jobs strategy that focuses investment in secondary cities to build the on our eight policy reform areas. The report only manufacturing and services associated with proposed reform areas, not specific reforms. To agro-value chains or to invest in the country’s achieve the strategies proposed in this report, transport and logistics so these processes it will be necessary to (i) undertake a detailed can be done in urban areas as is largely the analysis of existing legislation and practices case today. within each policy area to identify successes, • By demographic group. The policy trade-offs gaps, and implementation failures, (ii) craft new are perhaps the starkest when it comes to legislation and new processes, together with 33 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W a system to monitor implementation and success, In summary, Vietnam’s jobs future is bright. The and (iii) intense political debate and negotiation country can continue on its current path, which to implement the specific policy reforms. will yield job increases, but these rewards will diminish as global trends erode some of Vietnam’s This process will only be successful if the jobs comparative advantage and certain groups fall reform agenda is led by a strong champion further behind. The government could reform on within government. Unlike sector-specific the margin in an effort to keep up with changing reforms, a successful jobs agenda requires the global trends, but this will become difficult as the engagement of a wide range of government and global economy becomes increasingly crowded by non-governmental actors. The leadership for new entrants. Or Vietnam could make some big this agenda needs to operate above the sectoral investments now – in its domestic firms, its labor ministerial level, in the form of a supra-ministerial force, regional and global trade networks, and even coordinating. It would champion the issue in integrating its own economy. These investments across government and across society; lead the would enable Vietnam to leap forward to higher development of a shared vision for better jobs, economic status and would yield better and more together with quantifiable targets for future jobs inclusive jobs for all its citizens regardless of age, and monitor progress toward them; engage and gender, or ethnicity. hold accountable a range of government and private sector actors; and lead the whole process toward a shared future jobs vision. 34 ANNEX 1: SUMMARY OF POLICY DIRECTIONS Policy Selected Policy Actions Long-term goal Reform (by 2035) areas Short-term Medium-term (within the current five-year plan) (in future five-year plans) Lower the Put together a task force to develop an Investments in logistics, finance, Job growth in barriers to action plan to level the playing field for marketing, and other professional domestic SMEs growth of private domestic firms vis-à-vis SOEs services to support manufacturing exceeds 5 percent per domestic and foreign firms. The plan should be expansion. decade, underpinned small and designed to build the political will to by strong links Establish structures to enable medium implement the necessary reforms to between a dynamic effective dialogue between large enterprises. make this happen. private sector and public sector firms and SMEs within MNCs. Give relevant information on quality specific sectors to link SMEs with Creating More Good Jobs in the Modern Sector standards to local suppliers with the larger firms, especially MNCs or potential to provide services or goods exporters. to MNCs. Also, expand the accreditation system on quality standards into key sectors with the potential to expand exports. Encouraging Streamline the regulatory environment Broaden the Law on High More and higher enterprises for logistics and upgrade domestic Technologies to encompass a value-added jobs in to move into infrastructure to foster the creation of broader range of knowledge- the exports sector knowledge- logistics services companies. intensive, exportable services. through doubling intensive services as a share Support linkages between exporting Lift all remaining formal restrictions segments in of total exports and firms and firms producing domestic on service trades such as foreign regional and shifting toward inputs. equity limitations and caps. global value commercial services chains export industries. Facilitating Upgrade food market infrastructure Provide incentives for the food Better paid and safer the (such as wholesale and urban wet industry to encourage them to invest jobs in agro-food development markets) through public or PPP in provincial cities that are closer to processing. of the agro- investments. the agricultural production base and food system areas with underemployment. Strengthen public food safety measures and support the adoption by private Support labeling, certifying, and companies of HAACP, traceability, other control systems that will make and other food system management it possible to rebrand Vietnamese processes. agriculture as a sustainable source of global and regional supply. Encouraging Adopt policies and programs to Support the development of a broad More well-paid the accelerate shifts in agricultural land use, range of private technical, advisory, and safer jobs in in Improving the Quality of Existing Jobs in the agricultural especially from mono-crop rice to mixed financial, and other demand-led primary agriculture sector to farming or high-value crop production. services for Vietnamese agriculture, and less seasonal diversify into including agro-entrepreneurship. variability in these job Strengthen existing cooperatives to high value- opportunities. realize economies of scale among small Support the professionalization added crops Traditional Sectors and medium-sized farms. of farmer cooperatives and their More entrepreneurial provision of a broader range of youths staying in commercial services. agriculture. Facilitating Provide SMEs with information on Open one-stop (virtual) shops Household business industry standards, quality standards, where household enterprises can enterprises that links and the importance of timely delivery as go for registration, information, and buy from and sell between well as credit options. technical assistance. to domestic SMEs, household thereby increasing Introduce market-based and Provide extension services to enterprises profits and reducing community-based information the most promising household and SMEs risk. campaigns and registration platforms. enterprises. Encourage development and adoption of technology to link household enterprises with the larger economy. 35 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W Policy Selected Policy Actions Long-term goal Reform (by 2035) areas Short-term Medium-term (within the current five-year plan) (in future five-year plans) Building Develop a plan with financial incentives Define a new role for MOET and A demand-driven, worker to encourage the private sector to MOLISA in overseeing M&E and flexible, market-based skills for provide, guide, and advocate for a more providing financial incentives to skills development today’s and appropriate skills development sector. the private sector to encourage the system. tomorrow’s delivery of demand-driven education Integrate a broader range of skills into jobs through and training services. the primary, secondary, and tertiary radical Connecting Qualified Workers to the Right Jobs curricula. Develop a system of continuous reforms learning through demand-driven to the short courses and skills upgrading education for adults. and training systems. Providing the Design, produce, and disseminate labor Design and implement a Labor Comprehensive and information market information tailored to different Market Information System (LMIS) widely accessible needed to users. for systematic data analysis and LMIS. place the managing dissemination platforms. Assess the current job search system, A private sector- right workers including the effectiveness of the Design a job search assistance driven job search into the right Employment Support Centers. strategy that includes private sector system that is widely jobs services supplemented by public accessible, with Employment Support Centers with public sector support an expanded remit to serve the targeted to excluded needs of vulnerable populations. groups. Providing Develop a plan for a long-term care Allocate financing to incentivize the Fewer barriers to auxiliary system for the aging population. creation of markets for long-term effective preparation services to care. for and integration Design and implement a voluntary facilitate into the labor market. component of the unemployment Finance individual learning and job labor force insurance program for workers without transfer accounts to facilitate labor participation contracts. mobility over a worker’s career. and mobility 36 REFERENCES Acemoglu, Darren and David Autor. 2010. “Skills, Cunningham, Wendy and Valeria Perotti Tasks, and Technologies: Implications for (forthcoming). “Skills Demand in Vietnam: Employment and Earnings.” NBER Working The View from Employers.” Paper #16082. Cunningham, Wendy, and Paula Villaseñor. 2016. Actionaid Vietnam. 2016. Making a house become “Employer Voices, Employer Demands, and a home. Policy Brief, ActionAid Vietnam. 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Washington, D.C.: International Bank for Reconstruction and Development/The World Bank. 39 FOOTNOTES 1 Doi Moi launched Vietnam’s move toward included since the depth of analysis that is a market-economy structure by removing required goes beyond the scope of this report. a multitude of distortions imposed under Namely, the report does not analyze specific central planning (multiple price controls, policies or implementation constraints production quotas, collectivized agriculture, underlying the eight policy areas that are trade and investment restrictions, and a ban defined in the report. Instead, it encourages on formal private enterprise). Most of these subsequent detailed work to assess the restrictions were lifted in the initial phases of adequacy of existing policies to make the Doi Moi, while systems were put in place by changes that are recommended in the report, the early 1990s that were more friendly to the identify the implementation shortfalls, and market and the private sector. develop an action plan. 2 World Bank and MPI (2016). 10 The Doi Moi strategy had four goals: 3 World Bank (2016). transitioning from a planned to a market economy, shifting from agrarian production 4 For example, national rice output more than to manufacturing and services, fostering doubled during this period. migration from rural to urban areas, and 5 OECD (2013), available at https://www.oecd. changing Vietnam from a closed to an org/pisa/keyfindings/PISA-2012-results- open export-driven and globally integrated snapshot-Volume-I-ENG.pdf economy (World Bank and MPI (2016)). 6 We are cautious not to claim that all small- 11 World Bank, World Development Indicators. scale jobs involve low productivity. For 12 Derived from analysis of 1989, 1999, and example, family-farmed horticulture 2000 Census and 2014 LFS data. and aquaculture have quite high labor productivity. Chapter 2 of the main report 13 World Development Indicators. Derived as discusses primary sector productivity in more GDP per worker, 2011 PPP. detail. 14 Merotto et al, (2016). 7 UN Women (2016). 15 Glewwe (2004). 8 As measured as FDI inflows as a percent of 16 Dollar and Litvak (1998). GDP in 2016; http://unctadstat.unctad.org/ 17 Dodsworth et al (1996). wds/TableViewer/tableView.aspx 18 Source: http://unctadstat.unctad.org/wds/ 9 Given time and space constraints, many TableViewer/tableView.aspx issues that are important to the jobs story were not included in the report. Some of 19 Although the share of workers employed in these issues, such as migration and brain SOEs declined, in 2014, SOEs still accounted drain or aging and social policy, are addressed for 35 percent of total output. in other publications (see Testaverde et al 20 McCraig and Pavcnik (2013). 2017 for migration and brain drain; O’Keefe 21 World Bank (2002), Minh et al (2010), and et al (2015) for aging). Other issues were not Malesky and Taussig (2009). 40 FOOTNOTES 22 World Development Indicators. The labor 41 Due to history and practice, several factors force participation rate was calculated as the limit the agricultural productivity of ethnic number of people age 15 and older who are minorities more than that of Kinh or Hoa. working or searching for work. For example, cropland owned by ethnic 23 When limiting the age range to the commonly minorities is largely unirrigated and low used working age population age range of 16 quality compared with that owned by Kinh to 65, Vietnam’s labor force participation rate and Hoa. Also, communal land-holding, is 83 percent, with 86 percent of men and 76 which used to be required by law in Vietnam, percent of women working or looking for aligns with some ethnic groups’ sense of work. collective ownership, making them unwilling to sell collective land. 24 Pasquier et al (2017). 42 Only 1 percent of urban residents are from 25 Source: Input-Output Matrix, GSO, 2012, ethnic minorities, even though they comprise World Bank and IPSARD (2016). 15 percent of the population nationally 26 Pasquier et al. (2017). (Demombynes and Vu, 2016) 27 Author’s calculations based on the 2014 and 43 World Bank and MPI (2016). 2015 LFS. 44 World Bank (2017). 28 Pasquier et al (2017); IPSARD and 45 Jamora and Labaste (2015). Demombynes and Testaverde (2017) for workers without a contract. 46 McKinsey Institute (2016). 29 World Bank and IPSARD (2016). 47 Source: UNCTAD. 30 World Bank and IPSARD (2016), Pasquier et 48 For example, the boom in exports to the al (2017), Cunningham and Huertas (2016). United States following the US-Vietnam Bilateral Trade Agreement of 2001 raised 31 Pasquier et al (2017). the wages of unskilled workers, reduced 32 Van Nguyen (2017). the skill premium, and was a key driver of 33 UN Women (2016). poverty reduction in Vietnam because it was concentrated in the unskilled, labor-intensive 34 Action Aid (2016). manufacturing sectors, most notably textiles 35 Pasquier et al (2017). (Fukase, 2013 and McCaig, 2011). 36 Demombynes and Testaverde (2017). 49 Hallward-Driemeir and Nayyar (2017). 37 ILO (2016). 50 Acemoglu and Autor (2010), World Bank 38 Perova et al (2017). (2016). 39 U N Wome n ( 2 0 1 6 ) and D u ng and 51 Author’s calculations based on the 2011 and Demombynes (2014). 2014 Labor Force Surveys. 40 In some cases, it may be less of an issue of 52 Demombynes and Testaverde (2016). access to education and more the lack of an 53 These estimates were derived from a logistic opportunity to use the acquired skills. A study estimation strategy using labor and skills data exploring poverty in the Central Highlands from the Vietnam STEP survey. See Kahn reported that vocational school graduates (2018) for details. from ethnic minorities were less likely than 54 Merotto et al. (2016). Hoa or Kinh graduates to benefit from this training because they are hesitant to migrate 55 http://dantri.com.vn/viec-lam/sau-20-nam- away from their ancestral areas to take up chi-con-9-nguoi-dong-bhxh-cho-1-nguoi- employment in their field of study. huong-luong-huu-20161017121058517.htm 41 V I E T N A M ’ S F U T U R E J O B S : L E V E R A G I N G M E G A - T R E N D S F O R G R E AT E R P R O S P E R I T Y – O V E R V I E W 56 In the US, also an aging economy, there is a competition can be expected (such as other notable trend that men are reluctant to join animal products); and (iii) the technologies “pink collar” jobs. Even unemployed men used and labor-intensity of production as would prefer to hold out for non-care jobs the industry grows and modernizes. These than to join nursing or other care professions issues need to be studied further as well as the (https://www.nytimes.com/2017/01/04/ growth (and employment) prospects for other upshot/why-men-dont-want-the-jobs-done- agro-industrial sectors (such as furniture and mostly-by-women.html?_r=0). other wood products and leather). 57 The correlations were estimated using 68 IPSARD estimates based on VHLSS 2014 and regression analysis. See Chapter 3 of the main GOS data on land use. report for details. 69 IPSARD’s estimate based on VHLSS 2014 and 58 https://tuoitre.vn/uu-dai-tren-35-300- GOS data on land use. ti-thue-thu-nhap-cho-doanh-nghiep- 70 Calculated from the 2008, 2010, and 2012 ngoai-20171120093626404.htm VARHS. 59 World Bank (2011). 71 In fact, households that specialize their 60 Doing Business, available at http://www. production have higher value-added per doingbusiness.org/data/exploreeconomies/ hectare worked than those who produce vietnam. multiple types of crops. 61 Hollweg (2017a). 72 See World Bank and IPSARD (2016). 62 For example, estimates suggest that software 73 Pasquier et al (2017). exports in Vietnam grew on average by 45 74 Pasquier et al (2017). percent between 2005 and 2010 to reach US$432 million. 75 Cunningham and Perotti (forthcoming). 63 Molinuevo (2017). 76 Demombynes and Testaverde (2016). 64 In contrast, many of Vietnam’s export 77 Vietnam Jobs Diagnostic (forthcoming). manufacturing sub-sectors feature significant 78 Bodewig and Badiani-Magnusson (2014). imports of raw materials or product 79 Cunningham and Villaseñor (2016). components and involve limited backward links into the economy. 80 Compared to other skillsets like IT, non-IT, writing, and interpersonal skills. 65 Although urban households also hold a range Cunningham and Perotti (forthcoming). of jobs, it is far less mixed, with 62 percent deriving income from wage employment and 81 http://worldmanagementsurvey.org 21 from household enterprise income (the 82 Cunningham and Perotti (forthcoming). third source of income is remittances). 83 Bodewig and Badiani-Magnusson (2014). 66 Derived from the 2008, 2010, and 2012 84 Guerra et al (2014) and Cunningham et al VARHS. (2016). 67 Several factors will contribute to this, 85 Cirera and Maloney (2017). including: (i) the trajectory of domestic demand for different food and beverage 86 Cunningham and Pimhidzai (forthcoming). p r o d u c t l i n e s ; ( i i ) t h e c o nt i nu e d 87 Cunningham and Pimhidzai (forthcoming). competitiveness of Vietnamese industry, both 88 Bodewig and Badiani-Magnusson (2014). for its exports (such as aquatic products) and products for which increased import 89 Kuddo (2017). 42 HONG DUC PUBLISHING HOUSE Vietnam Laywers Association Hong Duc Publishing House • Address: 65 Trang Thi Street, Hoan Kiem District, Hanoi • Email: nhaxuatbanhongduc@yahoo.com • Tel: (84 24) 3 9260024 – Fax: (84 24) 3 9260031 Publishing responsible: Bui Viet Bac, Director Content responsible: Khuat Duy Kim Hai Editor: Khuat Duy Kim Hai Cover Designer: Hong Duc Publishing House Print 200 copies in English, size 20.5cm x 28.5cm at INSAVINA Address: 22B Hai Ba Trung, Hoan Kiem, Hanoi Publishing permit: 288/QĐ-NXBHĐ Publishing registration plan: 686 - 2018/CXBIPH/08 - 11/HĐ ISBN: 978-604-89-2981-7 Compeleted and archived in 2018