Workers' productivity key to socioeconomic growth: experts

Although government policies such as revising growth models, innovation of science and technology, have helped develop labour productivity, the implementation of such policies are slow due to lack of participation from businesses.

The 2023 Việt Nam Socio-Economic Forum started on Tuesday in Hà Nội on a positive note, with delegates actively contributing to a brighter outlook for the country.

Themed "Reinforcing internal capacity, generating drivers for growth and sustainable development", the event gathered more than 400 delegates for physical discussions at the National Conference Hall and connected online with domestic and international academies, universities, speakers, and scientists.

The Economic Committee of the National Assembly, the Party Central Economic Committee, Hồ Chí Minh National Academy of Politics, and Việt Nam Academy of Social Sciences are co-organisers of the forum.

In his opening address, Vương Đình Huệ, Chairman of the National Assembly, pushed for greater inner strength of Việt Nam to counter uncertainty and risks.

"In the first half of the National Assembly's term, Việt Nam has persevered through challenges and achieved many important and comprehensive results," said Huệ.

"However, we are faced with challenges in the economy. The GDP growth rate for H1 2023 is only 3.72 per cent, one of the lowest rates in 12 years. Many main growth drivers are slowing down," Huệ added.

According to Huệ, the pandemic has shown that developing Việt Nam's inner strengths and contributing to growth drivers is crucial and necessary for ensuring continuity, stability, and sustainability.

Huệ urged delegates at the event to address three key problems. First, provide forecasts for the Vietnamese economy in 2023, 2024 and beyond; second, identify facts, threats, and risks in the current socio-economic landscape; and third, find solutions to tackle problems and enhance inner strength, thereby enabling future growth and development.

Nguyễn Xuân Thắng, Director of the Hồ Chí Minh National Academy of Politics, echoed this sentiment.

"Việt Nam's economy has weathered some of the toughest times but still faces significant challenges," said Thắng.

"We need measures to counter these challenges and enable a successful comeback for the economy."

Thắng implored delegates of the forum to devise practical, breakthrough measures to restore the economy's momentum by addressing three challenges: revitalising domestic consumption, rejuvenating the flow of investment capital, and troubleshooting issues hindering businesses.

Policies key to unlock productivity growth

In the second discussion of the forum, titled "Improving labour productivity, guaranteeing labour productivity in the new context", both foreign and domestic delegates contributed extensively to the debate.

According to Felix Weidencaff from the International Labour Organization (ILO), the long-term decline in labour productivity is a worldwide trend that has created policy challenges.

A shift in global macroeconomics is also to blame, said Weidencaff, specifically factors like inflation, geopolitical crises, and energy prices.

The ILO representative advised Việt Nam to develop and increase jobs to meet the demands of the knowledge economy and the 4.0 industrial revolution. Việt Nam should also address the nature of unemployment and establish an effective labour market information system.

In discussing social policy credit, Nguyễn Đức Hải, Deputy Chairman of the Việt Nam Bank for Social Policies (VBSP), stated that social policy credit has played a significant role in reducing poverty by providing exclusive credit avenues for underprivileged groups.

These funds have aided over 6.4 million households in crossing the poverty threshold, created 6.5 million jobs, and facilitated education access for 3.9 million students.

According to Hải, although the programme has achieved remarkable results, challenges remain. The VBSP has requested the government's assistance for future funding to comprehensively address these issues.

Skilled employees wanted

In the roundtable discussion, Nguyễn Lê Hoa, Director of the Department for Productivity Research at the Việt Nam Productivity Institute (VNPI), identified two reasons for Việt Nam's low labour productivity.

Firstly, the country lacks employees with substantial experience and skills; and secondly, while the private sector is significant, most companies are small in size, making it challenging to enhance productivity.

Hoa noted that while government policies, such as revising growth models and fostering innovation in science and technology, have facilitated the development of labour productivity, the execution of such policies has been sluggish due to limited engagement from businesses.

Hoa advocated for better promotion of these policies and emphasised the importance of inter-departmental and inter-ministerial coordination to formulate synchronised policies. This would enable private enterprises to actively contribute to boosting labour productivity.

Jonathan Pincus, an expert from UNDP Việt Nam, remarked that Thailand and Malaysia had previously experienced rapid labour productivity growth, but couldn't maintain it following the Asian Financial Crisis in 1997. Pincus attributed this decline to the countries' outdated development policies that eventually led them into the middle-income trap.

To avert a similar trajectory, Pincus asserted that Việt Nam must succeed in constructing a robust national innovation system. The UNDP expert also encouraged Việt Nam to prioritise post-graduate education, especially in STEM subjects.