Vietnam at the Crossroad: Adapt or Die?

Diep Nguyen

11:01 26/03/2019

BizLIVE -

“What has been working in the past 30 years may not necessarily work in the future,” said Ousmane Dione, the World Bank director in Vietnam.

Vietnam at the Crossroad: Adapt or Die?

Photo: Reuters

Nguyen Thi Nam, 43 years old, comes from a small district in Hung Yen province nearby Hanoi. Currently, she earns about 30 to 40USD by selling imported and domestic fruits along Hanoi streets. She also has another job of selling her labor at the daily labor market in Long Bien market. She can carry heavy items to get payment from the retailers in this market. 
She has been doing like this for about 8 years. Before that she used to work for a factory in Hung Yen province for many years. But when she got 35, company owners told her to leave because she could not meet their requirements. 
Having been away from farming for many years and at that time there was not much farming land left, going to Hanoi to work two part time jobs is her certain choice. Her current jobs earn her good income and help her to raise her children, but she enjoys no insurance and has to face to the uncertain future.
It is easy to see the story of Nam in millions of other cases of people leaving the factories and farms to work in the cities all through Vietnam. They share similar stories: Vietnam economy has developed a lot in the past several decades, urban lives have improved accordingly, but at the same time, lives of people like Nam has not changed much. This arises one question: What those people gain from the FDI surge?
“What has been working in the past 30 years may not necessarily work in the future,” said Ousmane Dione, the World Bank director in Vietnam. “The impacts of initial institutional and structural reforms seem to have reached their limit.”
The Doi Moi reforms in Vietnam have been carried out for more than 3 decades, Vietnam introduced more and more of market economy traits into Vietnam’s system. The economy in Vietnam has changed dramatically.
From the basic production chains about 20 years ago, Vietnam economy is developing into more and more service oriented orientation and high tech industries. Vietnam is making strikes into producing more value-added products, not just basic materials like before. But in this process, the laborers like Nam are left out. 
Many economists say that it is now time for Vietnam to change the economy and seriously think about upgrading labor skills. Otherwise, there will be more and more poor people with low skills are marginalized in the process of economic development.
For example, Vietnamese factory hands are accustomed to assembling phones and cars, but could they one day move up the value chain, such as by providing tech support to people who buy these products?
On the technology side, Vietnam could do more to collaborate with the rest of Southeast Asia, according to Pham Hong Hai, CEO of HSBC Vietnam. That may range from ensuring electronic payments go off without a hitch across borders, to cooperating on a response to cyber threats, he said.

DIEP NGUYEN

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