Vietnam cannot continue down low-cost labor path: PM

By Dat Nguyen   May 6, 2019 | 11:36 am GMT+7
Vietnam cannot continue down low-cost labor path: PM
Female employees work in a garment factory near Hanoi, Vietnam. Photo by Shutterstock/Jimmy Tran

Vietnam cannot continue to rely on low-cost labor since it faces increasing competition due to global integration, Prime Minister Nguyen Xuan Phuc says.

Speaking at a forum Sunday he said: "If we continue to go down the traditional low-cost labor path, we will fail. Innovation in technology to improve labor quality will be the decisive factor in the country’s development."

Businesses need to offer skilled workers attractive wages and benefits since they are the leaders in the use of technology, he added.

Minister of Labor, Invalids and Social Affairs Dao Ngoc Dung said his ministry is working to improve training for workers using curriculums from Australia and Germany so that they can get internationally recognized certificates.

Nguyen Duc Thanh, director of the Vietnam Institute for Economic and Policy Research (VEPR), said recently that labor productivity only tripled between 1991 and 2015.

With Vietnam climbing on the Industry 4.0 bandwagon, experts have warned that its low-skilled workforce could be threatened by artificial intelligence.

Vietnam’s labor productivity is among the lowest in Southeast Asia. The General Statistics Office said it is only 1/18th of Singapore’s rate, 1/16th of Malaysia’s and 1/3 of Thailand and China’s.

 
 
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