Ho Chi Minh City to spend over $100 million raising public sector pay in 2018

By Tuyet Nguyen   February 28, 2018 | 01:30 am PT
Ho Chi Minh City to spend over $100 million raising public sector pay in 2018
Residents perform paperwork at a public office in Ho Chi Minh City. Photo by VnExpress/Tuyet Nguyen
The megacity plans to use its new autonomy to raise civil servants' incomes over the next three years.

Ho Chi Minh City has announced plans to spend VND2.34 trillion ($102.9 million) this year on pay rises for civil servants, a move enabled by its new-found autonomy.

The city said on Wednesday that it would raise payment in the public sector by an average of $730 per person in 2018. It also has plans for further wage increases over the next two years. Vietnam's average income was $2,380 in 2017.

The pay rise will boost public workers’ dedication and reduce bureaucracy, city chairman Nguyen Thanh Phong said at a Lunar New Year meeting earlier this month.

HCMC employs 140,200 public workers, and their salaries take up 35-40 percent of the income public offices generate.

Public workers' monthly payments are calculated by multiplying the basic wage of VND1.3 million ($57) with a coefficient determined by qualifications and experience. The basic rate will be raised by 7 percent this year in an attempt to reduce corruption in the sector.

But HCMC says it wants to pay its workers more than that, saying they are 1.5 times more productive than colleagues elsewhere.

The city of 13 million people is Vietnam’s biggest money-maker, earning more than VND345 trillion ($15.17 billion) last year, up 13 percent from 2016, according to its finance department.

Last November, Vietnamese legislators agreed to give the city more decision-making power so it could continue leading the development race.

The new power allows the city to set salaries for industry experts and scientists, and raise salaries in the public sector as it sees fit.

The decision also gives it authority over land management, investment and the use of its budget, matters that normally require approval from the prime minister.

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