Vietnam commercial hub uses autonomy to hike public sector salaries

By Thien Ngon    November 11, 2018 | 06:38 pm PT
Vietnam commercial hub uses autonomy to hike public sector salaries
Residents perform land registration paperwork at a public office in Ho Chi Minh City. Photo by VnExpress/Thanh Nguyen
Ho Chi Minh City raised wages for government workers in April based on performance and more hikes are on the cards in future.

Vietnam’s commercial hub would have to spend VND3.2 trillion ($137 million) this year on the raise, Phan Thi Thang, director of the Department of Finance, said at a meeting Friday.

The hike is for those employees who have completed their tasks well enough. Their wages will rise by 0.6 times this year, 1.2 times next year and 1.8 times in 2020.

The performance of each will be evaluated by themselves, their colleagues and finally their superior to see if they qualify for the raise.

Salaries are calculated by multiplying a basic wage of VND1.3 million ($57) with a coefficient determined by qualification and experience. The basic rate will also be raised by 7 percent this year as part of efforts to tackle corruption.

Vietnam's average income last year was $2,380.

HCMC, home to 13 million people, is the biggest source of revenue for the country, with 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 Ho Chi Minh City more administrative autonomy so that it could continue leading the development race.

This allows the city to fix salaries for industry experts and scientists, and raise salaries in the public sector as it sees fit.

The decision also gives it greater powers in land management, investment and the use of its finances, which normally require approval from the government.

Nguyen Thien Nhan, Secretary of the HCMC Party unit, said the city has a large population and each government worker has to serve up to 700 residents compared to the national average of 350.

"Raising salary is a way to boost public workers' productivity, allowing them to serve local residents and businesses better," he told the meeting.

Le Thanh Liem, Vice Chairman of the city People's Committee, said official data for 2013-17 showed that public workers in the city are 1.5 times more productive than their counterparts elsewhere and it is not fair for them to be paid the same.

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