Vietnam plans wage raise for public sector after corruption linked to income

By Nguyen Hoai   October 17, 2016 | 02:14 am PT
Vietnam plans wage raise for public sector after corruption linked to income
Salaries in the public sector currently only meet 60 percent of basic life demands. Photo by Reuters/Kham
The proposal came shortly after economists said meager salaries limit the quality of public service and fuel corruption.

Vietnamese civil servants and public employees, including teachers and doctors, may be receiving higher pay soon as the government has announced a plan to raise the basic wage for the sector by 7.4 percent next year.

On Monday, the government submitted its proposal to legislators, seeking to raise the wage level from the current VND1.21 million ($54) a month to VND1.3 million ($58).

In Vietnam, the minimum monthly pay for civil servants and public employees is calculated by multiplying that basic level with a coefficient determined by qualifications and experience.

The coefficient for a new subdistrict-level civil servant with a bachelor’s degree, for example, is 2.34.

Many in the public sector have for years complained that their earnings are too low. In May this year, the public sector's minimum wage was increased by 5 percent, the first time in three years.

The new proposal came only days after economists said at a recent conference that low wages can increase the level of corruption.

They said the current wages for many officials only cover 60 percent of basic living costs at best, but most have stopped depending on the official salaries and still manage to afford nice houses and cars anyway.

Despite the poor official income, the public sector has proven an attractive place that not just anyone can enter.

Vietnam’s most recent Governance and Public Administration Performance Index has confirmed that personal relationships and informal payments "still play an important role for those who wish to pursue public sector careers".

The index, considered the largest national governance and public administration performance monitoring tool in Vietnam and surveying nearly 75,000 citizens annually since 2009, has found that “nepotism and corruption in public sector employment have become a systemic problem.”

Previously similar surveys found many people in the country had to pay bribes to facilitate business activities, for land use right certificates, hospital and public education services.

Vietnam ranked 112th out of 168 countries in the Corruption Perceptions Index in 2015.

Nguyen Duc Hai, chairman of the parliamentary Finance and Budget Committee, said the newly proposed pay raise is reasonable considering higher costs of living.

But Hai said the government also needs to scale down the workforce to reduce the pressure on the state budget.

The government is having 2.8 million people on its payroll, according to local media.

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