VietNamNet Bridge – Vietnam has made important achievements in the labor and employment area but many issues remain to be solved. Gyorgy Sziraczki, country director of the International Labor Organization (ILO) in Vietnam, spoke over those issues before he left Vietnam.

What are the major labor and employment achievements Vietnam has made since 2012 when you took up the post of ILO country director here?

Over the past few years Vietnam has made important achievements.

First, the framework for labor market governance has been strengthened to help Vietnam in a transition period towards a market economy and as a new middle-income country. Important laws include the 2012 Labor Code, Employment Law, amended Social Insurance Law, Law on Technical Education and Vocational Training, and most recently the Law on Occupational Safety and Health got the greenlight from the National Assembly.

Gyorgy Sziraczki

Vietnam has also ratified three international labor conventions since 2012, namely the Employment Policy Convention (Convention 122), Maritime Labor Convention (MLC 2006) and Promotional Framework for Occupational Safety and Health Convention (Convention 187). This shows a good sign of the country’s gradually aligning with international standards in the area of labor and employment.

Besides, evidence-based and informed discussions have become more of a “habit” in Vietnam. The Government has put more efforts on statistical work, for instance, the regular production of Labor Force Survey or the first-ever Child Labor Survey. These are critical in designing and monitoring policies.

And the final major achievement has been experimental work and learning from pilot programs on the ground. Better work has been a good example in showcasing the improved compliance with labor laws while enhancing productivity and competitiveness in the apparel industry. Meanwhile, industrial relations pilot programs have helped strengthen the voice and representation of key players in the labor market and dialogues at some enterprises and local level on key issues such as working conditions and wages.

Could you point out the major challenges the country is facing?

Despite remarkable achievements, some major challenges still remain.

The first one I could mention is the weak policy coherence. More and effective collaboration is needed across ministries to foster a conductive environment for the growth of businesses and the creation of more and better jobs. For example, the Ministry of Labor, Invalids and Social Affairs plays a key role in shaping labor market governance but macro-economic policies have a more decisive impact on labor demand. Inter-ministerial co-ordination is important to ensure higher economic growth and better jobs, and it can also save costs for the Government.

Another challenge lies in the capacity of Government agencies for effectively implementing labor laws and regulations. Laws are just a part of the story: implementation and compliance are the important key.

Finally, many workers in Vietnam are still in the informal sector, which often goes together with poor working conditions, inadequate pay and no protection. This will continue to be a major challenge for the country in the years to come. The small and medium-sized enterprises, which make up a big share of businesses in Vietnam, will need a reboot to also be able to benefit from the national economic development and its integration into global markets.

How would Vietnam’s labor market be like in the context of the country’s deeper international integration?

Vietnam will undergo a major structural transformation as it keeps deepening its integration into the global economy. In that context, first of all, the country will need to move forward to improve its labor laws and regulations and ratify key ILO conventions, including Convention on Freedom of Association and Protection of the Right to Organize (Convention 87) and Convention on the Right to Organize and Collective Bargaining (Convention 98). Compliance will also need to be strengthened to make sure that laws and regulations will be implemented in practice.

Furthermore, more investment in education and skill training for the young and dynamic labor force is another critical factor Vietnam needs to improve to seize market opportunities and create quality jobs, leading to both business growth and higher living standards, especially in the context of establishment of the ASEAN Economic Community at the end of 2015.

After all, the success of the integration and reform process depends much on whether it benefits everyone: businesses, workers and their families and society as a whole.