Nearly three quarters of all employees at foreign-invested enterprises in five surveyed cities and provinces - Ho Chi Minh City, Hanoi, Da Nang, Binh Duong and Dak Nong - lack permanent residency, a World Bank report on Vietnam’s Household Registration System released on June 16 revealed.

Some 5.6 million people in the five cities and provinces are without permanent residency, including 36 per cent of the population in Ho Chi Minh City and 18 per cent in Hanoi.

The majority work in the private sector, especially in manufacturing and for foreign firms. They have limited access to public schools, taking out health insurance or even registering motorcycles.

Temporary registrants (i.e. those with permanent residency) are far more likely to work in manufacturing.

A majority of working temporary registrants (55 per cent) have manufacturing jobs, compared to just 17 per cent of permanent registrant workers.

The remarkably high figure reflects the fact that recent migrants, who lack permanent status, largely form the workforce at factories in Vietnam’s industrial areas.

Permanent status workers, in contrast, are more prevalent in jobs in various sectors relating to trade and services.

Notably, temporary registrant workers are only slightly more likely to be in construction than permanent registrant workers (6 per cent of permanent registrants compared to 8 per cent of temporary registrants), although construction workers are sometimes perceived to be largely migrants.

Temporary registrants overwhelmingly work in the private sector, and a large share work for foreign firms. “Forty per cent work for domestic private sector firms and 30 per cent work for foreign firms,” the report found.

“In comparison, 30 per cent of permanent registrant workers work for domestic firms and just 6 per cent work for foreign firms.”

Those with permanent registration are substantially more likely to work in agriculture, household businesses, and the public sector.

The paucity of temporary registrants in the public sector likely reflects requirements of permanent residency for some public sector jobs.

Mr. Achim Fock, the World Bank’s Acting Country Director for Vietnam, said the study shows that the permanent residency system has created inequality of opportunity for Vietnamese citizens.

“Further reforms could ensure that migrants have the same access to schools, healthcare, and employment in the public sector as everyone else,” he said.

“That will encourage people to move to cities and support Vietnam’s economic growth and structural transformation.”

“The permanent residency registration system is no longer relevant for managing and controlling Vietnamese society, which has been undergoing drastic changes under ‘doi moi’ and international integration,” said Mr. Dang Nguyen Anh, Vice President of the Vietnam Academy of Social Sciences.

“The system should be replaced by a more scientific and modern tool to make people’s lives easier and inclusive.”

The permanent residency system began 50 years ago as an instrument of public security, economic planning, and control of migration.

Citizens have mixed views of the existing permanent residency system, and a large majority believes it should be relaxed because it limits the rights of migrants and induces corruption.

VN Economic Times