VietNamNet Bridge - Typically, in many countries around the world, the unemployment indicator is used to assess the health of the economy. If this rate is low, the economy is healthy and is creating more jobs. But it is different in Vietnam.


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Job seekers at an employment service center.

A bad economic year

Perhaps fans of the Kitchen’s God show program in 2013 New Year on the national VTV channel still do not forgot the adapted song “Hoang Mang (Anxious) Style” (Based on Gangnam Style), in which comedians expressed their view about a sad year of the national economy in 2012.

Indeed, the general perception of the people, businesses and professionals of the year 2012 is similar: it is a bad year for the economy.

According to the annual report 2012 of the Vietnam Chamber of Commerce and Industry (VCCI), the number of bankrupted companies in the year reached the record level - with 58,128 enterprises. As of April 1, 2012, Vietnam had only 312,600 operating enterprises of the total 694,000 enterprises established since the Enterprise Law took effect.

The number of businesses and the scale of business both reduced dramatically. Specifically, the average number of employees in a business fell from 74 people in 2002 to only 34 people in 2011. The data for 2012 is not mentioned, but probably it was not better due to the difficulties of the economy.

In such a situation, the General Statistics Office provided a survey of the labor and employment with beautiful figures as in a dream.

Numbers cannot speak

Results of the survey of employment in the fourth quarter of 2012, released by the General Statistics Office in late April 2013 showed that by January 1, 2013, the country had 52.79 million people in the labor forces. Up to 51.93 million people were employed and only 857,400 people were unemployed.

Compared with the same period of 2011, the number of employed workers increased by 246,000 people, mainly in men and in urban areas, and the number of new workers joining the labor force year was 250,000.

Thus, the number of unemployed increased in 2012 was only 4,300 people, reaching the dream unemployment rate of 1.81 percent.

Yet, another notable point in the report, the unemployment rate in urban areas is higher than in rural areas, with the highest rate in HCM City - over 3 percent in early 2013.

At another meeting in early 2013, the Ministry of Labor, War Invalids and Social Affairs said that the unemployment rate in Vietnam by the end of 2012 was 1.99 percent. For economic operators, this is the bright spot in the gloomy picture of the economy last year, and it is even brighter as the unemployment rate continued to decline in recent years: 2.8 percent in 2010, 2.22 percent in 2011 and less than 2 percent in 2012.

However, according to the government report to the National Assembly, cited by many experts in meetings, the unemployment rate in 2012 was 3.25 percent, with 1.52 million unemployed workers. The both figures were confirmed by Deputy Minister of Labor, War Invalids and Social Affairs Nguyen Thanh Hoa.

Why are these important numbers so different? This question needs to be answered seriously.

Some figures for comparison

It must be said that the unemployment rate of 1.81 percent as the General Statistics Office announced, or 3.25 percent as reported by the Government, are the dream numbers of many countries, especially countries in crisis in Europe and the United States.

According to the U.S. Department of Labor, as of late April 2013, the unemployment rate was down to its lowest level in four years, reaching 7.5 percent. With this result, American economists said that this is a positive sign for the recovery of economic growth in America.

In Europe, the German economy is considered the most robust in the common currency area in Europe, but its unemployment rate is also over 7 percent. Specifically, according to the Federal Labor Agency, the unemployment rate in Germany in April 2013 fell to 7.1 percent, bringing the total number of unemployed workers to 3.02 million (down by 77,500 people).

Looking to the other European countries that are engulfed in economic crisis, the unemployment rate is much higher. For example, in Spain, by the end of March 2013, there were more than 5 million unemployed workers, the rate equivalent to 27 percent of the workforces. Similarly, in Greece, it is 27.2 percent, Italy 11.5 percent and Portugal 17.6 percent.

Indeed, if one just looks at the unemployment figures to assess the economy, as other countries still do, then Vietnam is certainly a model of economic success in the world and the region. But in reality, these numbers cannot speak because the year 2012 was extremely difficult of Vietnam's economy. In a report on the socio-economic situation in 2012, the government admitted, "Macroeconomics is unstable. Inflation risk can come back. Bad debt increases and solved slowly. Interest rates are high compared with business effectiveness. Enterprises face a lot of difficulties, difficult to access to capital, large inventory. The number of enterprises that are dissolved and stopped operating is high. The real estate market gets a standstill and there is no possibility of recovery soon. Several state-owned corporations work inefficiently, violate the law and cause heavy losses." In this economic situation, it is puzzling when the country had less than 1 million unemployed workers.

Wrong numbers, economy goes the wrong way

Mentioning the number of new jobs created in the year or unemployment, many National Assembly deputies said they do not believe in these statistics.

Mr. Bui Sy Loi, Deputy Chairman of the Committee of Social Affairs of the National Assembly, told reporters that the data on wage, job creation and unemployment are problematic. According to Loi, while the economic growth rate, the capital investment/GDP declined from the previous year, the number of enterprises that have to stop operation or go bankrupt increased, the number of new jobs is not affected, even increases and the unemployment rate reduces is unbelievable.

Deputy Tran Du Lich also said frankly, that he did not believe that the economy can create approximately 1.5 to 1.6 million jobs a year. He said the government must have the technical tools to calculate the exact number of workers with job each year.

The Economic Committee of the National Assembly also agreed with this view. In its macroeconomic news released in mid-March 2013, the agency said that there is an opposite movement, beyond the predictions of analysts: when the economy is declining but the rate of unemployment, under-employment rate and income, wages have been "slightly improved." This is "difficult to explain in the context of the corporate sector facing a lot of difficulties."

Economist Le Dang Doanh said that labor and employment statistics in Vietnam has long been had too many shortcomings, both in terms of the accuracy and implications for the economy. "The goal in creating new jobs is reported over a million each year, but it is very difficult to point out that where are those jobs," he said.

Once the key figures of the economy have not been calculated correctly, not enough to create confidence in the market, the ability that the policy is deflected is unavoidable.

DNSGCT