Tuesday, October 22 2019

VietNamNews

Experts discuss current situation of informal economy

Update: December, 14/2018 - 09:00
Prof. Dr. Nguyễn Công Nghiệp speaks at a conference in Hà Nội on Thursday to discuss the informal economy.— Photo bnews.vn

HÀ NỘI — Economists and managers gathered at a conference in Hà Nội on Thursday to discuss the informal economy.

Prof. Dr. Nguyễn Công Nghiệp said that although the informal economic sector exists in all economies, the sector’s operation is particularly strong in developing countries due to incomplete legal frameworks, as well as weak inspection, supervision and administrative systems.

More than half of the non-agricultural workforce in most low- and middle-income economies work in the unofficial economic sector, he said.

The informal economic sector accounts for about 30 per cent of GDP in Latin America, more than 50 per cent in India, and over 60 per cent in Sub-Saharan Africa.

According to the professor, in more developed economies, while it differs from nation to nation, generally speaking the sector is smaller in scale. In the US, the percentage is 5.4 per cent of the GDP; in Sweden, 6 per cent; Spain, 17.2 per cent; and Italy, 19.8 per cent.

Some experts estimate that the sector’s scale in Việt Nam is about 20-30 per cent of GDP. The General Statistics Office (GSO), while yet to give an official figure, believes the number is less than 30 per cent of GDP.

Whatever the exact number is, it is obvious that such economic activities are complex, said Nghiệp.

Economist Lê Đăng Doanh said the fast development of technology and the dynamism of a strong, integrated economy may create spaces for digital economic forms to rise as part of the informal sector. However, these forms may lead to greater social inequality and increase the gap between the rich and the poor, he said.

Doanh said that to develop the digital economy in a legal manner, the State should build a suitable legal environment for economic forms.

GSO Deputy General Director Nguyễn Thị Hương said unobserved economic forms are mostly in the illegal, leftover activities of data-collection programmes.

She said a project to build statistics on the informal economic sector is being built and will be submitted to the Prime Minister for approval later this month.

Asserting that this is a difficult job, Hương called for support and co-ordination from ministries, sectors and localities, as well as economic experts and researchers. — VNS

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