|Vice President of the World Bank Axel van Trotsenburg (left).— VNS File Photo
On the occasion of his four-day visit to Viet Nam, which ends today, Vice President of the World Bank Axel van Trotsenburg shares his opinion about employment to Viet Nam News.
Over the last two decades, millions of Vietnamese have escaped poverty through better employment thanks to a dynamic, growing and vibrant economy.
Since the early nineties, the proportion of Vietnamese people living in extreme poverty at less than US$1.10 per day has dropped from 58 per cent to less than 10 per cent in 2010.
At the recent World Bank - IMF Spring Meetings, global leaders committed to a target of reducing extreme poverty globally to 3 per cent by 2030.
Viet Nam is well on track to reach that target early and go even further. To accomplish this, Viet Nam faces the challenge of accelerating poverty reduction, especially hard to reach areas that include ethnic minorities.
The fact is Viet Nam needs more jobs, and higher quality jobs, to help reduce poverty. The problem is growing as more young Vietnamese enter the job market every year. Almost 10 million more people joined the labor force in the decade ending in 2011.
According to the latest official estimates, nearly one million Vietnamese are unemployed and over one million are underemployed. Viet Nam will need to create roughly 1 million jobs per year, a challenging prospect at a time when the growth rate is slowing.
Vietnamese youth between the ages of 15 and 24 are particularly hard hit, and account for nearly half of all unemployed. Viet Nam faces the challenge of meeting the younger generation's aspirations by delivering quality jobs in the right sectors to spur rapid, inclusive and sustainable development and to begin to reverse growing inequality.
The challenge is especially visible in rural and mountainous areas where too many are working in agriculture that is inefficient and barely yields a living wage.
The recent economic slowdown has pushed many others into low-income, vulnerable, informal sector employment. Earnings are low and irregular, making it increasingly difficult for families to support themselves.
Part of the challenge is the competitive external environment. Viet Nam is going head-to-head with countries that export highly competitive goods and like its competitors it faces difficult structural reforms.
Making state enterprises more efficient and providing support to the private sector with the right incentives to nurture small and medium enterprises is critical.
The challenge is to create a highly efficient public sector by removing bureaucratic constraints, complemented by a dynamic private sector to maximise job creation.
Special attention is needed for small and medium enterprises and ensuring they have access to finances so they can create jobs. Policies to modernise and increase value added in agriculture will increase rural incomes.
In countries all over the world, financial sector reforms are being undertaken. Viet Nam would also benefit from re-thinking efficiency, transparency and other measures to boost confidence in the financial markets.
To help prepare Viet Nam for this future, reforms from early childhood education through higher education are important along with building a culture of life-long learning. In that context, the right skills matter.
New World Bank research on skills in Viet Nam shows that employers are looking not only for technical skills, but also cognitive skills like critical thinking and problem solving and behavioral skills like reliability, ability to work on a team and communication skills.
The Government has policy levers it can use to meet the challenge, including increasing public funds for science, mathematics, and engineering and research and development.
At the same time, it needs to focus on making sure funds are better allocated; further targeting public spending for scholarships and loans, especially for the poor and ethnic minorities; and encouraging selected university-industry linkages to improve the relevance of the curriculum and support entrepreneurship.
The challenge of creating more, higher quality jobs is not only a challenge for the government, but a call for all Vietnamese people to come together around this agenda for the next generation. — VNS