Kamal Malhotra*

The benefit of gender equality for the economy should be evident. The Mckinsey Global Institute estimates that if women had the same role in labour markets as men, as much as US$28 trillion, or 26 per cent, could be added to the global annual GDP by 2025. This impact is roughly equivalent to the size of the combined US and Chinese economies today. On the other hand, ActionAid UK estimates that gender inequality in the economy costs women in developing countries $9 trillion a year.

Việt Nam, during its period of rapid economic development, has made impressive progress, narrowing the gender parity gaps on many fronts, such as health and education. Việt Nam’s particularly high women’s labour force participation places the country ahead of many others, not only in this region, but globally in terms of women’s direct contribution to the economy. There are other advantages of benefiting from a large supply of labour since this results in about twice as many people of working age than dependents.  

Despite these gains, Việt Nam is facing some critical challenges in competing effectively in the increasingly competitive regional and global economy. In this year’s Global Talent Competitiveness Index, Việt Nam ranked 86 out of 118 countries. The growth of labour productivity in the paid economy has been slow, and the situation is impacting women and men differently. The same index placed Việt Nam 88th in terms of business opportunities for women.

There are multiple barriers for women in Việt Nam to enjoy equal access, participation and progress in the labour market. The Labour Code reflects the presumption that only women have responsibility for family and home care. This provides a rationale for excluding women from jobs that are considered unsuitable for them. Furthermore, it encourages the provision of occupational skills training to female employees “that is suitable to their physical and physiological characteristic and their motherhood functions”. The notion that a particular skill, job or industry is better suited to one sex leads to horizontal segregation of the labour market, often clustering women into the informal sector and lower paying jobs.

In addition, women face the challenge of vertical segregation. In general, the chances for women reaching leadership positions and have a voice of influence in current affairs are limited. One of the bottlenecks is the unequal retirement age for women (55) and men (60) provided for in the Labour Code. Because women need to retire earlier than men, while also taking time out from work for child rearing and care of other family members, they are denied an equal chance for career advancement. The ILO study, which reviewed 12,300 job postings in Việt Nam, revealed that one-in-five postings included gender requirements and among the postings with a gender preference, up to 83 per cent of management positions and all director positions required male applicants.  

Such gender segmentation of the labour market also resulted in the widening gender earning gap in Việt Nam, contrary to the global trend. The gender gap in the average monthly salary of paid workers is equivalent to women working for free for one month every year. As long as institutions and policies are established or shaped based on traditional stereotypical gender roles, they will continue to shape and inhibit labour market opportunities and incentives for women.

Because of these underlying issues, economic gains have not translated into greater gender equality. While international integration and free trade may bring opportunities for growth, they can exacerbate disadvantages already faced in Việt Nam. Việt Nam’s economy is largely built on exporting low value-added products and, therefore, results in a concentration of low-tech and low-skill production that is also labour intensive.

In fact, the ILO estimates indicate that 85 per cent of textile, clothing and footwear workers in Việt Nam are at risk of being replaced by automation and robotics. This could have a profound impact on women workers in particular, who across all industries in Việt Nam, are 2.4 times more likely than men to be employed in an occupation at high risk of automation.

To achieve robust and resilient economic growth, Việt Nam must attend to the quality of growth by making it more inclusive and sustainable. There is a cost to pay when inequalities in the economy are overlooked or continue to persist for long periods of time.

The revision of the Labour Code presents Việt Nam with one crucial opportunity to get its legal framework right and navigate Việt Nam in the direction of sustainable development that benefits all. The United Nations stand ready to provide assistance to pave such a way forward. — VNS

*Kamal Malhotra is the Co-Chair of the Informal Ambassadors and Heads of Agencies Gender Policy Coordination Group and the Resident Coordinator of the United Nations in Việt Nam