The ASEAN Economic Community (AEC) could provide Vietnam with a huge opportunity to create jobs when it is established next year, but the poor quality of its labor could prevent it from doing so, according to Gyorgy Sziraczki the director of ILO Vietnam.
The introduction of the AEC could spur growth in Vietnam's GDP by 14.5 percent and boost jobs by an additional 10.5 per cent by 2025, but only if decisive action is taken to manage it effectively, according to a report prepared by the International Labor Organization (ILO) and the Asian Development Bank (ADB).
The report was presented at a recent national policy dialogue co-organized by the labor ministry in Hanoi.
Job seekers without the right skills and experience may not be able to seize on the new opportunities, the report found.
Cao Quang Dai from the Department of Vocational Training under the labor ministry said the competition for jobs will increase when AEC comes into effect, as it will allow a free flow of skilled laborers, services, investment and goods among the ASEAN members.
Under-qualified laborers could lose jobs, which poses a big challenge to Vietnam’s vocational training system, Dai said.
Vietnamese laborers have poor soft skills in terms of team work and foreign language skills. To keep their jobs amid international integration, they need to improve those skills, he said.
The report points out that two of the three new jobs that the AEC creates in Vietnam may be vulnerable, low-quality, jobs, such as nannies or house workers.
Despite the country’s formidable economic progress, nearly half of Vietnam’s laborers work in agriculture, where productivity, income and working conditions are typically low compared to some other ASEAN economies.
“Unless decisively managed, this could increase inequality and worsen existing labor market deficits – such as vulnerable and informal employment, and working poverty,” said Yoshitery Uramoto, ILO Assistant Director-General and Regional Director for Asia and the Pacific.
However, some other experts have been more optimistic about Vietnam’s opportunities in the integration.
Qualified Vietnamese laborers could get higher income jobs in other ASEAN countries like Singapore, Malaysia, and Thailand, said an ILO expert.
The report indicates that Vietnam will be among the countries that benefit more than others from the deeper regional integration as its economy is heavily reliant on external trade.
It foresees robust employment growth in sectors such as construction, transportation, garment and food processing.
If determination and efforts are put in place, Vietnam’s productivity could more than double by 2025, compared to 2010, according to the report.
“With increased trade and investment flows, the pace of structural changes to higher-value sectors will accelerate,” said Tomoyuki Kimura, Country Director of ADB Vietnam. “This could allow Vietnam to compete in global markets based on higher productivity and skills.”
Vietnam and other ASEAN countries need to develop policies and institutions that support inclusive and fair development, he said.
“Vietnam is aware of the importance of the AEC 2015 and its opportunities as well as challenges,” said labor minister Pham Thi Hai Chuyen. “We are doing our best to prepare for the deeper integration and ensure that its benefits are enjoyed by all.”
The report suggests that the first priority measures should be taken to boost productivity and job quality in agriculture and diversifying manufacturing employment into new sectors, while continuing to support the garment industry.
In addition, it is necessary to extend social protection coverage and improve the protection of migrant workers.