Vulnerable employment up in Vietnam: ILO

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Vietnam lacks suitably skilled workers, has relatively low labor productivity and is experiencing persistent and increasing informal and vulnerable employment.

The somber assessment came courtesy of the International Labor Organization (ILO) at the 2nd ASEAN Human Resource Conference in Hanoi on May 25.

While Vietnam has had impressive labor productivity growth in the past decade, it is still approximately half the ASEAN average, and one-twelfth of Singapore, the ILO said.

Average annual labor productivity in the ASEAN region contracted by 0.3 percent between 2007 and 2009, while in China and India it surged by 8.7 percent and 4.0 percent respectively, it added.

The ILO said it was important to facilitate partnerships with enterprises from advanced economies such as the US and EU, in order to reap the additional benefit of cutting-edge skills and technology.

Improved tripartite cooperation among governments, employers' and workers' organizations is also essential to address all current challenges, including the need to improve the skills and productivity of the workforce.

In the ASEAN regional bloc, while economic recovery appears to be gaining traction, labor markets in most countries still face serious challenges, including balancing growth, increasing the quantity and quality of jobs, increasing workforce skills, and addressing deteriorating labor productivity.

Even though the region's economies are rebounding quickly, the slow or contracting economic growth in ASEAN during the crisis has lowered productivity and negatively impacted labor markets, the ILO said.

"Recent labor productivity trends highlight a serious competitive challenge to the ASEAN region, particularly for the more developed member countries," said Gyorgy Sziraczki, ILO's Senior Economist.

"Increased productivity is critical for sustained growth and must also be reflected in higher wages, better jobs and working conditions.

Without higher wages domestic consumption can't increase and economies will remain dependent on exports."

Vulnerable employment is defined as own account and family workers, with jobs typically providing lower and more inconsistent wages and less social protection. Working poverty has also risen quickly in the past two years with workers living under severe deprivation (under $1.25).

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