Poor training and an aging population threaten a ‘golden opportunity’ for Vietnam’s workforce
The active population stands at 68.4 per cent of the total. The workforce now numbers 63 million. Labour productivity and an improved education system are key to Vietnam's economic development. In 2016, the Vietnamese 65 and over represented about 7 per cent or 6.5 million people. By 2040 that will triple to 17 per cent or 18.4 million.
Hanoi (AsiaNews) – Vietnam's economy faces a period of great opportunities, but also some serious challenges. Although the country is in a "a golden age" in terms of workforce size, experts warn about the impact of demographic trends on the country’s economy. In fact, aging has now become an issue, casting a shadow on its economic future.
Against a backdrop of rapid growth, Vietnam’s development is tied to training a skilled labour force, but government policies are inadequate. Its population now stands at about 95 million people and can be considered young given its age structure as more than 60 per cent are under 35.
Recent studies show however that the country is reaching the end of its "demographic transition", a phase marked by three factors: declining fertility, declining mortality, and higher life expectancy. As a result, the child population has declined whilst the active workforce and the senior group have risen.
Every year, around 1.2-1.3 million young people reach working age. The Department of Population and Family Planning reports that the active population (between 15 and 64) rose from 53 per cent to 68.4 per cent, reaching 63 million people. This earned it the title of "Golden population".
Over the past two decades, the availability of a large, low-cost manpower has driven the Vietnamese economy. This has created a huge demand for workers, but the government has failed to provide adequate training for the effective use of human resources. No plan has been implemented to establish vocational schools.
As Vietnam’s economy experiences strong and constant growth, it needs to boost productivity and a workforce with the technical skills needed to adapt to a competitive global market. The risk of dependency on au unskilled and cheap labour is great.
“Currently, about 178,000 youth have graduated [. . .] and are still unemployed,” said Phạm Chi Lan, an economic expert. "In the next 20 or 30 years, the government must take advantage of the opportunity provided by the 'golden population' to increase labour productivity. We cannot wait anymore if we do not want to face backwardness."
“Vietnam needs to seize the opportunity of the Golden population to improve labour productivity,” said recently Nguyễn Thế Phương, deputy minister of Planning and Investment, “because this opportunity will not come back. If it does come back, it will be at least 100 years or 200 years later.”
A further threat to Vietnam's economic future lies with its aging population. In 2017, the Vietnamese population entered the so-called "aging phase,” a study by the United Nations Population Fund (UNFPA) found.
According to a World Bank report, in 2016 people 65 and over represented about 7 per cent or 6.5 million people of Vietnam’s population. However, by 2040 that number will increase three times reaching 18.4 million, or about 17 per cent of the population.
According to a report from the Foreign and Commonwealth Office of the United Kingdom (FCO), Vietnam's total birth rate is 2.09, below what is needed to maintain the population at current numbers.
After pursuing policies in favour of abortion and family planning, Vietnamese authorities are now trying to reverse course and promote births.
Last July 4, Nguyễn Thiện Nhân Communist party leader in Hanoi, invited women to have at least two children. He warned that the current birth rate of 1.46 children per woman in the city could undermine economic growth in the future. Nhân, who headed the Family Planning Committee, said that it is time for the city to take appropriate measures.
Last January, Health Minister Nguyễn Thị Kim Tiến urged the government to adopt a new policy to encourage women to have more children. He said the government should allow couples to have as many children as they want instead of the two-child policy, which helped curb the country’s birth rate since 2006.
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