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Vietnam should be resilient to shifting megatrends: WB

Vietnam’s economy can be re-defined by focusing on the effective exploitation of four megatrends affecting the country’s sustainable and competitive development.

The statement was made by Ousmane Dione, country director of World Bank in Vietnam, during a conference held on in Hanoi, themed ‘Enhancing Competitiveness, Realising Sustainable Development Goals’.

The event was co-organised by the Vietnam Chamber of Commerce and Industry (VCCI), Vietnam Business Council for Sustainable Development (VBCSD) and the World Bank.

“Megatrends are regional or global in nature, and they are sustained and transformational forces that can re-define our world by changing the rules of the game,” Dione said.

Four specific megatrends Dione mentioned comprised of shifting trade patterns, rising knowledge economy, climate change, and an aging population.

“Megatrends present risks and opportunities, and the trick is to figure out how to leverage them to work in Vietnam’s advantage.”

Ousmane Dione also introduced key findings from the World Bank’s report ‘Việt Nam’s future jobs’, which emphasised the effective exploitation of the mentioned megatrends and how these trends would affect Việt Nam’s jobs structure and economic reform process.

“Jobs have been a fundamental part of Vietnam’s rapid transformation to a modern, globally integrated, middle-income country,” Dione said, adding that the country’s 50 million jobs, along with its shift towards services and manufacturing have contributed to plunging poverty rates and boosting strong economic growth over the last few decades.

“The world is on the cusp of new opportunities that could further shift Vietnam’s jobs picture. The rise of the Asian consumer class, especially in China, a shift toward knowledge economies, new trade partners and patterns, automation in the workplace, and aging, all threaten Vietnam’s current jobs structure, but they also offer opportunities.”

However, Vietnam’s job structure is not yet conductive to adapting to these megatrends, Dione said.

“The 21st century workers require a more complex set of skills than in the past. This is being driven by automation, where machines are taking over manual and routine jobs, as well as an increase in demand for products and services driven by the expanding consumer class.”

Meanwhile, a critical challenge in Vietnam is that only 8 percent of the labour force has a university education, which is insufficient to make the leap into the knowledge economy. Ethnic minorities, older workers, and pockets of youth in Vietnam are particularly vulnerable, he added.

Most of the country’s jobs are in family farming, household enterprises or low-skilled labour. Few jobs are currently positioned to embrace the megatrends. For example, only 2.1 million jobs are offered by foreign factories that pay above the minimum wage, while registered domestic firms provide no more than six million jobs.

To help Vietnam’s resilience to megatrends and effective implementation of sustainable development goals as well as improving competitiveness, the four types of capital – institutional, human, physical and natural – must be developed and deployed efficiently, equitably and effectively, he said.

He added that the WB’s report also identified three reform areas that would be essential to capture the job-related opportunities offered by a changing economic and social context. The first is to create more jobs in specific segments of the modern sector, namely via Vietnam’s SMEs, agro-industry, and value chains. The second is to enhance the quality of jobs in the traditional sectors, which is a significant part of the jobs landscape. The third is to connect qualified workers to the right jobs.

Matt Wilson, Director of Corporate Affairs of Heineken Vietnam, which was recognised as the most sustainable company in Vietnam by VCCI in 2017, said Heineken Vietnam is committed to building a healthy and safe workplace founded on mutual respect, diversity and the development of people.

“We are dedicated to helping our employees develop to their fullest potential through investments in training and development programmes that help them gain the necessary skills and knowledge to progress in their career path.”

In 2017, Heineken, directly employed approximately 2,800 employees and supported over 156,000 indirect jobs, equivalent to 0.3 percent of Vietnam’s total labour force, across its value chain.

At the event, VCCI Chairman and Co-chair of the Vietnam Business Council for Sustainable Development (VBCSD) Vu Tien Loc said that Vietnam would accelerate the economic reform process and become a high-middle-income country within the next two decades, with impressive achievements in social justice and equality and effective State management.

He emphasised the consensus and concerted efforts of all social classes, the effective support and cooperation of related parties and international organisations.

The conference also focused on issues and solutions to promote public-private partnerships, recommendations from the business community and international organisations to promote the implementation of the Government’s action programmes to improve productivity and competitiveness, towards sustainable development in the digital era.

The event was attended by more than 650 delegates, representing governmental agencies, ministries, localities, research institutions, international organisations and business associations.

Within the framework of the conference, the Ministry of Planning and Investment and the VCCI also announced the Partnering for Green Growth and the Global Goals 2030 (P4G), a new global partnership initiative aiming to facilitate and leverage strategic global public-private partnerships to contribute to the implementation of the 2030 Global Sustainable Development Goal through the implementation of Green Growth.