Vietnam's economy will face huge workforce productivity challenges

	Vietnam's economy continues to face many challenges
	In the first six months Vietnam's economy escaped from negative growth
	Vietnam's economy starts growing again

A latest Government report relating to workforce productivity of the whole economy in the 2011-2019 period shows that the labor productivity of Vietnam continues to improve significantly over the years. Vietnam is a country with a high growth rate of labor productivity in the ASEAN region.

In 2019, Vietnam's labor productivity at current prices reached VND110.5 million for each employee (equivalent to US$4,792), an increase of 6.28%, helping the average increase in labor productivity of the whole society in the 2016-2019 period reach 5.8% each year.

This increase is higher than the average growth rate of 4.3% each year in the 2011-2015 period, meeting the target set out in Resolution No. 27 / NQ-CP dated February 21, 2017 of the Government (increasing over 5.5%).

Economic growth is based on increasing labor productivity. This is the most prominent feature of the change in the way or quality of growth in the 2016-2020 period.

In terms of purchasing power parity (PPP 2011), the growth rate of Vietnam's labor productivity in the 2011-2019 period is higher than that of ASEAN-6 countries. As a result, Vietnam has narrowed the relative gap with ASEAN countries with higher levels of development.

However, also according to PPP, Vietnam's labor productivity in 2019 was only 7.6% of Singapore's productivity level; 19.5% of Malaysia; 37.9% of Thailand; 45.6% of Indonesia.

This shows that Vietnam's economy will face huge challenges to catch up with the labor productivity of ASEAN-6 countries.

The main reason is due to the small scale of Vietnam's economy, the slow economic transition, outdated machinery, equipment and technological process. The rate of contribution of the total factor productivity (TFP) to the growth is still low; limited quality of human resources; the business sector is not really the driving force for the growth of labor productivity.