Better work conditions, more growth

Workers make clothes for export at the Gian Khau Industrial Zone in Gia Vien District, the northern province of Ninh Bình. — Photo baoninhbinh.org.vn

This is the main message that came out of a conference in Hà Nội, jointly organised by the State Secretariat for Economic Affairs of Switzerland (SECO), the International Labour Organization (ILO) and the Ministry of Labour, Invalids and Social Affairs (MoLISA), yesterday.

“Within a generation, Vietnam has transformed itself from one of the most isolated economies to one of the most connected ones, through various free trade agreements,” said director of ILO Vietnam Chang-Hee Lee.

While acknowledging the benefits an open economy can offer in terms of investment, opportunities in global markets and job creation, he warned of the accompanying risks - as enterprises face tougher competition, workers and their families are more exposed to the volatility of global market forces.

“For an open economy to remain competitive while ensuring a stable livelihood for its working population, it requires an environment for sustainable enterprise development and resilient labour market institutions to mitigate the negative impact of external shocks on the lives of working women and men,” Lee said.

The Trans-Pacific Partnership (TPP) and EU-Vietnam Free Trade Agreement (EVFTA), which Vietnam has signed, require reforms in labour code and industrial relations to comply with the 1998 ILO Declaration on Fundamental Principles and Rights at Work. “It is a challenge,” Lee said.

Other concerns include the middle income trap that Vietnam has been warned about – the country may not be able to move beyond labour intensive-manufacturing, with little added value, and low wages for its unskilled workforce.

Swiss Ambassador to Vietnam Beatrice Maser Mallor said, “Given that context, strengthening social dialogue, enhancing productivity and improving working conditions are critically important to (be able to) respond to the requirements of globalised production processes, and, ultimately, to contribute to sustainable and inclusive economic growth.”

Boris Zürche, head of Swiss Labor Directorate, agreed. “Switzerland’s experience shows that strong social dialogue is essential for the prosperity of a country. Together, workers’ and employers’ organisations can find tailored solutions to improve working conditions, increase productivity and assure the competitiveness of the economy.”

Doan Mau Diep, Deputy Minister of Labour, Invalids and Social Affairs, said it was “the right time” for the government, together with ILO, business communities, workers’ organisations and other partners, to review the country’s legal and institutional framework and improve productivity and working conditions, and to design and implement more effective policies in this area.