Vietnam, Japan discuss workers’ wages

Nagai Katsuro of the Japanese Embassy to Vietnam stressed that in recent years, co-operation between the two countries has been extremely close.

The Joint Initiative Phase VI that ends this year is divided into main seven issues that Japan wishes to solve and implement together with Vietnam, so that the latter can improve its business and investment environment in the near future, said Nagai.

The initiative focuses on labour, salary, logistics, transportation, support for small- and medium-sized enterprises, restrictive rules applicable to foreign investors in the Investment Law and the Enterprise Law, and pharmaceutical distribution.

One issue raised by Japan at the meeting was labour and wages. Commenting on this, Nguyen Tien Dang, head of the Salary Department under the Ministry of Labour, Invalids and Social Affairs (MoLISA), said the current method of calculating base salary is not transparent, and that basic data and survey methods to calculate base living expenses for workers are yet to be completed, hence the lack of results.

Dang also said that the growth of the Consumer Price Index and the Gross Domestic Product are not in sync with the salary growth rates, which cause problems for foreign direct investors in the country.

To address the confusion, the Vietnamese and Japanese sides will conduct additional discussions, making sure that foreign firms in Vietnam do not have to increase their workers’ salaries repeatedly to fend off competitors trying to poach them.

Speaking at the meeting, Do Nhat Hoang, director of the MPI’s Foreign Investment Agency, lauded the successful relationship, noting that bilateral trade and investment were flourishing and deepening, with Japanese investors placing their trust in Vietnamese business environment.

However, he warned that Vietnam still needs to improve its investment opportunities and environment to better attract Japanese entrepreneurs.

Japan is the second biggest foreign investor in Vietnam in the first seven months of 2017, according to a report by the MPI, with up to 24.92% of total foreign direct investment capital in the country, which equates to US$5.46 billion.

The Vietnam-Japan Joint Initiative Phase VI: New Co-operation Cycle was initiated by the MPI in collaboration with the Embassy of Japan in Vietnam and the Japan–Vietnam Economic Committee under the Japan Business Federation. 

The Vietnam-Japan Joint Initiative, initiated in April 2003, is a forum for policy dialogue between Vietnamese authorities and Japanese investors.