Vietnam Sees Record Productivity Growth but Remains Behind Neighbours
A new report from the Asian Productivity Organisation (APO) has found that Vietnam’s productivity remains below some of its near neighbours, despite a decade of record growth.
The APO is an intergovernmental organisation, established in 1961, which aims to increase productivity across 21 countries in Asia Pacific through cooperation, advocacy, and smart initiatives in public and private sectors.
Productivity measures the output of a particular unit of input such as labour or capital. The productivity of a country, for instance, can be calculated by dividing its GDP by the total number of hours worked. Meanwhile, measuring the productivity of workers enables economists to track trends in wages and the workforce.
In its latest report, the APO found that productivity in Vietnam was valued at USD 6.40 per hour of labour in 2020. To put that in perspective, productivity in Singapore – the most productive state in Asia Pacific – reached USD 68.50 per hour of labour. South Korea came second, with productivity of USD 40 per hour of labour. Meanwhile, Malaysia sat third (USD 26), ahead of Thailand (USD 14.8), and Indonesia (USD 12).
However, this headline figure masks a decade of record productivity growth. Vietnam’s productivity grew 64 per cent between 2010 and 2020, according to the APO. This is the strongest growth rate in the region over that period.
Vietnam is aiming to become a ‘high-income’ nation by 2045. And continued growth in productivity will be essential to realising this ambition. In a 2023 meeting in Japan between Prime Minister Pham Minh Chinh and the APO, the Prime Minister outlined his plans to boost productivity across four areas: Enhancing the quality of institutions, developing human resources, growing government capacity, and improving the management of resources.
The Prime Minister also shared plans for national pilot schemes, in conjunction with the private sector, in some of the industries which will drive productivity gains and economic growth in the future.
These pilot projects are part of the government’s national plan to increase labour productivity by 2030. Outlined in 2023, it targets 6.5 per cent annual growth in productivity, with a particular focus on key economic sectors and regions such as Hanoi, Da Nang, Ho Chi Minh City, and Can Tho.
