At the press conference to release the report. (Photo: WB Vietnam) According to the latest economic update by World Bank (WB) for Vietnam,the country’s economy expanded 5.2% in Q4 of 2021, and respectively 5.1% and7.7% in Q1 and Q2 of 2022. Inflation is projected to average 3.8% over the year.
Carolyn Turk, WB Country Director for Vietnam, said that thebi-annual report “lays out a set of policy recommendations that could helpmitigate the impact of these risks and make the economy more resilient goingforward.”
Titled “Taking Stock: Educate to Grow”, this edition underlinestransforming the higher education system as the key to boosting the country’sproductivity and achieving its development goals, in the context where thecountry re-emerges from the pandemic and into a challenging global environment.
The report’s co-author Dorsati Madani said that while Vietnam’seconomic recovery had been relatively stable, not all sectors witnessed thesame situation.
The impact on workers and households during the crisis was seriousand lasting, with about 45% claiming lower incomes in December 2021 than theprevious year.
The impact of the pandemic is still present with businessesreporting broad-based labour shortages as of March 2022, which were felt moreacutely in services and manufacturing, and in the Ho Chi Minh City area.
This, in addition to growth slowdown or stagflation in main exportmarkets, further commodity price shocks, continued disruption of global supplychains, or the emergence of new COVID-19 variants, are hindering Vietnam’s fullrecovery.
Statistics revealed that Vietnam’s population has an average 10.2years of schooling, second only to Singapore among the Association of SoutheastAsian Nations (ASEAN) countries.
Vietnam’s human capital index is 0.69 out of a maximum of 1, thehighest among lower middle-income economies.
However, low skills relevance of the university graduates put thecountry in the bottom third of the 140 countries listed in the 2018Competitiveness Index on skills relevance of university graduates.
A World Bank skills and enterprise survey published in 2019 alsosaid that 73% of sampled Vietnamese firms report difficulties in recruitingemployees with leadership and managerial skills, 54% with socio-emotionalskills, and 68% with job-specific technical skills.
Focusing on tertiary and higher education, the WB’s reportrecommends reforming the education system to improve quality and access, andthus provide the necessary skills to the population.
Reforms to Vietnam’s higher education system could help supportdevelopment objectives, the report says.
The increasing financial costs of pursuing higher education andthe perception of diminishing economic returns from pursuing higher educationhave weakened demand.
While efforts to enhance the business environment are crucial toenabling job creation, policymakers should also take steps to reduceskill-mismatches and improve the quality of Vietnam’s labour force.
Turk said: “To sustain economic growth at the desired rate, Vietnamneeds to increase productivity by 2-3% every year.
“International experiences have shown that higherworker productivity can be achieved by investing in the education system,as an important part of a basket of investments and reforms. A competitiveworkforce will generate much-needed efficiency for Vietnam in the long term.”/.
VNA
