(Luận văn) structural transformation and economic growth of asia developing countries and vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS t to ng hi ep VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS n w lo ad y th ju STRUCTURAL TRANSFORMATION AND yi pl ECONOMIC GROWTH OF ASIAN ua al n DEVELOPING COUNTRIES AND VIETNAM n va ll fu oi m Summary version at nh z By z j ht vb TRAN THIEN TAI k m gm m co Dr TRAN TIEN KHAI l Academic Supervisor: an Lu n va y te re HO CHI MINH CITY, NOVEMBER 2012 ABSTRACT t to ng This paper investigates the structural transformation and growth of some hi developing Asian countries and Vietnam, using data extracted from World ep Development Indicator and Global Finance Development of World Bank from 1985 n w to 2010 The paper uses polynomial model regression and description statistics lo method Findings from the paper includes: (1) except Korea and Malaysia, others ad Asian developing countries are all in the first phase of structural transformation y th Agriculture sector trends to decrease once GDP per capita increases Industry sector ju yi trends to increase once GDP per capita increases Service sector increases once pl GDP per capita increases; (2) the threshold of structural transformation from the al n ua first phase to the second phase is when GDP per capita equals US$ 6,600 per n va person At that level, sectoral share of agriculture, industry, and services reach 7%, ll fu 45% and 48% respectively; (3) Asian developing countries including Vietnam are oi m not all followed the same process and are not homogeneity of structural transformation; (4) compared to Malaysia, Thailand and the Philippines, the share nh at of agriculture in GDP of Vietnam is still high and is the highest in the four z countries The share of services in GDP of Vietnam is always the lowest in the four z j ht vb studied countries; (5) the rate of labor distribution in the agricultural sector of m Vietnam is high compared to Malaysia, Thailand, and the Philippines and in the k opposite direction, the rate of labor in services of Vietnam is low compared to gm l Malaysia, Thailand, and the Philippines; (6) labor productivity in all three sectors of inefficient is agricultural sector, followed by the service and industrial m co Vietnam are lower than Malaysia, Thailand, and the Philippines but the most an Lu n va Key Words: structural transformation, GDP per capita, growth, Asian developing y te re countries, Vietnam TABLE OF CONTENT t to ng CHAPTER 1: INTRODUCTION hi CHAPTER 2: LITERATURE REVIEW 2.2 Empirical studies Conceptual framework w Theoretical review n ep 2.1 lo 2.3 ad CHAPTER 3: RESEARCH METHOLODOGY 11 Data 11 ju Research methodology 11 yi 3.2 y th 3.1 pl CHAPTER 4: EMPIRICAL ANALYSIS OF STRUCTRUAL al Overview of economic growth of Asian developing countries in period n va 4.1 n ua TRANSFORMATION AND GROWTH 13 Experimental study result of structural transformation Asian developing oi m 4.2 ll fu 1985 -2010 13 countries during 1985-2010 16 nh at 4.2.1 Result of statistics descriptive model 16 z 4.2.2 Result of economestric model 21 z vb 4.2.3 Structural transformation and labor productivity of Vietnam and acomparision j ht k m with Malaysia, Thailand and the Philippines 27 gm CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 34 l 5.1 Conclusions 34 m co 5.2 Recommendations 34 an Lu REFERENCES 36 n va y te re (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam CHAPTER 1: INTRODUCTION t to ng Some empirical studies show structural transformation process is hi ep accompanied with economic growth of developed countries By history record, Kuznets (1971) in Economic of Nations emphasizes that there are six characteristics n w that every developed country manifested in the process of economic growth One of lo them is the high rate of structural transformation of the economy Chenery (1979) in ad y th Structural Change and Development Policy examines the pattern of development of ju some developing countries after World War II period The empirical study identifies yi several characteristic features of development process One of them is the shift pl ua al away from agricultural to industrial production n Asian developing countries, including Vietnam, are under developing process n va Therefore, they maintain sustainable growth in the last two decades and played a ll fu key role in economic growth of the world It is useful to analyze what is the oi m structural transformation process of Asian developing countries including Vietnam? nh My paper tries to achieve three main objectives: (1) to analyze structural at transformation process1 of some Asian developing countries, including China, z z India, Indonesia, Korea, Malaysia, Nepal, the Philippines, Sri Lanka, Thailand and vb j ht Vietnam, during 1985-2010; (2) to analyze labor productivity of between Vietnam k m and Malaysia, Thailand and the Philippines; (3) to implicate ways to improve gm structural transformation process of Vietnam Therefore, the main questions of this m co l paper research are: (1) how is the structural transformation process of Asian developing countries? (2) is the structural transformation process of Asian an Lu developing countries homogenous? (3) what are the differences of structural n y te re va Structural transformation process is transformation process between sectors in an economy such as the transformation between agriculture, industrial and service sector through time or through development (GDP or GDP per capita) Agriculture sector covers forestry, fishing, hunting and agriculture as a whole; Industrial sector comprise mining, quarrying, manufacturing, construction, electricity, gas, water; Service sector includes all service activities, such as transportation, logistics, communication, whole sale, retail, banking, insurance, real estate, public administration, defense and others services (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam transformation process and labour productivity between Vietnam and Malaysia, Thailand and the Philippines? These questions will be answered upon the analysis t to in chapter four ng hi The paper is continued with following chapters Chapter two recalls the ep literature review including the theories and empirical studies of structural transformation in the world and Vietnam Chapter three describes the dataset and n w lo research methodology Chapter four analyzes the structural transformation process ad of Asian developing countries and the comparison of structural transformation and y th labor productivity of Vietnam versus Malaysia, Thailand and the Philippines Base ju yi on the main findings identified in chapter four, chapter five will come out with the pl main conclusions, policy implications and limitations of this research n ua al n va ll fu oi m at nh z z j ht vb k m gm m co l an Lu n va y te re (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam CHAPTER 2: LITERATURE REVIEW t to ng hi 2.1 Theoretical review ep According to Begg et al (1995), Gross Domestic Product (GDP) can be measured by the formulation: n w i lo gdpi   vaij ad (1) j 1 ju y th Where: yi gdpi is GDP of a country in year i pl ua al vaij is value added of sector j in year i n j includes three sectors of an economy: agriculture, industry and service va n Solow (1962) uses the Cobb-Douglas production function to form up Solow ll fu growth model oi m q=Akα (2) at nh A is multifactor of productivity or technology progress of an economy k is capital per capita of an economy z z q is output per capita of an economy vb j ht Equation (2) explains output per capita will be increased significantly once k m productivity, efficiency or technology change happens to the economy We all gm know that a market economy tends to allocate resources from less efficient areas to l more efficient areas Therefore, this model will support this research of structural m co transformation in the following sections of this chapter an Lu Lewis (1955) develops the two-sector labour surplus model in 1955 In this model, the underdeveloped economy consists of two sectors which are traditional y transferred to the modern sector and makes the modern sector’s output grown The te re equal to zero (MPL=0) The proportion of surplus labour in traditional sector will be n resource of land Its marginal product of labour (MPL) tends to diminish until MPL va and modern sectors Traditional sector has a surplus of labour while a limited (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam Firgure 10 displays that although the process of economic structural transformation also took place in Vietnam and other countries, but the share of t to agriculture of Vietnam is always at a higher level than others and the share of the ng hi service sector of Vietnam is always lower than other countries The highlight of ep Vietnam in the industry is from the lowest point of all countries, the share of Vietnam's industry has continued to increase, surpassing the Philippines and very n w lo close to Thailand ad In the aspect of labor allocated to each sector, although the rate of agricultural y th workers of Vietnam fell from 70% in 1996 to 51% in 2009, but this rate is still very ju yi large compared with the rate of agriculture's contribution to GDP was 21% in 2009 pl 70 n 60 n va 50 fu 40 ll oi m 30 nh 20 at 10 2009 2008 2007 2006 2004 2003 2002 2001 2000 1999 1998 1997 1996 k m Ser j ht Ind vb Agr z 2005 z Sectoral Employment share Vietnam ua al 80 gm m co Source: Author’s calculation and draw from data of World Bank, 2012 l Figure 11: Sectoral employment share of Vietnan 1996-2009 an Lu n va y te re 29 (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam t to % Employment in Agriculture sector 80 70 60 ng 50 hi 40 ep 30 20 w 10 2008 2008 2009 2007 PHL 2006 2005 2004 2003 THA 2007 ad MYS 2002 2001 2000 1999 1998 1997 lo 1996 n VNM pl 30 al 25 ua 20 n 15 va 10 n PHL 2009 2006 2005 2004 2003 2000 1999 1998 1997 2002 THA VNM at nh MYS oi m 1996 2001 ll fu % Employment in Industry sector yi 35 ju y th 40 z 60 vb 50 j ht 40 m 30 k gm 20 THA VNM 2009 2008 2006 2005 2004 PHL an Lu MYS 2003 2002 2001 2000 1999 1998 1997 1996 2007 10 m co l % Employment in Service sector z 70 30 y Labor ratio in the agricultural sector of Vietnam is at a very high level compared to te re Firgures 12 shows us the sectoral employment of four ASEAN countries n Source: Author’s calculation and draw from data of World Bank, 2012 va Figure 12: Sectoral employment share of Vietnam, Malaysia, Thailand and the Philippines (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam Malaysia, Thailand and the Philippines In the industrial sector, corresponding to the growth rate of GDP share, the shift of industry workers also follows a similar t to trend The industry labor rate of Vietnam has surpassed the Philippines and catched ng hi up with Thailand Similar to the agricultural sector, but in the opposite direction is ep the service sector of Vietnam The labor rate of service sector in Vietnam is always lower than the other countries n w lo In terms of sectoral labor productivity of the four countries, I calculated the ad sectoral labor productivity (US$ per person per year) From database I draw a y th comparison chart on the labor performance of each sector of the four countries as ju yi shown in figures 13, 14, and 15 as below From figures we see that labor pl productivity of Vietnam is less effective than Malaysia, Thailand and the al n ua Philippines in all three sectors In industry, labor productivity of Vietnam in 2009 va was US$ 3,892 per person per year, while the numbers of Malaysia, Thailand, and n the Philippines were US$ 26,637, US$ 15,144, and US$ 9,671 respectively fu ll Similarly in the service sector, labor productivity of Vietnam is also lower than oi m other countries So we can say that the labor productivity of Vietnam is less nh at efficient than Malaysia, Thailand and the Philippines in all three sectors z z Labor productivity in agriculture sector vb 14,000 m 12,000 k 10,000 gm 8,000 6,000 l 4,000 THA PHL VNM 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 MYS an Lu 1996 2009 2,000 2008 m co US$ per person per year j ht 16,000 n va 31 y Source: Author’s calculation and draw from data of World Bank, 2012 te re Figure 13: Labor productivity in agriculture sector of Vietnam, Malaysia, Thailand and the Philippines (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam Labor productivity in industry sector t to 30,000 5,000 y th MYS THA PHL 2009 2008 2007 2006 2005 2004 2003 2002 ad 2001 lo 2000 n w 10,000 1999 15,000 1998 ep 20,000 1997 hi 25,000 1996 ng US$ per person per year 35,000 VNM ju yi pl ua al Figure 14: Labor productivity in industry sector of Vietnam, Malaysia, Thailand and the Philippines n Source: Author’s calculation and draw from data of World Bank, 2012 va n Labor productivity in service sector fu ll 16,000 oi m 12,000 nh 10,000 8,000 at 6,000 z z 4,000 2009 2008 2007 2006 2003 2002 2001 2000 1999 1998 1997 2004 Series3 Series4 gm Series2 k Series1 m 1996 2005 2,000 j ht vb US$ per person per year 14,000 l an Lu Source: Author’s calculation and draw from data of World Bank, 2012 m co Figure 15: Labor productivity in service sector of Vietnam, Malaysia, Thailand and the Philippines We see all the three sectors of agriculture, industry, and services of Vietnam n va are less efficient than Malaysia, Thaland and the Philippines One question posed is effective, with labor productivity in 2009 was US$ 793 per person per year, 32 y and figure 16 below show us that in these three sectors, agriculture is the least te re that in these three sectors in Viet Nam, which sector is the least effective? Table (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam followed by the service sector with US$ 2,636 per person per year and the most efficient in the three sectors is the industry with US$ 3,892 per person per year t to 264 1,860 1,454 1997 279 1,782 1,353 1998 277 1,947 1,222 1999 278 2,047 1,241 283 2,235 1,310 280 2,115 1,348 300 2,119 1,337 336 2,146 1,417 377 2,312 1,533 435 2,657 1,599 507 2,642 1,737 567 3,227 1,998 3,811 2,466 3,892 2,636 lo 1996 2000 y th 2001 ju 2002 yi pl 2003 ua al 2004 2005 n va 2006 n 2007 793 oi m 2009 ll 785 fu 2008 at nh Source: Author’s calculation from data of World Bank, 2012 Sectoral labor productivity of Vietnam z z vb 4,500 j ht 3,500 3,000 k m 2,500 gm 2,000 1,500 Ind Ser 2009 2006 2005 2004 2003 1998 1997 Agr an Lu 1996 2008 500 2007 1,000 m co l US$ per person per year 4,000 2002 n w Service 2001 Industry 2000 ep Agriculture ad hi Year 1999 ng Table 4: Sectoral labor productivity of Vietnam (US$ per person per year) n va 33 y Source: Author’s calculation and draw from data of World Bank, 2012 te re Figure 16: Sectoral labor productivity of Vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS t to 5.1 Conclusions ng hi (1) Except Korea and Malaysia, others Asian developing countries are all in ep the first phase of structural transformation Agriculture sector trends to decrease once GDP per capita increases Industry sector trends to increase once GDP per w n capita increases Service sector increases once GDP per capita increases; lo ad (2) The threshold of structural transformation from the first phase to the y th second phase is when GDP per capita equals US$ 6,600 per person At that level, ju yi sectoral share of agriculture, industry, and services reach 7%, 45% and 48% pl repectively; al n ua (3) Asian developing countries including Vietnam are not all followed the va same process and are not homogeneity of structural transformation; n (4) Compared to Malaysia, Thailand and the Philippines, the share of fu ll agriculture in GDP of Vietnam is still high and is the highest in the four countries oi m The share of services in GDP of Vietnam is always the lowest in the four studied nh at countries; z (5) The rate of labor distribution in the agricultural sector of Vietnam is high z j ht vb compared to Malaysia, Thaland, and the Philippines and in the opposite direction, the rate of labor in services of Vietnam is low compared to Malaysia, Thailand, and m k the Philippines; gm (6) Labor productivity in all three sectors of Vietnam are lower than Malaysia, l m co Thailand, and the Philippines but the most inefficient is agricultural sector, followed by the service and industrial sectors an Lu 5.2 Recommendations n y te re recommendations to the policy makers of Vietnam: va Basing on the findings of this research, I would like to propose the following 34 (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (1) The share of agriculture sector in total GDP of Vietnam is high, the employment share in agriculture is very high and the labor productivity in t to agriculture is the least efficient, therefore the government should focus and consider ng hi on rural development such as selection advantage of crop and livestock in order to ep improve productivity in agriculture sector therefore release labor from agriculture sector to industry and service sector which are inherently more efficient; n w lo (2) Since the industry sector of Vietnam has successfully catched up, the ad government should consider maintaining the growing of this sector, at the same y th time continue to promote policies of industrialization, modernization, and ju yi equitization to increasingly improve the performance of the industry compared to pl other countries; al n ua (3) Because the service sector of Vietnam is still in low position in va comparirion with others ASEAN countries, the government should further expand n the market for services, further diversify for its products in services sector; fu ll (4) Vietnam's agricultural labor rate is very high, the percentage of workers in oi m the service sector is still low, and the performance of the whole three sectors are nh at still lower than in other countries, therefore the government should research policies z to promote the restructuring of labor between sectors and especially to strengthen z j ht vb vocational education policies (human capital investment) to improve labor productivity of Vietnam; m k (5) Since the GDP per capita of Vietnam is low, the government should gm encourage enterprises focus and invest on new technology to improve productivity m co l output of all sectors special in agriculture and services; (6) The employment share in agriculture is going to decrease, employment an Lu shares in industry and service sectors are going to increase corresponding, and n va therefore the government should consider migration and urban development y te re policies 35 (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam (Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam(Luận.văn).structural.transformation.and.economic.growth.of.asia.developing.countries.and.vietnam