Topic implementation of vietnam to the asean economic community

`NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ADVANCED EDUCATION PROGRAMS International Economics TOPIC: IMPLEMENTATION OF VIETNAM TO THE ASEAN ECONOMIC COMMUNITY Nguyễn Việt Trinh 11208204 Tơ Hạnh Trang 11208153 Hồng Linh Giang 11205009 Phạm Thị Nhã Phương 11206621 Tăng Việt Dũng 11200930 Lại Hà Trang 11207196 Nguyễn Thị Ngọc Anh 11200285 TABLE OF CONTENTS OVERVIEW .2 I ASEAN Economic Community Definition 2 Characteristics Purpose II Overview labour market in Viet Nam III Compare labour market in VN with other countries participate in AEC Quantity .4 Quality .7 V Challenges .10 VI Recommendations to the Vietnamese government when implementing the AEC 11 Requirements of AEC in terms of labors' quality on this VNese labours 11 Recommendations 12 CONCLUSION 14 REFERENCES 15 OVERVIEW ASEAN Economic Community, abbreviated: AEC is a regional economic block of 10 ASEAN member states that was officially established on December 31, 2015, when the declaration of establishment officially took effect The AEC is one of the three important pillars of the ASEAN Community to realize the goals set out in the ASEAN Vision 2020 The remaining two pillars are: the ASEAN Security Community and the ASEAN SocioCultural Community I ASEAN Economic Community Definition The ASEAN Economic Community is one of the three important pillars of the ASEAN Community to realize the goals set forth in the ASEAN Vision 2020, and reaffirmed in the Declaration of ASEAN Concord (Bali Declaration II): Create a stable, prosperous and highly competitive ASEAN economic region, where there is free movement of goods, services and investment, freer movement of capital flows, co-ordinated economic development equality and poverty reduction, narrowing socioeconomic disparities Initially, the idea of establishing AEC was just a continuation and expansion of the liberalisation commitments that ASEAN had made within the framework of the ASEAN Free Trade Area (AFTA) since 1993 Characteristics Although called "Economic Community", the AEC cannot actually be considered as a cohesive economic community like the European Community (EC) because the AEC does not have a strict organisational structure and regulations, regulations are as binding and clear as EC The AEC is a regional economic integration process, not an Agreement or an Agreement with binding commitments Participating in the goals of the AEC are a series of Agreements, Agreements, Programs, Initiatives, Declarations among ASEAN countries related to these goals The AEC is essentially a guide to the goals of ASEAN countries through the gradual implementation of four goals The realisation of AEC has been carried out in the past through the implementation of commitments in specific trade agreements signed between ASEAN countries In addition, the implementation of AEC will still be carried out soon Purpose The AEC is essentially a guide to the goals of ASEAN countries through the gradual implementation of four goals: ● A single school and a common production base ● A competitive economic region ● Economically balanced development ● Integration into the global economy II Overview labour market in Viet Nam Vietnam has one of ASEAN’s largest labour markets, whose strength is approximately 56 million people, and with a labour participation rate of 76 percent Due to the developing nature of the workforce in Vietnam, it is natural that there exists some difficulty in finding highly skilled employees — only 12 percent of Vietnam’s workforce are considered highly skilled Manufacturing (16 percent of GDP), services (51 percent), and agriculture (14 percent) are the three largest industries in the country, and they employ a large portion of the workforce In Mar 2022, the unemployment rate was 3.56 percent The labour force is concentrated in many areas throughout the country, including the Hanoi, Hai Phong, Da Nang, and Ho Chi Minh City Since Vietnam joined the WTO in 2007, the structure of the Vietnamese labour market has drastically evolved With an annual decreasing rate of 5.89 percent, elementary occupations dropped from 61.7 percent of the total to 39.98 percent (according to GSO the Report on a survey on Vietnam labour supply and employment) Due to the government's attempts to reform institutions, there was a significant decrease in the demand for unskilled labourers The percentage of workers in all other professions has increased Jobs requiring simple to medium levels of expertise, such as market salespeople, competent agricultural or machine operators, and assemblers, expand far more quickly than jobs needing higher levels of skill The workforce in Vietnam between the ages of 15 and 39 years old now makes up about half of the total labour force The percentage of trained workers in the population of working age was projected to increase to 21.5 percent in 2022 from 20.6 percent in 2021 Around 60 million individuals make up Vietnam's labour force, which is growing by more than one million people year Generation Y, born between 1976 and 1995, accounts for 35% of the Vietnamese worker supply Nearly 95% of the labour force is literate, with over 88 percent of those enrolled in secondary education, percent of whom are fluent in English and over 10% of whom are regarded highly competent 42 percent of this workforce is employed in agriculture, 35 percent in the service sector, and 23 percent in industry These results suggest that education and training in Vietnam can assist people in finding quality jobs and escaping the informal economy III Compare labour market in VN with other countries participate in AEC Quantity The association has the third largest labour force in the world behind China and India Current World Bank estimates place ASEAN’s labour force at 350 million in 2020 and predicts that the labor force will increase to 385 million people by 2030 Economic growth is impressive - this translates to an immense potential in labour a Compare the labor force of countries by year Country 2018 2019 2020 2021 Vietnam 55.5 55.9 55.89 56.15 Thailand 39.03 38.78 39.04 39.05 Singapore 3.49 3.54 3.45 3.27 Philippines 43.43 44.68 41.97 43.83 Malaysia 15.52 15.89 16.09 16.28 Laos 3.68 3.75 3.79 3.86 Indonesia 133 136.2 136.46 139.16 Cambodia 9.09 9.22 9.19 9.36 Myanmar 24.32 23.82 23 22.47 Brunei 0.22 0.22 0.22 0.22 The table above illustrates the difference between ASEAN countries in terms of labor quantity from 2018 to 2021 Indonesia, Vietnam and Philippines are the three countries with the most abundant human resources in all years As the figures show, the labor market in Vietnam, Thailand and other “emerging asia” countries getting bigger over the given time, while Singapore and Myanmar are the opposite Philippines and Cambodia labor forces has fluctuated from 2018 to 2021 It is also worth noticing that the labor market of Brunei is remain unchanged b Compare the labor force of countries by fields Countries Fields Agriculture Industry Service Total Brunei 1.3 16.1 82.6 100 Campuchia 30.4 26.9 42.7 100 Indonesia 7.75 82.4 7.27 100 Laos 68.0 9.1 22.9 100 Malaysia 11.1 27.3 61.6 100 Document continues below Discover more from: International Business I Đại học Kinh tế Quốc dân 39 documents Go to course C3-TT8-N8 - Nạn tham nhũng Singapore 18 International Business I 100% (4) Chapter Closing case International Business I None Detroit Bikes - IB assignment International Business I None Chapter Closing case International Business I None Int Biz Course Syllabus Fall 2022 International Business I None Writing - Vietnam, with less than one-tenth China’s population, is already running into International Business I None Myanmar 50.1 16.0 33.9 100 Philippines 25.2 18.3 56.5 100 Thailand 30.7 23.6 45.8 100 Singapore 0.5 16.6 82.9 100 Vietnam 39.8 25.8 34.4 100 The data in Table given show the quantity of Vietnam's human resources today has not kept up with the economic restructuring economy, the proportion of workers in the agricultural sector accounted for a high proportion of nearly 40% in 2018, while Industry contribute to GDP only 25.8% and Service contributed 34.4% Compared with countries in other ASEAN region such as Brunei, Singapore, the Philippines, and Malaysia, the figures for the field of crop and agricultural sector accounted for inconsiderable amount, such as Brunei in the agricultural sector account for only 1.3%, in Malaysia is 11% and Singapore is 0.5% c Labor force - participation rate Vietnam had a high rate of labor participation in ASEAN In 2015, this rate of Vietnam is 77.2% which behinded only Cambodia (79.6%) and became the country having the highest labor force participation in 2018 with 75.6% The labor force participation of other countries in ASEAN were in the range from 65% to 70% according to ILO Quality a About the education level of workers This is a crucial indicator of both the quality of human resources and the degree of socioeconomic development By this standard, the majority of workers in ASEAN nations only have a basic level of education A large percentage of people receive primary and lower secondary education, with rates as high as 68.7% in the Philippines, 60.9% in Myanmar, and 53.8% in Vietnam With a range of to 35%, workers with a university degree or higher are still in the minority, with Singapore alone having the highest percentage at 35.7% Vietnam has a rate of only 12.2%, in contrast Education level of countries in the ASEAN region according to UNESCO's International Classification of Educational Qualifications (ISCED) 2019 Nations Below Based Middle Advanced Unknown based education education education education education level salary level level level 58,0 7,5 27,6 21 43,5 8,5 4,9 21,2 30,2 20,1 21,2 6,0 12,2 13,2 23,4 9,0 25,0 15,9 35,7 12,2 level Brunei 4,4 16,5 Campuchia 32,8 43,2 Indonesia 16,8 43,5 Laos 9,9 55,8 Malaysia 2,7 30,5 Myanmar 21,6 60,9 Philippines 1,4 68,7 Thailand 23,6 38,5 Singapore 10,6 23,6 Vietnam 13,9 53,8 (Source: ILO: https://ilostat.ilo.org/) 10,5 0,1 0,7 b In terms of professional and technical qualifications In addition to the cultural level, the quality of human resources is also reflected by the professional and technical qualifications, which are reflected in the quantity, rank, and structure of trained workers According to table above, there are generally more workers with average labor skills than highly skilled workers in ASEAN nations Only in Vietnam workers have an average skill level of 53.88%, placing it second only to Thailand However, only 25.25% of workers have high skills, with Singapore having the highest rate at 58.69% Thus, despite having a large and youthful labor force, our country's workers still have a low level of technical knowledge and skill Percentage of skilled workers in ASEAN countries in 2018 Nations Brunei Campuchia Indonesia Laos Malaysia Myanmar Philippines Thailand Singapore Vietnam Low skill 17,65 33,81 29,63 10,61 15,33 40,10 33,79 19,12 8,19 20,87 Average skill 38,24 48,14 50,75 41,01 53,73 48,15 47,97 56,86 33,12 53,88 High skill 44,11 18,05 19,62 48,38 30,94 11,75 18,24 24,01 58,69 25,25 c About labor productivity Vietnam has a high labor productivity growth rate in the ASEAN region and has seen significant improvements in labor productivity over time The region's lowest labor productivity is still found in Vietnam, though The World Labor Organization (ILO) reports that in 2018, Vietnam's labor productivity was 3,312 USD/person/year, which is 30 times lower than Singapore's, 3.3 times lower than Thailand's, and twice as much as the Philippines' The ILO predicts that if the current growth rate is maintained, Vietnam won't overtake the Philippines until 2038, and that by 2069, its workers' labor productivity will be able to catch up with Singapore's Trend of labor productivity of agricultural sector in ASEAN IV Opportunities Opportunities to potential market ASEAN has a total GDP of over $2.7 trillion, growing at an average of 5%-6% annually The population is nearly 700 million people, with a relatively young population structure The average income per capita is over 3000 USD/person/year The AEC with the liberalisation of the movement of goods and services within the ASEAN region will encourage greater business activities and investment in the region Vietnamese enterprises will invest more in production, business and service activities than in other countries in the ASEAN region This is a good opportunity for Vietnamese enterprises to seize the opportunity to expand the market Opportunity to expand export Since joining ASEAN, Vietnam's exports to ASEAN have always kept a large proportion of the total value of exports When the AEC is formed, Vietnamese businesses can sell goods to ASEAN countries almost like domestic sales This is one of the advantages for the movement of goods of businesses Moreover, import and export procedures will be less cumbersome and the reform of origin procedures, moving towards allowing enterprises to self-certify origin will also create favourable conditions for enterprises to clear goods to other countries of ASEAN market Opportunity to attract investment sources According to the report on socio-economic situation in August and months of 2022 just announced by the General Statistics Office, the total foreign investment capital registered in Vietnam as of August 20 (including: newly granted capital, adjusted registered capital and the value of capital contribution and share purchase by foreign investors) reached nearly 16.78 billion USD The AEC will also help Vietnam better improve its business environment, from customs and administrative procedures to creating more balanced investment incentives Attracting more investment means that the technology transfer process takes place faster and more actively, contributing to improving the quality of industrial products, creating momentum for Vietnam's industry towards a balanced development with other industries V Challenges Vietnam lacks highly skilled technical personnel Vietnam's labor productivity is only half that of Malaysia and Thailand In addition, because of the low starting position, agriculture continues to dominate the economy, which results in a low participation rate for labor in the official labor market Only 40% of human resources have formal employment agreements; the remaining 60% are independent contractors When compared to the needs of development and integration, the quality and structure of the workforce are still insufficient Foreign languages Vietnamese people are known for their diligence, inventiveness, and innovation, yet these qualities will also "sleep," or cease to exist, if they are not shared or communicated with a manufacturing company The labor market information system suffers from a number of flaws and restrictions Although the labor market is currently open and free of barriers, the labor market information system appears to be divided, organized by province, and lacking in sharing across regions, regions, and the entire nation Additionally, the system's capacity to cover, gather, and provide information has not been able to meet the needs of partners in the labor market, particularly employers and employees As a result, the "bottlenecks" in the domestic human resource demand and the current state of the labor supply and demand have not been evaluated Population aging Vietnam's population is expected to age in the upcoming years, which would eventually eliminate the benefit of a young labor force Climate change Another issue is that climate change will have a significant impact on the economy, leading to a severe drop in particular industries and competitive advantages 10 VI Recommendations to the Vietnamese government when implementing the AEC Requirements of AEC in terms of labors' quality on this VNese labours Undertake rigorous training, certifications, and industry-specific job experience  Vietnam's greatest advantage is its large worker force and young labor structure According to the General Statistics Office, the labor force aged 15 and over in Vietnam was 53.8 million individuals by mid-2014, with 47.52 million people of working age Agriculture, forestry, and fishing employ 47.1% of the workforce; industry and construction employ 20.8%; and the service sector employs 32.1%  Due to a low starting position, the economic structure is still primarily agricultural, therefore labor participation in the formal labor market remains low, at around 30% The shortage of necessary skills for Vietnamese workers is much more serious than those from other ASEAN countries," Nguyen Thuong Lang, a professor at the National Economics University said Labor quality and structure remain inadequate in comparison to the needs of development and integration Approximately 45% of agricultural employees are untrained Our country's human resource quality remains low, which is one of the "bottlenecks" impeding developments Foreign language  In addition, it is difficult to require a skilled workforce to adapt to the new working environment For example, only in terms of foreign language training in Vietnam, especially in big cities, very few Vietnamese workers learn Thai, Lao, Cambodian or other ASEAN languages, so the ability to adapt to a difficult new working environment Furthermore, low English language skills have an impact on competitive work chances High - productivity labor  According to the Labor Rating Index (CWI) ranking conducted by ManpowerGroup on 75 countries in 2016, Vietnamese workers only ranked 45/75 in terms of labor productivity, 47/75 in terms of labor discipline observance, labor and labor costs ranked 7/75 This figure shows that Vietnamese workers are cost 11 competitive but low productivity But in recent years, from 2011 to 2019, Vietnam has recorded the highest average productivity growth rate in ASEAN, up to 4.87% Recommendations 2.1 Realization of economic innovation:  The Government must step up the improvement of the market economy institution, eliminate all discrimination against non-state economic sectors by changing the way the National Assembly makes laws and actively promulgating laws which suitable to economic institutions  Vietnam needs to make efforts in reforming domestic regulations such as simplifying administrative procedures, systematizing and adjusting laws which are ineffective or inconsistent In addition, the Vietnamese Government needs to support businesses to reduce business transaction costs through cutting production input costs and providing services in the shortest possible time 1.2 Strengthen propaganda, raise awareness about AEC:  Employees need to be well prepared to meet the employer's expectations That is, in addition to good training programs in Vietnam, Vietnamese workers need to learn more international qualifications that are widely recognized in the ASEAN region and globally These international qualifications are passports for Vietnamese workers to work in other ASEAN countries  At the same time, the government should study, reorganize vocational training institutions, and create education programs to better meet the demands of regional and global integration and to enhance the professional capacity, foreign language proficiency, life skills, and health of domestic workers for effective participation in the ASEAN labor market 2.3 Improve the quality of human resources:  Raise awareness about the role and position of vocational training in the country's human resource development strategy for the period 2021 - 2030 Also give priority to investment in vocational training in each socio-economic development program and project of localities, regions and branches  Promote international cooperation in vocational training, especially with countries that are successful in vocational training development in the ASEAN region and in the world, actively participate in regional and international activities to exchange and learn experiences 12 2.4 Promote infrastructure construction:  A trans-ASEAN infrastructure network through calling for investment and funding will synchronously develop a network of transport, information, and secure transactions between members and the world 13 CONCLUSION Following our analysis, we have concluded that Vietnam's membership in the ASEAN economic community is a remarkable and completely correct move It has set the groundwork for Vietnam's economic growth However, Vietnam still has a lot of work to in order to compete with other AEC nations, the most essential of which is improving labor quality Vietnam has the potential to grow rapidly in the international market if the existing issues can be resolved 14 REFERENCES Hiệp hội nước Đông Nam Á (ASEAN) hình thành Cộng đồng kinh tế ASEAN (AEC) Retrieved July 2, 2018 from https://vietnamfinance.vn/hiep-hoicac-nuoc-dong-nam-a-asean-la-gi-su-hinh-thanh-cua-cong-dong-kinh-te-asean-aec20180504224208962.htm Bức tranh toàn cảnh nhân lực Việt Nam Retrieved May 1, 2022 from https://www.vietnamplus.vn/buc-tranh-toan-canh-ve-nhan-luc-o-viet-nam-nhieu-diem-tichcuc/787618.vnp Tình hình lao động việc làm có nhiều chuyển biến tích cực Retrieved April 12, 2022 from https://www.mpi.gov.vn/Pages/tinbai.aspx?idTin=53714&idcm=188 Tình hình thu hút đầu tư nước ngồi việt nam tháng đầu năm 2022 Retrieved June 7, 2022 from https://fia.mpi.gov.vn/Detail/CatID/457641e2-2605-4632bbd8-39ee65454a06/NewsID/901567d4-a6da-4326-a223-830ce1ebdd05/MenuID Vốn FDI thực tháng cao kỷ lục năm qua Retrieved August 29, 2022 from https://baochinhphu.vn/von-fdi-thuc-hien-8-thang-cao-ky-luc-trong-5-nam-qua 102220829102702755.htm#:~:text=Theo%20B%C3%A1o%20c%C3%A1o%20t %C3%ACnh%20h%C3%ACnh,g%E1%BA%A7n%2016%2C78%20t%E1%BB %B7%20USD Labor force - Country rankings from https://www.theglobaleconomy.com/rankings/labor_force/ASEAN/ 15 SIGNATURE OF GROUP 3’ MEMBERS Nguyễn Việt Trinh Tô Hạnh Trang Phạm Thị Nhã Phương Nguyễn Ngọc Anh Hoàng Linh Giang Lại Hà Trang Tăng Việt Dũng 16