Human Resource Landscape in Mainland ASEAN

93 While Myanmar continues to grow rapidly, it is faced with many HR-related challenges. The region’s diversity and complexity make things harder for companies that do business in the region. Organizations will need to focus on cultivating a keen understanding of market practices, encouraging continuous innovation and operating within corporate guidelines to be successful. 5.
Role of the Private Provision of Human Resource Training Demand for skills training is increasing beyond that which governments of developing countries can provide. Additional training provision, new approaches to skills acquisition and diverse sources of funds must be found. Just doing more of the same is not an option. The private sector has a crucial role to play. Interventions by global companies are often effectively facilitated by donors, governments or NGOs. Before investing in skills development employers prefer to see the benefits likely to accrue and require a favorable business environment with minimal bureaucracy. Their engagement is most effective if it starts early in the planning process and results from them being proactive. The most development programs including soft skills and technical skills required for the informal labour market as well as, for disadvantaged groups, should include incentive structure. Earning opportunities, such as apprenticeships, with formal recognition of the competencies gained. providers have a their provision can be assured. On the one hand the demand for skilled labour is high in Myanmar; however, there are not enough trained workers to meet the needs of the job market. On the other hand, youth and young adults want to learn new skills that will lead them to more employment opportunities. Our teams in Myanmar work to address this gap and make sure young people learn skills that will lead them to get jobs. Because of HR’s central role in the workforce planning process, HR professionals are also at the heart of the development of their organizations’ training strategies. The development of these strategies is a natural outflow of workforce planning and, in fact, one of its main steps. While workforce planning begins with the analysis of supply and demand and the identification of any gaps between the two, one of its final stages is a solution analysis that outlines a plan to address gaps in both current and future skills and staffing needs. Although the plan may involve retention and recruiting tactics, it invariably also focuses on training and development. Just as workforce planning must be an ongoing activity to be truly effective, the process of employee training and development planning must also continuously take into account any changes in the internal and external environment that may affect job performance and bring about the need for learning and training interventions. However, in practice, investments in training and development can often be put on hold or even eliminated altogether, especially during times of downsizing and cost-cutting. In this kind of belt-tightening environment, skills gaps can often creep up unexpectedly. Without a budget to invest in training, the processes of job analysis—the systematic study of jobs to determine which activities and responsibilities they include, and the skills needed to do them well—and skills audits may be less likely to occur. Yet, it is precisely during

94 such times that HR professionals, and their businesses, benefit most from performing such assessments because they need solid data to make their best case for investments in employee training and development. Despite having a big workforce, Myanmar is currently facing shortages of skilled workers. Myanmar Business Survey 2014 cites a lack of skilled labour in Myanmar as one of the biggest obstacles to start a business. In order to maximize learning and employment for Myanmar, which is defined as follows: Learning and Employment theme spans, among other things, economic participation, over education and under education relative to available job opportunities and the nature and quality of employment in each country? The Learning theme points to the transition from primary through to vocational and tertiary level education, the quality of that education, as well as opportunities for learning in the workplace— whether through formal courses or the day-to-day, on-the-job acquisition of tacit know-how in a complex working environment. Countries should aim to maximize human capital outcomes across both themes. The challenge lies not only in equipping a nation's workforce with the timely and relevant knowledge and skills but also in deploying these skills in high-quality jobs throughout all age groups. Moreover, as both the demand and supply of skills and jobs migrate to a digital environment, there is a new horizon for understanding Learning and Employment. The emergence of digital talent platforms and advances in big data analytics increasingly make it possible to complement standardized international statistics to understand a country's evolving skills requirements and labour market changes in near-real time. To prepare talent for the new era of industrial development in Myanmar, businesses must re-think their role as a consumer of ‘ready-made' human capital and instead work with educators and governments to help education systems keep up with the needs of the labour market. Some companies understand this and are already investing in the continuous learning, re-skilling, and up-skilling of their employees, but most employers still expect to obtain pre-trained talent from schools, universities and other companies. One important part of the solution is to look beyond formal qualifications, job titles and functions to reveal implicit skills and possibilities for re-skilling and up- skilling, especially in areas where there are global skills shortages and hence unmet demand. 5.1
Selected Examples of Private Human Resource Training Initiatives The selected examples of private sector initiation are as follows: (1)
Telenor MBA Scholarship program (An online application for scholarship in 2018). It is part of Telenor Myanmar’s corporate responsibility mission on education and building foundations towards digital Myanmar. Any Myanmar citizen who has graduated with strong academic merit, with financial needs, and passionate to contribute to the improvement of a business, social, or public organization using ICT/technology as a sustainable solution can apply for the Telenor MBA Scholarship is eligible for the program

95 (2)
Some leading Training Providers in Myanmar The CVT19 The CVT is a non-profit vocational training provider in Yangon that has offered 3-year vocational education courses since 2002. Its objective is to offer young people in Myanmar vocational education that responds to the needs of the labour market. Its role is comparable to that of a secondary vocational school in the dual system of vocational education in Switzerland. Vocational education courses are currently provided for five occupations: Commercial Assistant, Electrician, Cabinet Maker, Hotel & Gastronomy Assistant and Metal Worker. The approach is based on the Swiss dual apprenticeship model. The participants are employees of \"partner companies\", private enterprises in Yangon, where they work most of the time in their respective profession. CVT complements the practical knowledge the students get at their workplaces with theoretical aspects during one school day per week. In addition, CVT organizes practical training courses of about two to three weeks per year for the students. The curriculum includes both general education as well as job-related subjects including practical aspects that they do not come across at their training companies. After three years, the students verify their competencies in final exams. Successful graduates receive a CVT certificate. All courses are free of charge for the students. CVT is financed by the \"Förderverein für Berufsbildung in Myanmar\" a registered NGO based in Sarnen, Switzerland which is mainly funded through Swiss donations. The centre also receives financial support from SDC and the Myanmar government contributed facilities and land for a new school building. The Swiss management board and experts provide their services as volunteers. Currently CVT employs 31 part-time and full-time teachers who train 575 students in 25 classes. It maintains a network of more than 500 \"partner companies\". In addition to the 3-year vocational education courses CVT offers courses in entrepreneurship, courses for instructors and an orientation program for out-of-school youngsters. ILO MSME Projects20 From 2014-2017 the ILO carried out two projects to support entrepreneurship and Micro, Small and Medium Sized Enterprises (MSME) development in Myanmar with funding from the Norwegian Agency for Development Cooperation (NORAD) and the Swiss State Secretariat for Economic Affairs (SECO). These projects aimed to support MSMEs in both urban and rural areas to start-up and grow through business management 19 “Apprenticeship and Company-based Training in Myanmar” “Working Paper” “Employment Opportunity Sector Working Group, led by the Ministry of Labour, Employment and Social Security (MOLES)” Yangon, January 2016 20 http://siyb.com.mm/en/about/

96 training. By their completion in October 2017, these projects had trained a network of 1000+ trainers via 400+ partners organizations and over 20,000 entrepreneurs. Start and Improve Your Business (SIYB) SIYB is developed by the International Labour Organisation (ILO) as one of the largest global business management training programs designed for micro, small and medium enterprises. It focuses on stimulating start-ups as well as improving existing enterprises by providing essential and practical business management skills. Successfully implemented in over 100 countries around the world, the program was launched in Myanmar in 2014. The SIYB methodology uses action learning and peer-to-peer sharing, and encourages trainees to adopt systematic and innovative business practices. Three SIYB packages have been introduced in Myanmar; Generate Your Business Idea (GYB), Start Your Business (SYB) and Improve Your Business (IYB). The package consists of six modules: Marketing, Record Keeping, Buying & Stock Control, Costing, Business Planning and People & Productivity. Target Groups are the existing Small and Medium Entrepreneurs in all sectors; the Business Development Service providers (BDS) and training institutes The IYB trainers come from more than 200 different organizations, including business development service providers and training institutes. This helps to greatly expand the outreach of SIY training. By November 2017, around 548 Trainers and 39 Master Trainers were certified. Over 17,000 potential and existing entrepreneurs received one or more SIY training sessions. Active trainers providing regular training in all major cities and towns across Myanmar including Yangon, Mandalay, Taunggyi, Mawlamyine, Kalay, Magway, Pathe, and Myeik respectively. Generate Your Business Idea (GYB) and Start Your Business (SYB) The potential target for these programs are small and medium-scale entrepreneurs who are eager to start their own businesses. The training is designed to support such potential entrepreneurs in generating a feasible business idea and developing a comprehensive business plan that matches their capacities and the needs of the targeted market. GYB and SYB aim to increase the chances of success for start-ups, which will contribute to the creation of more decent jobs. Target Groups are potential SMEsEs in all sectors and Business Development Services (BDS) providers and training institutes. By November 2017, 1090 Trainers and 39 Master Trainers had been trained. Over 4,600 potential and existing entrepreneurs received either GYB or SYB training. Active trainers providing regular training in all major cities and towns across Myanmar including Yangon, Mandalay, Taunggyi, Lashio, Kyaing Tong, Loikaw, Mawlamyine, Hpa-an, Kalay, Magway, Pathe, n and Myeik respectively. (3)
The ILO’s Entrepreneurship and SME support Project Myanmar: A Partnership Initiations The program has successfully developed a partnership with Coca-Cola Myanmar to provide business management skills training to SMEs that retail Coca-Cola products. Coca-Cola Leht Li (Retail) Business Training which is based on the ILO's SIYB training methodology and aims to teach key business management skills. With the support

97 of Coca-Cola Myanmar, the new trainers have the opportunity to tap the network of over 150,000 retail businesses linked to Coca-Cola Myanmar's supply chain in both urban and rural areas across Myanmar. Target Groups are: Retail sector: Small and medium retail shop owners and managers The training program with the support of Coca-Cola (leading), Myanmar Retailers Association, Convenience Store Ltd, SME Development Department, under Ministry of Industry 125 trainers have been trained of which 51 trainers were certified by November 2017. With the funding of Coca-Cola, TOTs have been conducted in Mandalay, Taunggyi, Magwy Myitkyina and lower Myanmar, expanding the reach of the program. Sustaining Competitive and Responsible Enterprises (SCORE) A global enterprise training programs that teaches cutting-edge practices to increase productivity and quality, as well as improving workplace cooperation and safety. The global SCORE program has been adapted to meet the needs of SMEs in the food processing industry in Myanmar. The training process combines classroom training with on-site consulting to meet the individual needs of each company. Targets are small and medium food processing SMEs and trainers and consultants in the fields of productivity improvement, quality improvement, food safety, human resource management and occupational safety and health. By November 2017, 10 trainers had been trained in the SCORE for food processing SMEs methodology and 5 trainers had been certified. Workers from 9 factories have been trained in the SCORE for food processing SMEs training package. Entrepreneurship Development Network Asia (EDNA) Myanmar21 The Educational Organization and Social Enterprise. The EDNA Myanmar is an education program funded by Livelihoods and Food Security Trust Fund (LIFT) – the Grassroots Entrepreneurship Education and Pro-poor Enterprise Development Project. This Project is delivered in collabouration with the Entrepreneurship & Innovation Research Group (EIRG) at The University of Sydney Business School. In addition to the Grassroots Project, EDNA Myanmar works closely with universities across the country with its collabouration with the broader EDNA partners. This includes supporting business planning competitions with students from the National Management College and the Yangon University EPP program, working with universities in the dry zone on teaching, entrepreneurship, and supporting Ph.D. students with research projects. EDNA Myanmar has engaged with the Ministry of Commerce & Trade’s Information and Research Department and established the Ministry of Commerce - EDNA Myanmar Research Hub within the ministry. In addition, EDNA Myanmar has engaged with the SME Department, Ministry of Industries for DISI- DSME -EDNA Myanmar Entrepreneurship Education and Enterprise Development Initiatives. EDNA 21 www.ednamyanmar.com/en/sme-development-capacity-building-and-business-acceleration- workshop

98 Myanmar also supports pro-poor entrepreneurial businesses through education and business development initiatives for LVT (Local Vocational Training) graduates in the Mon and Kayin regions. This project is funded by the Swiss Development Cooperation (SDC) and Swiss Contact. In addition, EDNA Myanmar conducts fee-for-service engagements for the private sector and they are keen to expand their partnerships by working with reputable local firms for their CSR initiatives to benefit entrepreneurs in rural Myanmar. As of January 2017, EDNA Myanmar has launched paying courses in the Kachin, Sagaing and Meiktilla regions, with classes soon to open in the Ayewaddy region. Entrepreneurship education for start-up enterprises and job skill training can be available at reasonable fees for entrepreneurs as well as young graduates wanting quality education in rural Myanmar. The profits will be reinvested into the company to sustain future work. To date, EDNA Myanmar has delivered entrepreneurship education to nearly ten thousand entrepreneurs and is responsible for the enterprise start-up of over nine hundred enterprises and the growth of over two thousand enterprises. Myanmar Business Executive Association: LEAD Program22 A network of more than 2000 prominent business actors driven by 12 staff members, an office, a training center and 111 active members, business entrepreneurs and owners who want to contribute to Myanmar’s sustainable development through responsible business practices. It is a social enterprise, and an advocate for corporate social responsibility and a new way to think in business. Local Entrepreneurs Assistance and Development (LEAD) Program in one-year lengthy mentoring project proudly implemented by MBE with the help of USAID in the Bagan region. Over 70 owners of SME's from Bagan, Nyaungoo, Pakko, and Kyaukpadaung are actively participating in the project. Firstly, they are equipped with the necessary knowledge and skills such as Business Management, IT and Business English and then individually assigned mentors and MBE members to closely discuss with them their business development. The objective is from the local entrepreneur's development to the regional economic development. (4)
Local Private Training Centers23 There are over 100 private sector vocational/skills training providers (See Table 5). They are concentrated in Yangon, with a few operating branches in Mandalay. They offer courses on skills such as welding, metalwork, electronics, pipe fitting, motor mechanics, air-conditioning and refrigeration, carpentry, computing as well as tourism. The course duration varies by course and provider, ranging from 6 weeks to 3 years. Vocational training providers are themselves MSEs, having 5 to 10 full-time staff and 15 to 20 part-timers. The capacity of these training providers is between 300 to 2,000 trainees 22 https://www.mbemyanmar.com 23 Wijesena and Hakemulder(2014).

99 per year per provider. Most of these training providers have good relationships with industry, through which they arrange internships as part of their courses. Some providers run their own recruitment agencies that recruit technical staff for local and overseas employment. Most providers have followed the ASEAN standard formal curriculum that is well-recognized in the ASEAN region, including Myanmar itself. Several of the private sector training institutes that offer higher-level technical (engineering) training also offer their students courses in management related fields. This includes courses on Marketing Management, Human Resource Management, Business Administration, Accounting and Financial Management. These prepare students for professional exams such as City & Guilds (London), Chartered Institute of Marketing CIM (UK), and the Association of Business Executives (UK). The RUMFCCI organizes seminars from time to time on thematic management topics. These target their members who are mostly medium and large enterprises. The Women Entrepreneurs Association organizes training for its members on an ad hoc basis. Training conducted by other Chambers and associations appears to be insignificant. It can be generally concluded from the study findings that formal or regulated apprenticeships do not appear to be practiced in the upcoming private sector of the Myanmar economy. However, in-company skills development practices are found in the enterprises comprise elements of apprenticeships, though to different degrees. These features and elements can be built upon to develop the currently practiced in-company training gradually into more systematic apprenticeships over time. This can however not be done overnight and will take time and requires commitment, interest and support by both companies and the skills development sector. For more than three years there have been many forums discussing fundamental reforms of the TVET system in Myanmar. Among these fundamental reform discussions, but not limited to them, are the intention of the Ministry of Education to enact a modernized TVET Law, the intention to establish a Myanmar Qualifications Framework, as well as the activities of MOLES to operationalize the ESDL (2013). All the fora around these reforms require, inter alia, extensive participation of representatives of the private sector, i.e. organized employers and employees. Participation in the many meetings conducted by these forums is becoming a burden for employers and employers' organizations. Most of the private companies in Myanmar are quite young and mostly small and medium enterprises. Thus, skills development is just one challenge in an array of challenges that the enterprises are facing. Second, the primary objective of private firms is to deliver goods and services for profit. Staff development is a means to this end, and not an end in itself. More importantly, it is seen as a cost, mostly “unstructured initial on- the-job” training by pairing new employees with experienced employees. The enterprises that offer “structured or semi-structured initial training” are mostly companies with foreign ownership or closely related to foreign enterprises, enterprises providing “higher- end” products or services (e.g. in the hospitality sector). Most common forms of initial training provided in companies is attaching new recruits with experienced workers. Training should be adapted to local needs and circumstances. Most important is

100 availability in local languages and an emphasis on marketing-related skills and knowledge. Table 5: Number of Private Training Centers in Yangon Accountancy & Management Trainings 146 Baking Training 15 Banking Management Trainings 11 Business Management Trainings 120 Engineering Trainings 105 Languages (Chinese) 87 Languages (Korea) 97 Languages (English) 483 Languages (Myanmar) 11 Source: The Yangon Directory (2018) 6. Conclusion and Policy Recommendation This paper has pointed out the necessary condition for economic development in Myanmar. The human capital is not less important than the physical capital. In our paper, we have found that there is still imbalance between the demand and supply of skills. The qualification of skills labour would be a key issue in Myanmar for her contemporary development. As Myanmar is a late comer in the CLMV, her cheap labour cost is still necessary condition for international competitiveness. It is however not sufficient to reach a maximal growth and welfare for her people. The key issue is human capital and labour quality. The pathway to optimal growth would require a proper labour qualification framework. It is found that the Myanmar government has relied mostly on the supply provision from the educational system. The supply is not an adequate response to the demand signal from the labour market. Myanmar has also faced migration outflow to the international labour market. The qualified labour supply is scarce for domestic industrial and business development. The resource constraints in the educational system and public short-training have produced an opportunity for private initiation training. The training provision comprises mainly training for business and finance and technical training (TVET). The private provision is in its early stage in Myanmar. The excess demand for skills is still dominant in Myanmar for economic and industrial development. The study, has found that the TVET (Technical and Vocational Education and Training) in Myanmar is on its path to institutionalization. The cooperative efforts between government and private sector both domestic and international assistances need to be more effective. The whole TVET in Myanmar would need to be upgraded and customized to meet demand by international standards.

101 In business and finance training, there are many gaps in skills such as: organizational management skills as well as accountancy and finance; English language skills; information and communication technology skills; sales and marketing planning skills; and customer service respectively. For this, the Government may establish a coordinative body between public and private sectors to institutionalize the cooperation between demand and supply skills, identifying skills gaps, and promote the role of the private provision to add to the public roles. Due to the high-cost of technical training for the industry, Myanmar can solicit international cooperation with Official Development Assistance (ODA) in both bilateral and multilateral agencies. The skills qualification’s framework can follow the ASEAN initiative. The role of the private sector can be promoted with preferential privileges of training business cooperation between foreign firms in partnership with domestic providers in Myanmar. The professional qualification framework of TVET and professional business skills can be promoted through private provision to add on to the provision by government institutions.

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103 4 Human Resource and Labour Economic Landscape in Vietnam Vo Xuan Vinh24 1.
Introduction In 1986, Vietnam launched the Doi Moi ( renovation or reform) with ‘ the top priority is the renovation of economic policy, social policy in order to promote the ownership and enthusiasm of labourers’ . 25 After facing with challenges posed by the collapse of the Soviet Union and the disintegration of socialist countries in Eastern Europe as well as the domestic hurdles such as huge floods in Northwest region and Mekong river delta,26 Vietnam decided to ‘continue to speed up the renovation to highly promote potentials of labour and intellect, farmland and resources, capital and properties in each family, each group and the whole society’.27 Along with economic and social reforms, Vietnam also had remarkable changes in its foreign policy. Instead of focusing on cementing relations with socialist countries, Vietnam ‘ wants to be friend of all countries in world community, making efforts for peace, independence and development’ . 28 In 1992, Vietnam became the observer of the Association of Southeast Asian Nations (ASEAN) and official joined the Association in 1995. In the same year, the normalization in the relationship between Vietnam and the US officially took place when the two countries opened embassies in each other’ s capitals. Although the 1997- 98 Asian financial crisis did not have significant impact on Vietnam because of the latter’ s economic integration was in the initial period, the country’ s then rapid integration into regional and global economy has left demand for enhancing its human resource. Vietnam just participated in the free trade agreement ( FTA) process of regional economic integration in December 1995 when it ‘ signed the “Protocol for the Accession of the Socialist Republic of Vietnam to the Agreement on the Common Effective Preferential Tariff Scheme (CEPT) for the ASEAN Free Trade Area 24 Institute for Southeast Asian Studies, Vietnam Academy of Social Science, Vietnam. 25 Communist Party of Vietnam (2006). The Complete Collection of Party’s Documents, Vol.47. Hanoi: National Political Publishing House, p. 379. 26 Communist Party of Vietnam (2005). Party’s Documents in the Period of Renovation (VI, VII, VIII, and IX Congress) on Socio- Economic Development. Hanoi: National Political Publishing House, pp.163-164. 27 Communist Party of Vietnam (2005). Party’s Documents in the Period of Renovation (VI, VII, VIII, and IX Congress) on Socio-Economic Development.Hanoi: National Political Publishing House, p.168. 28 Communist Party of Vietnam (1991). Documents of the VII Congress. Hanoi: Suthat Publishing House, pp.146-147.

104 ( AFTA) ’ 29 but it now ranks no. 12 among 48 economies in Asia having FTAs in all forms listed by the Asia Regional Integration Center ( ARIC) in the early 2017. Among ASEAN economies regarding the FTA participation, Vietnam is among the five countries having the largest number of FTAs with 16 pacts, after Singapore ( 33) , Malaysia ( 22) , Thailand (22), and Indonesia (17) (See Table 1). Table 1: Vietnam’s Free Trade Agreements FTAs Current Situation Chile-Vietnam Free Trade Agreement Signed and In Effect Japan-Vietnam Economic Partnership Agreement Signed and In Effect Vietnam - Eurasian Economic Union Free Trade Agreement Signed and In Effect [Republic of] Korea-Vietnam Free Trade Agreement Signed and In Effect Vietnam-European Free Trade Association Free Trade Negotiations launched Agreement Vietnam-European Union Free Trade Agreement Negotiations launched Vietnam-Israel Free Trade Agreement Negotiations launched ASEAN Free Trade Area Signed and In Effect ASEAN-Australia and New Zealand Free Trade Agreement Signed and In Effect ASEAN-India Comprehensive Economic Cooperation Signed and In Effect Agreement ASEAN-Japan Comprehensive Economic Partnership Signed and In Effect ASEAN-People's Republic of China Comprehensive Signed and In Effect Economic Cooperation Agreement ASEAN-[Republic of] Korea Comprehensive Economic Signed and In Effect Cooperation Agreement ASEAN-Hong Kong, China Free Trade Agreement Negotiations launched Regional Comprehensive Economic Partnership Negotiations launched Trans-Pacific Partnership (TPP) Signed but not yet In Effect Source: ARIC (2017). Free Trade Agreements (FTA by Country/Economy). https://aric.adb.org/fta- country. Another indicator could help manifest the increasing integration of Vietnamese economy into international one which also requires the former’s efforts of improving the quality of the human resources, among others. Merchandise trade ratio to GDP of the country increased from 120 per cent to nearly 170 per cent after ten years, from 2005 to 29 ASEAN (2012, October 3). Vietnam in ASEAN : Toward Cooperation for Mutual Benefits. Retrieved from http://asean.org/?static_post=vietnam-in-asean-toward-cooperation-for-mutual-benefits

105 2015.30 Importantly, according to the data given by ASEAN Secretariat, among four ASEAN member states having merchandise trade’s largest ratios to GDPs, including Singapore, Vietnam, Thailand, and Malaysia, Vietnam’s indicators have the increase while the others have opposite trends, decreasing from 149.3 per cent to 127.4 per cent Malaysia), 285.5 per cent to 227.1 per cent (Singapore), and 120.6 per cent to 105.4 per cent (Thailand) from 2010 to 2015.31 Thanks to the political and social stability under the leading of the Communist Party of Vietnam (CPV), Vietnam has maintained a stable and high economic growth. After the economic reform in 1986, the GDP average growth rate in the late 1980s (1986- 1989) was at 4.29 per cent. The average growth reached 7.41 per cent and 7.26 per cent annually in 1990s and 2000s respectively. Although facing with difficulties of domestic and external contexts, Vietnam’s average economic growth in the period of 2011-2016 also reached 6.03 per cent. In short, from 1986 to 2016, average GDP growth of Vietnam attained impressive number, at 6.65 per cent (See Figure 1). Figure 1: Vietnam’s GDP Growth 1986-2016 (%) 12 10 8 6 4 2 0 GDP Growth (%) Source: General Statistics Office of Vietnam. As a result of high economic growth, GDP per capital (US$ current price) of Vietnamese has also seen the improvement in more than last two decades, from US$ 98.3 in 1990 to US$ 433.33, US$ 1,333.58, and US$ 2,185.69 in 2000, 2010, and 2016 respectively, grows 22.23 times after 26 years (1990 to 2016). (See Figure 2). 30 General Statistics Office of Vietnam. Retrieved at http://www.gso.gov.vn/SLTKE/pxweb/en/08.%20Trade,%20Price%20and%20Tourist/- /E08.18.px/table/tableViewLayout1/?rxid=5a7f4db4-634a-4023-a3dd-c018a7cf951d 31 ASEAN Common in Figures (ACIF) 2016, Jakarta, ASEAN Secretariat, December 2016, p.11. 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

106 Figure 2: Vietnam’s GDP per Capital (US$ Current Price)  22,0,15825.3.629  1,754.55   1,333.58 1,164.61  796.67  98.03 144.15 229.95 337.05 360.6 433.33 477.11 606.9                   GDP Per Capital Source: General Statistics Office of Vietnam. Vietnam has also gained notable progress in social and human development field. The poverty rate gained a significant decrease, from 37.4 per cent in 1998 to 14.2 per cent and 7.0 per cent in 2010 and 2015 respectively.32 Vietnam has fully achieved a number of the MDG targets such as: (i) eradicate extreme poverty and hunger; (ii) achieve universal primary education and (iii) promote gender equality. And the country has achieved positive progress in health-related indicators such as reducing the maternal and child mortality ratios. The country also achieved its target on malaria and tuberculosis control as well as combating the HIV/AIDS prevalence rate. Vietnam is on the way towards reaching targets in universal access to reproductive health services, improving maternal health. Great efforts will enable Viet Nam to complete other targets such as MDG 7 on ensuring environmental sustainability and MDG 8 on Global Partnership for Development by 2015.33 Life expectancy has a notable improvement, from 65.2 years in 1995 to 72.2 years and 73.3 years in 2005 and 2015 respectively.34 In terms of literacy, the percentage of 32 General Statistics Office of Vietnam. Retrieved at http://www.gso.gov.vn/SLTKE/pxweb/en/11.%20Health,%20Culture,%20Sport%20and%20Living%20sta ndard/-/E_11.34.px/table/tableViewLayout1/?rxid=5a7f4db4-634a-4023-a3dd-c018a7cf951d 33 Socialist Republic of Vietnam (2015, September). Country Report: 15 Years Achieving the Viet Nam Millennium Development Goals. Hanoi: Printing Joint Stock & Truong An Commercial Company. p. 12. 34 General Statistics Office of Vietnam. Retrieved at http://www.gso.gov.vn/default.aspx?tabid=714

107 literate population at 15 years of age and above also has progressive, from 93.6 per cent in 2006 to 94.9 per cent in 2015.35 Beside the positive economic and political aspects, human resource development of Vietnam after its reforms in 1986, especially after the Cold War has faced with notable challenges economically and environmentally. Although there have been progress in economic development, Vietnam economy in more than two decades has developed in low quality. Economic growth is heavily depended on outsourcing, with growth rates based on the added value of gross output that is much larger than the GDP growth rate. Importantly, the outsourcing-based economy is not only seen in the industrial but also in agricultural sector when Vietnam has been importing a large amount of fertilizers, pesticides, cultivar and livestock. In addition, the structure of sectorial growth is not suitable as the contribution of agriculture and services to growth tends to decrease significantly while the industry has high growth rates and a large contribution to GDP, the main contributors are still the outsourced industries such as electronic assembly while the processing industry using raw materials in the country is in the group of medium and low growth. By sector, growth contributes mainly to foreign invested sector, while the domestic sector, especially the private sector, is growing at a low rate. At the same time, the input structure of growth is still characterized by broad-based growth and growth driven by capital and labour. The contribution of total factor productivity (TFP) to growth is still low (only 23 per cent in 2011-2015) far below the target (30-32 per cent).36 Environmental downgrade is also a critical problem of Vietnam in more than last two decades. ‘Vietnam is among of 10 countries with the most polluted air in the world, the health of people is affected by the non-guaranteed air quality in Vietnam. According to the environmental performance index (EPI) in 2015, Vietnam ranked 79 in the total of 132 countries in the overall environmental assessment. However, the air pollution index, Vietnam ranked 123. On the burden of disease due to environment, Vietnam ranked 77’.37 Water pollution, among other is also a very critical problem in Vietnam today. According to the Ministry of Natural Resources and Environment: Up to 80% of diseases in Vietnam are caused by polluted water resources… Around six million Vietnamese people have contracted one of six water-related diseases over the past four years. The expenditures for cholera, typhoid, dysentery and malaria check-ups and treatment are estimated at VND400 billion ($20.9 million). Climate 35 General Statistics Office of Vietnam. Retrieved at http://www.gso.gov.vn/SLTKE/pxweb/en/02.%20Population%20and%20Employment/- /E02.26.px/table/tableViewLayout1/?rxid=5a7f4db4-634a-4023-a3dd-c018a7cf951d 36 Do Le (2016, January 1). Growth Quality: Challenges need to be solved (Chat luong tang truong: Nhung thach thuc can hoa giai). The Bank Times (Thoi bao Ngan hang). Retrieved at http://thoibaonganhang.vn/chat-luong-tang-truong-nhung-thach-thuc-can-hoa-giai-44647.html 37 Tuan Anh Hoang, Nam Xuan Chu, Trung Van Tran (2017, February). The Environmental Pollution In Vietnam: Source, Impact And Remedies. International Journal of Scientific & Technology Research. Volume 6, Issue 2, p.249.

108 change and rising sea levels will affect water resources and will be challenges for Vietnam to deal with in the coming years as the Southeast Asian country is listed among five countries that will be the hardest hit. Up to 1,000 communes in Vietnam’s Red River and Mekong Delta regions are facing high risks of arsenic-contained water sources. Vietnam has 180 processing and industrial zones, 12,259 healthcare facilities, 72,012 enterprises, which discharge hundreds of untreated wastewater cubic meters into its rivers a day.38 In short, the political stability, and high and stable economic growth along with the social progress in Vietnam after more than 30 years of reforms have created background in one hand and demanded the enhancement of human resource development in the other. In addition, issues created in the process of development such as low quality of development, and the environment downgrading have a significant impact on the HRD. 2.
Supply Side Analysis Once supply side of human resource development in Vietnam is analyzed, the guidelines of the Communist Party of Vietnam (CPV) and policies implemented by the government should be included. The human capital data of Vietnam should also be seen as a result of the CPV’s guidelines and realized by the government by policies among others. 2.1 The CPV’s Guidelines Policies on human resource development in Vietnam implemented have a close bond with the CPV’s guidelines. In other words, the policies implemented by the central government and provincial governments are the realization of the CPV’s guidelines. After the launching of Doi Moi in 1986, the reform process in Vietnam was promoted, especially since the 7th National Party Congress in 1991. Resolution of the 7th National Party Congress stated that ‘education and training policies focus on fostering human resources, upgrading people's knowledge and training talents, businessmen, administrators, technology experts and skilled workers who will be in charge of immediate tasks and prepare well for the country and young generation of Vietnam to enter the 21st century’.39 Policy on education and training in the resolution focused on enhancing quality and efficiency of education and training system, universalizing primary education, developing various forms of vocational guidance, renovating and modernizing curriculum and teaching methods to improve quality; socializing education and training, adopting special policies for the development of education and training in mountainous 38 VUFO-NGO Resource Centre. 80% of Diseases in Vietnam Caused by Polluted Water Resources. Retrieved at http://www.ngocentre.org.vn/content/80-diseases-vietnam-caused-polluted-water-resources 39 Communist Party of Vietnam (1991, June 27). Resolution of the 7th Congress of the Party: Adoption of the \"Strategy for stabilization and socio-economic development until 2000. Retrieved at http://www.uet.vnu.edu.vn/coltech/taxonomy/term/154/406

109 and ethnic minority areas, as well as increasing budget and other sources for education and training. Since then, human resource development has become an important factor in CPV’s guidelines. In 1993, the CPV issued the Resolution 04 - NQ/HNTW of Fourth Party Central Committee Meeting (of Party’s 7th Congress) on continuing education and training reform (14 January 1993). CPV’s guiding view in the resolution was aiming to improve people's knowledge, train human resources and foster talents.40 The role of human resource development became a priority in the CPV’s Orientations and tasks of the five-year socio-economic development plan 1996-2000 (Report of the 7th Party Central Committee at the 8th National Party Congress). In this document, the CPV acknowledged that one of the main tasks was to ‘actively prepare and create a firm foundation for a higher development step after the year 2000, mainly to develop human resources, raise the capacity of science and technology, build infrastructure and some key industries, and form synchronously the market mechanism under State’s management in the socialist direction’. Education and training were one of the programs of the Plan by whose objective was, among others, to train and upgrade the quality of human resources to meet the requirements of industrialization and modernization. Significantly, the Plan also underlined ‘to ensure regular expenditures at reasonable and economical levels, giving priority to the task of training human resources, raising the people's intellectual level, absorbing modern technologies, protecting the people's health, ensuring the national security and resolving pressing issues in social field’.41 In the Social-Economic Development Strategy 2001-2020 (Report of the 8th Party Central Committee at the 9th National Party Congress), the CPV continued considering human and human resource as decisive factors in the country's development in the period of industrialization and modernization. In the future direction, the CPV underlined the importance of the education and training as deciding to ……..extend the training of workers, technicians and professional staffs in various levels; develop and improve the quality of undergraduate and postgraduate education; concentrate on investing in the building of a number of national key universities on a regional basis and reaching the international level; develop regular education and distance learning; spend the budget to send good people to training in developed countries; encourage and facilitate study and research abroad; give priority 40 Communist Party of Vietnam (1993, January 14). The Resolution 04 - NQ/HNTW of Fourth Party Central Committee Meeting (of Party’s 7th Congress) on continuing education and training reform (in Vietnamese). Retrieved at http://dangcongsan.vn/tu-lieu-van-kien/tu-lieu-ve-dang/sach-ve-cong-tac- dang/doc-0925201510113646.html 41 Communist Party of Vietnam (1996). Orientations and tasks of the five-year socio-economic development plan 1996-2000 (Report of the 7th Party Central Committee at the 8th National Party Congress). Retrieved at http://dangcongsan.vn/tu-lieu-van-kien/tu-lieu-ve-dang/sach-chinh-tri/books- 11520162411956/index-3152016251425629.html

110 to train highly skilled workers, practical engineers and good traders; give priority to train human resources for agricultural and rural development, mountainous areas, labour export, and some key industries; develop and improve the quality of boarding schools for ethnic minorities; strengthen the training and fostering of ethnic minority cadres.42 At the same time, the CPV also consider ‘making a strong move in human resource development, focusing on education and training, science and technology’ as one of four breakthroughs in key fields.43 The CPV’s Social-Economic Development Strategy 2011-2020 determines that ‘rapidly develop human resources, especially high-quality human resources, with a focus on fundamental and comprehensive renewal of national education; to closely associate human resource development with the development and application of science and technology’ 44 is one of three breakthroughs in order to successfully implement the strategy. In short, since launching the reform in 1986, especially since the Cold War ended in 1991, the Communist Party of Vietnam has highly appreciated the importance of the human resource development, and released various guidelines to promote the HRD. 2.2 Policies of Vietnam’s Government In order to realize the CPV’s guidelines on HRD, the government of Vietnam has released policies in this field. To realize objectives of HRD in the Social-Economic Development Strategy 2001-2020, the Decision No. 201/2001/QD-TTg of December 28, 2001 Approving the Education Development Strategy 2001-2010 was promulgated by which the government prioritized to enhance the quality of human resources training, especially the high skilled scientific and technological human resources, the managerial cadres, the excellent business people and the skilled technical workers who directly contribute to raise the competitiveness of the economy. The strategy set to raise the rate of trained labourers at all levels up to 40% by 2010 by which 6% from colleges or higher, 42 Communist Party of Vietnam (2001). Social-Economic Development Strategy 2001-2020 (Report of the 8th Party Central Committee at the 9th National Party Congress). Retrieved from http://www.chinhphu.vn/portal/page/portal/chinhphu/NuocCHXHCNVietNam/ThongTinTongHop/noi dungvankiendaihoidang?categoryId=10000714&articleId=10038387 43 Communist Party of Vietnam (2001). Social-Economic Development Strategy 2001-2020 (Report of the 8th Party Central Committee at the 9th National Party Congress). Retrieved from http://www.chinhphu.vn/portal/page/portal/chinhphu/NuocCHXHCNVietNam/ThongTinTongHop/noi dungvankiendaihoidang?categoryId=10000714&articleId=10038387 44 Communist Party of Vietnam (2011). Social-Economic Development Strategy 2011-2020. Retrieved at http://dsi.mpi.gov.vn/Includes/Downloads/dt_23620111013_Chien%20luoc%20PT%20KTXH%202011 -2020.pdf

111 8% from technical colleges and 26% from technical workers. The completion of universalizing secondary education throughout the country was also targeted.45 By acknowledging the importance of HRD, Vietnam’s government released the Decision No.432/QD-TTG of April 12, 2012 on approving the Vietnam Sustainable Development Strategy for the period 2011 - 2020. In terms of HRD, the strategy focused on training human resources to meet the diversified and multi-tiered requirements of the technology and the development level of various sectors as well as training manpower to develop knowledge economy. Significantly, ‘developing human resource for sustainable development’ was one of eight priorities in the strategy, which implemented and concretized Vietnam Human Resources Development Strategy and Planning 2011-2020 with the motto of attaching importance to the development of human resources as a key and decisive factor in transforming growth model and sustainable development. The strategy also set objective to quickly develop high-quality workforce; closely combine human resource development and science and technology applications to restructure the economy, transform growth model, contributing to increase productivity, quality, efficiency and competitiveness of the economy.46 Before the Decision No.432/QD-TTG was released in April 2012, the government of Vietnam also promulgated Decision No. 1212/QD-TTg of July 22, 2011 approving the Plan for Vietnam’s Human Development for the period 2011-2020.47 The Plan set the objectives: - to quickly increase the percentage of trained human resources in the economy in various forms and levels, from 40 per cent in 2010 to 70 per cent by 2020, of which the proportion of trained human resources agriculture, forestry and fisheries increased from 15.5 per cent to 50 per cent; the industry from 78 per cent to 92 per cent, the construction industry from 41 per cent to 56 per cent; the service sector increased from 67 per cent to 88 per cent respectively; 45 Government of Vietnam (2001, December 28). Decision No. 201/2001/QD-TTg of December 28, 2001 Approving the Education Development Strategy 2001-2010 (in Vietnamese). Retrieved at https://thuvienphapluat.vn/van-ban/Giao-duc/Quyet-dinh-201-2001-QD-TTg-phe-duyet-Chien-luoc-phat- trien-giao-duc-2001-2010-48949.aspx 46 Government of Vietnam (2012, April 12). Decision No.432/QD-TTG of April 12, 2012 on approving the Vietnam Sustainable Development Strategy for the period 2011 - 2020 (in Vietnamese). Retrieved at http://chinhphu.vn/portal/page/portal/chinhphu/noidungchienluocphattrienkinhtexahoi?docid=1254&su bstract=&strutsAction=ViewDetailAction.do 47 Government of Vietnam (2011, July 22). Decision No. 1212/QD-TTg of July 22, 2011 approving the Plan for Vietnam’s Human Development for the period 2011-2020 (in Vietnamese). Retrieved at https://thuvienphapluat.vn/van-ban/Lao-dong-Tien-luong/Quyet-dinh-1216-QD-TTg-phe-duyet-Quy- hoach-phat-trien-nhan-luc-Viet-Nam-126974.aspx

112 - to synchronously develop higher and higher quality of human resources who are strong enough in all domains and at the same time focusing the priority on the fields of Vietnam having competitiveness advantages; and - to train a contingent of high-quality teachers educating qualified human resources for the country. The Plan also determined to develop human resource until 2020 based on: (1) levels of training; (2) sectors such as industry and construction, services, agriculture, forestry and fishery; (3) specific sectors such as transportation, natural resource and environment, tourism, banking, finance, information technology, nuclear power, labourers working abroad; (4) stakeholders participating in development such as leading officials; contingents of public servants, business, science and technology, teaching, medical, culture and sports, judicial, court, human resources for marine economic development, and armed forces; and (5) social-economic regions such as Northern Midlands and Mountains, Red River Delta, Northern Central and Central Coast, Highland, Southeast region; Mekong River Delta. In order to implement the Social-Economic Strategy 2011-2020 and Plan for Vietnam’s Human Development for the period 2011-2020, Decision 630/QD-TTg of May 29, 2012 Approving the Vocational Training Development Strategy 2011-202048 was released. According to the Strategy, by 2020, vocational training will meet the needs of the labour market in terms of quantity, quality, occupational structure and level of training; the quality of vocational training of some sectors reaches the standard of ASEAN and the world; there will be a contingent of skilled labourers, contributing to improving national competitiveness. More details, the strategy set the objectives of among others implementing vocational training to increase the percentage of trained workers to 40 per cent, equivalent to 23.5 million by 2015 and 55 per cent by 2020, equivalent to 34.4 million people. The measures were also charted out to deploy the strategy, including: renovating state management of vocational training; developing the contingent of teachers and vocational managers; establishing national qualifications framework; building curriculum, syllabus; strengthening material facilities and vocational training equipment; controlling and ensuring the quality of vocational training; linking vocational training with labour market and enterprise participation; raising awareness about vocational development; and promoting international cooperation on vocational training. Two years after the Decision 630/QD-TTg of May 29, 2012 approving the Vocational Training Development Strategy 2011-2020 was promulgated, the Prime Minister signed the Decision No. 761/QD-TTg of May 23, 2014 approving Project on 48 Government of Vietnam (2012, May 29). Decision 630/QD-TTg of May 29, 2012 approving the Vocational Training Development Strategy 2011-2020 (in Vietnamese). Retrieved at http://www.chinhphu.vn/portal/page/portal/chinhphu/hethongvanban?mode=detail&document_id=1596 47

113 Developing High Quality Vocational Schools to the year 2020.49 The project set the objective: ‘by 2020, there are about 40 high quality vocational schools capable of training a number of professions recognized by advanced countries in ASEAN or internationally, contributing to the fundamental and comprehensive renewal of vocational training in Vietnam and meeting high quality human resource requirements for socio-economic development of the country’. Recently, Vietnam Prime Minister has just signed Decision No.899/QD-TTg of June 20, 2017 approving the Career Education Program for Job-Employment and Safety in the period of 2016-2020.50 The program set the objective to support the development of vocational education, promote labour market development, improve the efficiency of labour supply and demand, create jobs, increase labour export, labour safety and hygiene to meet the requirements of national construction and development and international economic integration, promoting sustainable jobs attached with increasing labour productivity, improving working conditions, and increasing income and preventing work accidents. Detailed objectives of the program include supporting investment in facilities and equipment for vocational schools, synchronously investing about 100 key occupations, supporting high-level training on skills, foreign languages and specific occupations for about 8,800 labourers to bring about 6,200 people to work abroad under contract, and conduct consultation on employment policies and apprenticeship. In the framework of the program, two projects were to set, including ‘renovation and improvement of the quality of vocational education’, and ‘development of the labour market and employment’. In short, in more than the last two decades, Vietnam government has promulgated a significant number of policies on HRD, focusing on training enough human resource in quality and quantity to meet the demands of labour market both domestic and internationally. 2.3 Statistical Data on Human Capital In number, as a part of the tradition of having sons, especially in rural areas, Vietnam is having a large amount of population and in the trend of growth. Vietnam’s population has a significant growth, from nearly 53 million in 1979 to more than 76 million and more than 90 million in 1989 and 2014 respectively. According to the forecast of GSO Vietnam and UNFPA (2016), Vietnam’s population will reach nearly 110 million in 2049 (See Figure 3). 49 Government of Vietnam (2014, May 23). Decision No. 761/QD-TTg of May 23, 2014 approving Project on Developing High Quality Vocational Schools to the year 2020 (in Vietnamese). Retrieved at https://thuvienphapluat.vn/van-ban/Lao-dong-Tien-luong/Quyet-dinh-761-QD-TTg-2014-phe-duyet- De-an-phat-trien-truong-nghe-chat-luong-cao-den-nam-2020-230951.aspx 50 Government of Vietnam (2017, June 20). Decision No.899/QD-TTg of June 20, 2017 approving the Career Education Program for Job-Employment and Safety in the period of 2016-2020 (in Vietnamese). Retrieved at https://thuvienphapluat.vn/van-ban/Lao-dong-Tien-luong/Quyet-dinh-899- QD-TTg-2017-Giao-duc-nghe-nghiep-Viec-lam-An-toan-lao-dong-352512.aspx

114 Figure 3: Vietnam’s Population from 1979 to 2049 120,000,000 108,464,000 100,000,000 101,321,000 80,000,000 85,846,997 90,493,352 60,000,000 76,323,173 64,411,713 52,741,766 40,000,000 20,000,000 0 1979 1989 1999 2009 2014 2029 2049 Total Population Sources: Chart built based on various publications of GSO of Vietnam. Figure 4: Total Fertility Rate 2001-2014 Unit: per cent (%) Source: GSO of Vietnam and UNFPA (2016), Vietnam’s Population Forecast 2014-2049, p.11 By keeping the high fertility rate at more than 2 per cent/year for years (See Figure 4) and in several coming decades, the human resource in Vietnam is abundant which could meet the demand of HR for not only Vietnam but some other countries in the world, at least in terms of quantity.

115 Notably, there have been changes in the construction of population in working age. The population in working age from 15 to 29 has a significant decrease, from 31.9 per cent in 2010 to 25.5 per cent in 2016. In contrast, the ratio of the population in the ages from 50 and higher has a notable increase, from 20.3 per cent in 2010 to 26.7 per cent in 2016 (See Table 3). The indicators show that Vietnam is in the process of the aging population. Table 3: Construction of Labour Force in Vietnam Unit: per cent (%) 2010 2011 2012 2013 2014 2015 2016 100.0 100.0 100.1 100.0 100.0 Total 6.8 6.0 5.2 5.2 4.7 100.0 100.0 15-19 11.5 10.5 9.9 9.7 9.4 20-24 13.6 12.9 12.3 11.8 11.7 4.7 4.2 25-29 12.8 12.4 12.0 12.1 12.3 30-34 12.5 12.6 12.6 12.2 12.1 10.1 9.6 35-39 11.6 11.9 12.3 12.2 12.2 40-44 10.9 11.5 12.0 11.6 11.4 11.6 11.7 45-49 8.8 9.4 9.8 10.2 10.4 50-54 5.4 6.1 6.7 7.2 7.6 12.9 12.7 55-59 2.8 3.3 3.6 4.0 4.2 60-64 3.3 3.5 3.7 3.9 4.0 12.0 12.0 65+ 11.9 12.0 10.9 11.1 10.1 10.2 7.4 7.8 4.3 4.6 4.1 4.1 Sources: Collected from GSO, Vietnam’s Reports on Labour Force Survey, 2012 and 2016. As a result of CPV’s guidelines and Vietnam government’s policies, there are progresses in HRD in Vietnam in recent years. Vietnam’s human resource has increase in number, from 49.49 million in 2010 to 52.21 million and 53.30 million in 2013 and 2016 respectively. In nearly the last decade, ratio of population under employment was around 60 per cent of total population. Especially, according to the data released by the General Statistics Office (GSO) of Vietnam, the unemployment rate of the population in working age has maintained at low rates, with the highest at 2.64 per cent in 2010 (See Table 4)

116 Table 4: Situation of HR in Vietnam 2010-2016 Population Ratio to Employed Unemployed in working total age (mil.) Number Rate (%) Number Rate (%) population (mil.) (mil.) (%) 2010 50.837 58.5 49.494 97.36 1.344 2.64 2011 2012 51.724 58.9 50.679 97.98 1.045 2.02 2013 2014 52.348 59.0 51.442 98.23 0.926 1.77 2015 2016 53.246 59.3 52.208 98.05 1.038 1.95 53.748 59.2 52.745 98.13 1.003 1.87 53.984 58.9 52.840 97.88 1.144 2.12 54.445 58.7 53.303 97.90 1.143 2.10 Sources: Collected from GSO, Vietnam’s Reports on Labour Force Survey, 2012 and 2016. Significantly, thanks to CPV and Vietnam government’s efforts, the quality of the human resource of Vietnam has gained significant progress, in terms of education rate of the population, and the ratio of trained labour force. There was an increase in the rate of literate population at the ages of 15 and above, from around 87 per cent in the late 1989 to 90 per cent in 1999 and around 95 per cent in 2015 respectively. There is also progress in education for female as well as population from rural area, from about 91 per cent in 2006, it has an increase to 93 per cent in 2015. Meanwhile, the population educated in rural area also has an improvement of one per cent increase from 2006 to 2015 (See Table 3).

117 Table 5: Percentage of Literate Population at the Ages of 15 and Above, 1989-2015 Total Male Female Urban Rural 1989 87.0 - - - - 1999 90.0 - - - - 2006 93.6 96.0 91.4 96.9 92.3 2007 93.8 96.2 91.6 97.0 92.5 2008 93.6 96.1 91.3 97.0 92.2 2009 94.0 96.1 92.0 97.3 92.5 2010 93.7 95.9 91.6 97.0 92.3 2011 94.2 96.5 92.2 97.3 92.7 2012 94.7 96.6 92.9 97.5 93.3 2013 94.8 96.6 93.1 97.6 93.4 2014 94.7 96.4 93.0 97.5 93.3 Prel. 2015 94.9 96.6 93.3 97.6 93.5 Sources: Belanger et al. (2012). Narrowing gender inequality in Vietnam: An Analysis based on the results of Vietnam Population Censuses 1989, 1999 and 2009. ODSEF Research Report. p.28. Retrieved at https://www.odsef.fss.ulaval.ca/sites/odsef.fss.ulaval.ca/files/odsef_vietnamien.pdf; GSO (2017). Percentage of literate population at 15 years of age and above. Retrieved at http://www.gso.gov.vn/default_en.aspx?tabid=774 At the same time, there is also improvement in quality of the labour force in Vietnam recent years although there is still a large amount of labourers having no technical qualification. As data collected in the table 6, number of labourers having no technical qualification has decreased significantly from more than 85 per cent of employed human resource in 2010 to 79 per cent in 2016 and the portion of employed labour force participating in training courses at various levels (from vocational training to university and higher) as increased from less than 15 per cent in 2010 to more than 20 per cent in 2016. However, labourers with no technical qualification still account a large portion of total employed labour force (around 20 per cent).

118 Table 6: Labour Force Quality in Vietnam in Recent Years, 2010-2016 Unit: per cent (%) 2010 2011 2012 2013 2014 2015 2016 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 No technical qualification 85.3 84.4 83.2 81.8 81.4 79.7 79.1 Vocational training 3.8 4.0 4.7 5.4 4.9 5.0 5.0 Mid-term professional training 3.5 3.7 3.7 3.7 3.7 4.0 3.9 College 1.7 1.8 2.0 2.0 2.2 2.7 2.8 University and higher 5.7 6.1 6.4 7.1 7.8 8.6 9.2 Sources: Table built from the data of GSO (2013). Report on Labour Force Survey 2012. Hanoi: General Statistics Office; GSO (2017). Report on Labour Force Survey 2016. Hanoi: General Statistics Office. Thanks to the improvement in quality of labour force, the labour productivity of Vietnamese people has increased in recent years, from about US$ 4,300 in 2007 to more than US$ 5,400 in 2013 with the growth rate at 3.9 per cent annually in seven years. As data given in the Table 7, Vietnam’s labour productivity is still higher than those of Cambodia, Laos and Myanmar but less than those of Singapore and Malaysia at 15 times and 7 times respectively. Table 7: ASEAN Countries’ Labour Productivity Unit: USD Source: Nguyen Dac Thanh. Vietnam’s Labour Productivity in ASEAN Economic Community. Retrieved at http://veam.org/wpcontent/uploads/2016/08/2015_35_Nguyen_Dac_Thanh_Vietnam_Labou r_productivity_in_AEC.pdf

119 There is also a significant change in labour participation in economic sectors in Vietnam recent years. Portion of work force participating in traditional sector such as agriculture, forestry and fisheries has decreased about seven per cent in 6 years, from 48.8 per cent in 2010 to 41.9 per cent in 2016. There was only three per cent of increase of work force participating in industrial and construction areas, from 21.7 per cent in 2010 to 24.7 per cent in 2016. Meanwhile, the services sector has attracted more labourers; from 29.6 per cent in 2010 to 33.4 per cent in 2016 (See Table 8). Table 8: Labour Force Participating in Economic Sectors in Vietnam, 2010-2016 Economic Sectors 2010 2011 2012 2013 2014 Unit: per cent (%) Total 100.0 100.0 100.0 100.0 100.0 2015 2016 48.7 48.4 47.4 46.8 46.3 100.0 100.0 Agriculture, Forestry 44.0 41.9 and Fisheries 21.7 21.3 21.2 21.2 21.4 Industry and 22.8 24.7 Construction 29.6 30.3 31.4 32.0 32.2 Services 33.2 33.4 Sources: Table built from the data of GSO (2013). Report on Labour Force Survey 2012. Hanoi: General Statistics Office; GSO (2017). Report on Labour Force Survey 2016. Hanoi: General Statistics Office. There is also a different phenomenon in Vietnam’s labour force, those are exported labourers working in many countries around the world. Number of exported labourers working abroad has increased notably in recent years. According to the data released by the Department of Overseas Labour (Ministry of Labour, Invalid and Social Affairs), there are a significant increase in terms of number of Vietnamese labourers working overseas, from 1,022 persons in 1991 to 37,000 in 2001 and more than 126,000 in 2016. Importantly, the remittances received from overseas labourers account a good amount of GDP, from seven to eight per cent of GDP in average in the last ten years (See Table 9).

120 Table 9: Labourers Working Overseas and their Contributions to Vietnam’s Economy Years Numbers of Exported Personal Remittances, Personal Remittances, 1991 Labourers Received (current US$) Received (% of 2001 2007 1,022 - GDP) 2008 37,000 - - 2009 85,020 6,180,000,000 2010 86,990 6,805,000,000 - 2011 73,028 6,020,000,000 7.98 2012 85,546 8,260,000,000 2013 88,283 8,600,000,000 6.86 2014 80,338 10,000,000,000 5.68 2015 88,211 11,000,000,000 7.12 2016 106,840 12,000,000,000 115,980 13,000,000,000 6.35 126,296 13,383,271,453 6.42 6.42 6.44 6.73 6.61 Source: Table charted from various documents of Department of Overseas Labour, Ministry of Labour, Invalid and Social Affairs, Government of Vietnam. In short, human resource in Vietnam is various in quantities and gradually increasing in quality. However, the process of aging population seems to have begun in this country. Although there is an improvement in quality of labour force, the portion of unskilled labour in Vietnam are still very high. Due to the low income in domestic market, a large number of Vietnamese labourers have been working abroad who have been contributing significantly to the development of Vietnam’s economy. 3.
Demand Side Analysis As mentioned above, there are progresses in HRD in Vietnam in 30 years of reforms, especially since beginning of 21st century. However, there are issues posed by the skill shortage and the low quality of labour force. A research released in 2008 by the World Bank showed that, - Higher education graduates are (therefore) increasingly needed in Vietnam. However, as also indicated by the increasing returns, the relative demand for higher education graduates is rising faster than the relative supply and firms report to be facing increasing skill bottlenecks: the skill gap is widening.51 51 The World Bank (2008, June). Vietnam: Higher Education and Skills for Growth. Pp.xviii-xix. Retrieved at http://siteresources.worldbank.org/INTEASTASIAPACIFIC/Resources/Vietnam- HEandSkillsforGrowth.pdf

121 - Beyond skill shortages, poor quality and relevance of skills also contribute to this increasing skill gap. Higher education graduates lack some of the skills needed for good performance in the work place.52 Another research conducted by Institute of Labour Science and Social Affairs (ILSSA) in collaboration with International Labour Organization (ILO) in 2014 also highlighted: While professional knowledge and skills, soft skills and modern industrial working styles and qualities are specific for each occupation and working position in enterprises, young Vietnamese graduates are often merely equipped with general theoretical knowledge, have low executing capacity, and lack important life skills. In particular, the skilled labour force is weak at informatics and languages and lack effective competencies for working, which greatly affects their ability to work independently and improve productivity.53 The assessment of the ILSSA and ILO was proved before by another research conducted by the World Bank in 2012. According to the research, all skills of Vietnamese labourers just meet a small percentage of employers’ demands. Job-related technical skills and punctuality are the best of Vietnamese labourers but they just meet only less than 25 per cent of the demand. Other important indicators reflecting the quality of labourers such as experience, independence, and foreign language/communication are also very low in Vietnam, just around 10 per cent (See Figure 5). 52 The World Bank (2008, June). Vietnam: Higher Education and Skills for Growth. P.xix. Retrieved at http://siteresources.worldbank.org/INTEASTASIAPACIFIC/Resources/Vietnam- HEandSkillsforGrowth.pdf 53 ILSSA & ILO (2014, December). Skilled Labour: A Determining Factor for Sustainable Growth of the Nation. Policy Brief, Vol.1, p.3.

122 Figure 5: Key Job-Specific Skill Gaps in Vietnam Source: The World Bank (2012). Putting Higher Education to Work: Skills and Research for Growth in East Asia. Washington DC, p. 55. A very important issue should be highlighted here is that human resource development in Vietnam does not have linkages with demands of the labour market at quantity, structure, and quality. In terms of quantity, as analyzed above, the portion of trained labourers is only about 20 per cent in 2016. The rest is work force without technical qualification. In case of structure, only a small portion of labourers work below their skills, except clerks. Interestingly, there was about 30 per cent of labourers working inappropriate with the fields they were trained, of which 23.91 per cent working above their skills (lack of skills) in 2007. The situation seems to be worse when the ones working above their skills at 44 per cent. Importantly, the highest rate of labourers lacking skills was at the ages from 25 to 54. The rate of leaders and equivalent working above their skills has an improvement from more than 58 per cent in 2007 to 37 per cent in 2013 but still very high. In other occupations (except technical workers and elementary occupations), the rate working with lack of skill were still very high, even more than 95 per cent of skilled workers in fields of agriculture, forestry and fisheries. In industrial and construction, and services sectors, the rates of people lacking skills were at 65.52 and 56.44 per cent respectively in 2013, a notable increase from 2007. Notably, the rate of labourers who work below their skill (or fields of being trained) increased from 4.41 per cent in 2007 to 8.33 per cent in 2013. This reflects a very thinkful fact, many young people have accepted to have a job without linking to what they were trained (See Table 10)

123 Table 10: Situation of Labour Force in Vietnam Unit: per cent (%) Labourers Working Labourers Working Below their Skills Above their Skills 2007 2013 2007 2013 Total 4.68 5.92 23.91 43.84 Male 5.73 7.17 27.09 44.35 Female 3.62 4.59 20.71 43.29 15-24 4.12 7.76 24.31 35.61 25-34 4.41 8.33 26.4 40.77 35-44 3.64 3.76 25.9 48.63 45-54 5.4 4.03 22.35 46.14 55-59 8.47 5.93 19.82 43.32 60+ 5.86 7.61 14.85 39.47 Leaders, managers and administrators of 0 0 58.18 36.94 branches, levels and organizations Senior technical workers 0 0 12.94 11.78 Medium technical workers 3.33 6.02 7.38 16.48 Clerks 31.15 39.97 51.13 56.83 Service workers and market sales workers 9.01 9.84 83.6 87.79 Skilled agricultural, forestry and fishery 3.49 2.89 93.24 95.53 workers Craft and related workers 5.2 7.59 81.47 86.09 Plant, machine operator and assemblers 7.23 10.32 52.12 69.6 Elementary occupations 3.91 3.39 0 0 Agriculture, forestry and fisheries 3.05 3.19 7.05 11.13 Industry and construction 5.15 7.16 55.52 65.52 Services 7.06 11.16 30.53 56.44 Source: Nguyen Ba Ngoc and Pham Minh Thu (2014). Labour Productivity in Vietnam- A View from Perspective of Labour’s Structure and Skills. Labour Science and Social Affairs. Quarter IV. p.12. It could be said that, the matching between supply and demand in terms of human resource in Vietnam could be seen from the number of population in working age. As forecasted by GSO Vietnam and UNFPA in 2016, there will be the growth of popupation to the half of this century although the decreasing trend is visible (See Figure 6). Thanks to the growth of population, labour force of Vietnam will be added. As a result of the slow growth, Vietnam is now in the process of an aging society although the number of population in working age is various (Figure 7). In other words, in coming years, Vietnam seems not to face with challenge of labour shortage.

124 Figure 6: Forecast of Average Growth Rate of Population of Vietnam to 2049 Unit: per cent (%) 1.2 1 1.099 11..0095 0.96 0.9 0.8 0.6 00..784 0.68 0.4 0.6 0.52 0.57 0.44 0.47 0.33 0.39 0.33 0.31 0.2 0.22 0.2 0.16 0 0.07 0.01 2014 2019 2024 2029 2034 2039 2044 2049 Hypothesis 1: Average Hypothesis 2: Low Hypothesis 3: High Source: GSO Vietnam and UNFPA (2016). Vietnam’s Population Forecast 2014-2049. Hanoi: News Agency Publishing House, p.25. Figure 7: Vietnam’s Population Pyramids 2014, 2049 Source: GSO Vietnam and UNFPA (2016). Vietnam’s Population Forecast 2014-2049. Hanoi: News Agency Publishing House, p.27 However, as mentioned above, skilled labour shortage, including low quality of work force is bottleneck of Vietnam’s human resource today. Due to the slow progress in improving the quality of the human resource although there are ambitious strategies charted out, it seems the supply of HR in terms of quality will not meet the demand of the market.

125 4.
Conclusions and Policy Recommendations Thanks to the stable and high growth of economy in more than last two decades as a result of guidelines of the CPV and government’s policies, there are improvement and progress in HRD in Vietnam. In the last decades, the supply of HR in quantity is various. The quality of the human resource also has an improvement which is reflected in an increasing portion of trained labour force. There is also a shift in sector participation of labour force where the labour’s participation in agriculture, forestry and fisheries decreases and those who participate in industry, construction, and services have an increase in portion. However, the lack of skilled labour and low quality labour force are significant challenges to economic development of Vietnam in last decades as well as in coming years. The slow enhancement of labour quality in numbers and skills of the work force raise questions on the education programs as well as the efficiency of government’s policies (strategies, programs, plans) on human resource development in general. Based on good results as well as the limitations in HRD in the last several decades, the author of this chapter suggests some recommendations as followed: First, education program should be revised and reformed in the directions of, instead of focusing too much on academic knowledge and theoretical aspects, the program should give priority to practical aspect, especially the skills of the learners. Second, there should be more university-industry linkages. The lack of university- industry linkages in the last decades have created more supply than demand-driven. As a result, the rate of unemployment among higher certificates (university and higher) seems to increase in the last few years. Third, the education strategy needs to pay more attention to its duty of guiding students. Instead of encouraging students to enroll in the university, it should guide people learn what fits them, enrolling more in vocational training to serve the requirement of industrialization and modernization strategy. Fourth, the efficiency of policies (strategies, programs, plans) on human resource development should be revised. As mentioned above, there are many policies adopted by the government in the last two decades but the improvement of labour quality (reflecting in the slow growth of skilled labour percentage among others) is still a big limitation. In other words, there should be a more realistic approach in setting objectives regarding enhancing ratio of skilled labour in labour market. And, Fifth, state management function of ministries who are in charge of human resource development should also be adjusted. In other words, there is a phenomenon of function overlapping of ministries in terms of educational and training management. For instance, the Article 236 (on State Management of Labour) of the 2012 Law Code states that,

126 1. The Government shall uniformly carry out the State management of labour nationwide. 2. The Ministry of Labour, Invalids and Social Affairs shall be responsible before the Government for carrying out the State management of labour. Ministries and ministerial agencies, - within their respective mandates - shall be responsible for implementing and cooperating with the Ministry of Labour, Invalids and Social Affairs in the State management of labour. 3. People's Committees at all levels shall be responsible for the State management of labour within their respective localities. However, the Decision No.1216/QD-TTg on July 22, 2011 approving the Strategy and Planning Scheme for Vietnam Human Resources in the 2011-2020 was drafted and submitted for the approval of the Prime Minister by Ministry of Planning and Investment, not by Ministry of Labour, Invalids and Social Affairs who has responsibility to do this duty. In other words, the overlapping of functions and duties of state management agencies is one of the important reasons which have created limitations in HRD of Vietnam.

127 References (1)
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130 5 Human Resources Landscape in Thailand: Development and Policy Actions Sirima Bunnag54 1.
Introduction When researchers discussed the determinants of economic growth, one of the main driving forces of economic growth in many developing and emerging countries is the supply of labor, which relates to other factors, such as physical capital and technology. Using the Penn World Table 9.055, before 1997 (the year of financial crisis occurred in Thailand) the average annual growth rate of the country from 1970 to 1997 was approximately 6.87. From 1997 until 2014, the average annual growth rate was 4.066. In addition, research from TDRI56 shows that the source of economic growth during 1981 – 1995 was from conventional factors such as capital, labor (both unadjusted and quality adjusted), and TFP. Details showed that unadjusted employment (or labor force) contributed about 11.87 percent, and adjusted employment contributed about 22.21 percent. Although statistics show that Thailand has not relied much on the labor force in producing economic growth, there is room still for improving the quality of the labor force to increase the growth rate of the country. Lately, a study from the World Bank group pointed to labor inputs playing an important role in the service sector. The estimation of the contribution to economic growth from 1977 to 2004 by the service sector was as large as 53 percent57 and almost 63 percent after adjusting for the quality of the labor force. According to the latest report by World Economic Forum (hereafter WEF)58 on Global Competitiveness Report 2017-18, Thailand was ranked 32rd and identified the 1 Faculty of Economics, Chulalongkorn Universisty, Thailand. 55 Data of PWT 9.0, as available on www.ggdc.net/pwt. Feenstra, Robert C., Robert Inklaar and Marcel P. Timmer (2015), \"The Next Generation of the Penn World Table\" American Economic Review, 105(10), 3150-3182, available for download at www.ggdc.net/pwt 56 Tinankorn, Pranee and Sussangkarn, Chalongphop. (1998) Total Factor Productivity Growth in Thailand: 1980 – 1995 (p.22), research report submitted to the National Economics and Social Development Board. Online https://tdri.or.th/en/2013/05/m45-2/ 57 Bosworth, Barry. (2005). Economic Growth in Thailand: The Macroeconomic Context. This survey of economic growth accounting in Thailand was prepared for a World Bank project on the investment climate, firm competitiveness and growth in Thailand. Online 58 WEF has classified factors driving competitiveness and economic growth into three groups; Factor- driven economies, efficiency-driven economies, and innovation-driven economies. Under each group,

131 stage of development of Thailand as an Efficiency-driven Economy (See Appendix Table 1 Classification of Economies by Factors (or sub-index)). However, if one was looking into the details of each pillar of the sufficiency enhancing sub-index, the labor market efficiency was rather stable compared to other pillars. Despite Thailand passing the stage of development from a factor-driven economy to an efficiency-driven economy59, the supply of labor and quality of that workforce still plays an important role for when the country is approaching the Ageing Society. It is obvious that besides capital and technology, the closer the country approaches an ageing society, the more important labor productivity is. For the country to have qualified skills for its labor force, Thailand should have a thorough look at the current situation of the workforce of the country, including policy implementation concerning human resources management and the development of the country. The objective of this work is to identify the status of the workforce within the last 5 years (2012 – 2017) in Thailand as a part of the jigsaw for regional development through collaboration among ASEANs via the labor market or human resources management policies and practices in Thailand. This current work covers the period of study from 2012 to 2017. It draws relevance from various reliable sources about the human resources landscape in Thailand, including the labor market and human resources development in Thailand. In the following section, there will be the overall macro-economic performance of Thailand from 2012 to 2017. The third section is about population, employment and unemployment in Thailand. Section four will mainly focus on challenges for Thailand from both internal and external factors and how the country responds to those challenges. The final section will contain concluding remarks, in which it will state that the country should attempt to further foster human resources development and management and enhance economic collaborations among ASEANs. Table 1: Global Competitiveness Index: Thailand (2012 - 2017) Year Global Global Labor Market Labor Market Efficiency Competitiveness Competitiveness Efficiency Score Index (Rank) (Score) Rank 4.3 4.3 2012 – 13 38/144 4.5 76/144 4.2 2013 – 14 37/148 4.5 62/148 4.2 2014 – 15 31/144 4.7 66/144 4.2 4.3 2015 - 16 32/140 4.6 67/140 2016 - 17 34/138 4.6 71/138 2017 - 18 32/137 4.7 65/137 Source: WEF, the Global Competitiveness Report from 2012 – 2017. the sub-indices are grouped to identify the character of different economies. 59 World Economic Forum, The Global Competitiveness Report (various issues: 2012- 2017).

132 2. Overall Marcroeconomic Performance Thailand’s economic performance, due to the World Bank country classification, was adjusted from a lower middle-income country to an upper middle-income country in 2011. Figure 1 shows the country’s GNP and its growth rate since 1990. It is clear from the figure that the country’s economic growth rate was around 6 to 8 percent before the financial crisis occurred in 1997 and during the last 5 years (2012 – 2017), the economy’s growth rate has been increasing at a slow pace of around 3 to 4 percent. Figure 1: GNP and Growth Rate (from National Accounts of Thailand 2016) 

  

 

  

  

 

 

   

  

                 Source: NESDB, National Accounting of Thailand, 2016. The Thai economy comprises of mainly agriculture, manufacturing and service sectors to GDP in 2016, which contributed approximately 6.02%, 36.08% and 57.90%, respectively. It is also clear from Figure 2 that the agriculture sector was the smallest among the three sectors and the one with the largest share is the service sector. At this point, both manufacturing and service sectors have been viewed as economic indicators for economic growth, especially the service sector, which contributed to over 50 percent. Figure 2. Structure of Production Classified by Sector (%) (1990 – 2016) 







    Source: NESDB, National Accounting of Thailand, 2016

133 The structure of production and employment told a different story during 1990 – 2015. Instead of production and employment being in a similar direction, the share of production and employment in the agriculture sector were in in fact in opposing direction; one is the highest and one is the lowest, meaning that employment in the agriculture sector has been decreasing overtime, while employment in service and manufacturing sector has been gradually increasing. By 2017, the share of employment in the service sector became the highest, while that of manufacturing was still at the lowest. The transformation of employment among these sectors is another indicator that confirms the importance of the service sector. Figure 3. Employment Share by Sector during 2011 - 2017 
 
 
 
 
 
 
 
 
 
     Source: NESDB, Employment Statistics (Table 3), calculated share by author. Another important indicator of macroeconomic performance for the country is investment. From 1990 to 2016, there were sharp drops in investment during 1997 and 2009. These drops were associated with the Asian financial crisis (the Tom Yam Kung Crisis) and the Global financial crisis (the Hamburger Crisis), respectively. However, during 2010- 2016, the average growth rate of internal investment regained a positive trend and the rate was at approximately 4.4 percent. Besides domestic investment, FDI is another indicator that affects the overall economic performance of the country. Thailand is similar to other developing countries that promote FDI from abroad so as to improve the country’s production. The share of FDI inflow fluctuated from 0 to 5 percent, with the share to GDP at the lowest level in 2011 when the country faced a major flood disaster. The recovery of FDI inflows from 2011 was not a smooth increase but rather it fluctuated from 1 to 3 percent (see Figure 4 (b)). One interesting point about FDI is that the FDI outflow from Thailand has been gradually increasing and the critical year of transformation of FDI outflows was 2009. In 2016, the share of FDI outflows was greater than that of FDI inflow by almost 2.5 percentage points.

134 Figure 4. Gross Fixed Capital Formation and growth rates, Foreign Direct Investment and growth rates (2010 – 2016) (a)
(b) 

   

   

 

  

  

  
       
 
                                Source: Bank of Thailand, World Bank Database on FDI The share of exports and imports to GDP increased overtime. The exports share rose from approximately 28 percent in 1995 to almost 77 percent in 2016, while the imports share increased from 35 percent in 1995 to 70 percent in 2016. The data also told another story of economic dependency on international trade. The share of both exports and imports altogether shows the degree of openness of the country since 2000. As shown in figure 5, the growth rate of exports and imports did fluctuate in correspondence with the growth of GDP. The growth rate of exports and imports moved together and corresponded to the growth rate of GDP. Figure 5. Share of Exports and Imports as % of GDP (1995 – 2016) (a)
Exports and Imports as % of GDP (b) Growth of Exports and Imports

 
  
 

 

 

 

 






                      Source: Bank of Thailand However, exports tended to grow at a slower pace than that of imports and the effects occurred at the level of trade balance, as shown in Figure 6, for the slowdown of trade balance of the country in 2017 after the recovery from 2013. Exports of Thailand classified by industrial groups in 2016 were mainly capital-intensive commodities and so as commodities imported of the same year. Past macroeconomic performance of Thailand led to many issues, such as productivity of all factors that engaged in the production process, production and trade competitiveness of the country. Moreover, this documentary research from this point

135 onward will concentrate on human resources development, management and programs by reviewing the relevant information from various reliable sources, such as the Ministry of Labor, Office of the National Economics and Social Development Board (NESDB), National Statistical Office of Thailand (NSO) and International Labor Organization (ILO), United Nations (on Human Development Index) and World Economic Forum. Figure 6. Trade Balance 
 
 
 
 
 
  
                Source: Bank of Thailand 3. Labor Market Employment and Unemployment 3.1Labor Market 3.1.1 Supply of Labor During 2012 – 2017, the population and labor force growth rate shows a different scenario compared to 1999 – 2012. The population increased in numbers but at a slow pace, while the size of the labor force decreased. Figure 7 (a) shows the population and labor force growth rates from 2000 – 2017. The sharp drop in labor force in 2014 was due to the decreasing size of the labor force in the agriculture sector (see also Figure 3).

136 Figure 7. Population and Labor Force Growth and Employment by age-group (2000 – 2016) (a) Growth of Population and Labor Force (b) Employment by age-group  
 


 


 



        









       
  
  
 
 
     Source: Bank of Thailand The structure of the labor force by age group from 2001 to 2016 also changed during this period. The age group of 15 -19 years old continuously decreased over time from 5.6 percent in 2001 to 2.32 percent in 2016, while the age group older than 60 years old increased from 5.7 percent to 10.2 percent. In addition, the largest age group in 2016 was the group of aged 40 – 49 followed by the group aged 50 -59, which comprised of 24.97 and 20.11 percent of the population, respectively. According to Weil (2013), a decrease in the growth rate of the working-age fraction will reduce the growth rate of GDP per capita. Data from the Bank of Thailand during 2001 – 2016 showed that the working-age fraction (aged 20 -59) decreased from 0.887 to 0.8748. Although the working-age fraction was more than 80 percent, by using Weil’s calculation, this demographic change reduced the growth rate of GDP per capita by 0.09 percent60. An ageing labor force continues to increase but younger-working age groups tend to decrease from 0.542 to 0.424 and this certainly affects the production capacity of the country. Besides the structure of the labor force, the number of unemployed people and the unemployment rate of Thailand also increased. This structural change of the labor force has raised concerns about the productivity of the labor force in the process of production and the growth of the economy. 3.1.2. Demand for labor Another part of the labor market is the demand for labor. We all know that demand for labor is derived demand; data on employment implies the demand for labor has been fulfilled, and the difference between labor force and employment shows the number of unemployed workers of the country. Some also use the number of job placements as an indicator for labor demand because it shows that job vacancies have been fulfilled. This study shows both employment and job placements as indicators for labor demand. Data for both indicators shows that unemployment for Thailand has been less than 1 percent since 2011 but continues to increase. Figure 8 (a) shows the 60 Calculation in this section is based on Weil, David N. (2013) Economic Growth (3rd Edition), p. 162.

137 employment and unemployment structure in the Thai economy. Figure 8 (b) shows that during the past 6 years, demand for the labor force could not perfectly be fulfilled as job vacancies (positions) is greater than job placement. Figure 8 (c) shows in details that the generation aged 18 – 29 was in the high demand compared to other age-groups. The level of education has also shown that demand for a labor force with elementary education and under, a certificate of vocational education, a diploma of vocational education, or diploma were in higher demand than bachelor graduates. Information of job vacancies and job placement by level of educations indicates that there is some problem in fulfilling demand for unskilled or low skilled labor force. The shortage of unskilled and a low skilled labor force has tended to become a more serious in Thailand. Considering job vacancies and job placements by occupation, elementary occupations, service workers shop and market sales workers, clerks, plant and machine operators and assemblers, and technicians and associate professionals are among the top five occupations that are open for job vacancies.

138 Figure 8 Labor Market, Job Vacancies and Job Placements (a) Employment and unemployment (b) Job Vacancies and Job Placements 
 
 
  
 
 
 
 
 
 
  
 
 
 
 
 
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 3.1.3 Transformation of Occupation From 2011 to 2017, the share of employed persons by work status did not change much. The share of private employees was still the largest share and it accounted for 39.70 percent, followed by the group of own account workers (31.43 percent). The Government employees share was rather stable and account for approximately 9.5 percent every year. The working group that experienced a large drop was the unpaid family workers group, from 21.79 percent to 16.47 percent. Moreover, considering the change of work status overtime, private employees and employers grew 12.28 percent and 9.25 percent respectively and all the other work statuses decreased. This could lead the direction of work in the country towards the private sector and entrepreneurs as employers.

140 Figure 9 Share of Employed Persons by Work Status (2001 – 2017) 









 

 

 

 


 
 
                     Source: Bank of Thailand, EC_RL_010: Number of employed persons classified by work status Employment by sector of production also indicates that employment in the agricultural sector decreases continuously while employment in the non-agricultural sector, despite increasing positively, it increases at a slow pace. Over the past 7 years (2011 – 2017), the average growth rate of employment of agriculture sector decreased by around 3.82 percent while those from the manufacturing and service sector increased around 1.08 and 1.43 percent, respectively. The specific employment by sector shows that employment in real estate activities over 7 years increased significantly compared to other sectors, followed by administration and support service activities, professional, scientific and technical activities.

141 Table. 2 Employment structure and growth rate of employment by sector Employment Data from Labor Force Survey (1,000 person) Percentage Change % change Compound Employment in Each Sector 2011 2012 2013 2014 2015 2016 2017 (2016- Average 2017) Growth Rate Total 38,921.50 39,408.99 39,383.78 38,576.23 38,548.23 38,266.59 38,099.81 -0.44 -0.35 Agriculture Sector 14,883.10 15,433.58 15,406.95 12,732.72 12,271.91 11,746.62 11,783.27 0.31 -3.82 Manufacturing 5,301.37 5,394.46 5,435.25 6,393.46 6,453.60 6,288.51 6,107.54 -2.88 2.39 Construction 2,371.90 2,493.06 2,512.59 2,269.20 2,281.76 2,352.14 2,160.20 -8.16 -1.55 Wholesale and Retail Trade, -0.17 0.77 Repair of Vehicle 6,037.02 5,993.81 6,007.83 6,184.87 6,175.79 6,331.42 6,320.78 Financial and Insurance 395.45 417.78 440.49 256.83 539.21 545.57 524.54 -3.85 4.82 Activities 193.62 186.30 204.38 9.70 11.59 219.68 -5.00 3.24 Real Estate Activities 105.83 131.12 131.72 159.15 241.75 231.25 363.52 2.56 5.20 Information, Computer and 181.42 213.82 199.21 247.95 373.52 354.43 Communication 126.93 4.70 3.83 105.31 121.23 Professional, Scientific and 268.18 238.72 257.27 316.66 99.14 3.27 1.86 Technical Activities 82.55 96.00 1,232.19 2.81 4.66 1,215.83 1,198.53 2,778.28 1.79 1.47 Electricity, Gas, Air 101.29 94.75 99.07 117.09 2,643.56 2,729.45 Condition Supply 586.76 1.26 6.85 547.5 579.44 Water Supply, Sewerage, 88.78 66.41 88.57 105.45 1,588.80 0.59 -0.08 Water Management 1,611.15 1,579.41 1,185.08 0.02 -1.37 1,181.91 1,184.82 Transportation and Storage 937.32 925.94 947.92 1,192.30 Accommodation and Food 2,545.71 2,307.21 2,299.98 2,567.80 Service Administration and Support 394.34 388.78 393.94 495.29 Service Public Administration, 1,596.39 1,713.62 1,639.95 1,589.36 Defense, Social Security Education 1,287.40 1,201.15 1,180.62 1,152.72 Source: Bank of Thailand, Labor Force Survey (new Series ISIC Rev.4)

142 Table 3: Employment structure by occupation (2011 – 2017) (Unit: Thousand persons) Service Legislator, Professionals Technicians Clerks workers, Skilled Craftsmen Plant and Elementary Workers senior and shop, agricultural and machine occupations not officials associate and and fishery related operators included and professionals market workers trades and elsewhere managers sales workers assemblers 63.28 workers 28.02 61.75 2011 1,005.69 1,861.39 1,288.69 1,349.21 7,550.29 13,573.60 4,533.79 3,065.32 4,173.43 64.30 55.09 2012 1,214.55 1,888.41 1,375.04 1,375.09 7,191.18 13,992.66 4,337.41 3,134.10 4,404.68 68.28 70.12 2013 1,452.74 1,943.78 1,479.12 1,288.61 6,942.95 14,113.34 4,324.14 3,193.70 4,106.76 1.73% 2014 1,533.34 2,097.84 1,745.22 1,500.77 7,273.57 11,774.03 4,461.35 3,602.19 4,067.05 2015 1,508.37 2,214.79 1,722.05 1,486.88 7,374.27 11,215.47 4,475.88 3,793.29 4,170.10 2016 1,469.99 2,194.83 1,709.58 1,555.15 7,627.67 10,719.21 4,481.87 3,689.95 4,176.12 2017 1,426.44 2,150.64 1,747.41 1,556.30 7,649.00 10,749.97 4,262.48 3,633.88 4,212.01 Compound Average Growth 5.998% 2.44% 5.21% 2.41% 0.22% -3.81% -1.02% 2.88% 0.15% rate (2011 – 2017) Source: Bank of Thailand, EC_RL_012: Number of employed persons classified by occupation