Labour & Education Vietnam Earmarks $1bln for Vocational Training

The government of Vietnam will pour $1 billion into vocational training in an effort to improve workforce quality, Prime Minister Nguyen Tan Dung said at the meeting with the Labor Ministry and representatives of all 64 provinces in Hanoi May 10 .

"One of the biggest challenges for Vietnam in the WTO period is low human resource quality, which affects the country's competitiveness in many fields," the Prime Minister noted, asking the Ministry of Labor, War Invalids and Social Affairs (MoLISA) to closely coordinate with other agencies to complete and submit to the government a plan on vocational training at the next monthly cabinet meeting.

The Prime Minister also suggested five measures to boost vocational training and pledged to give around $1 billion as soft loans for laborers to learn trades. He said labor export was not a long-term solution to creating stable jobs.

Since Vietnam has joined the WTO, demand for labor, especially technicians at industrial and export processing zones is very high. This year, the country plans to attract $12 billion foreign investment and the government plans to spend 40-45% of GDP for development. However, of the 44.4 million Vietnamese laborers, only 20% are trained, Head of MoLISA Nguyen Thi Hang said.

To balance labor supply and demand, vocational training is a must, but funding for this task is too modest, Director of the Department of Labor, Ward Invalids and Social Affairs of Nghe An province said, revealing that Nghe An had 3.1 million people, including 1.5 million of working age. However, it receives only VND2 billion ($125,000) for vocational training. Vocational training is very weak and didn't meet market needs, Minister Hang admitted, saying Vietnam lacks a labor market information and forecast system, hindering employers and trainers from meeting each other and creating an imbalance of labor supply in different areas. "In the next eight-ten years, foreign laborers, specifically Thai, will come to Vietnam. If we don't urgently train our workforce, we will be in high risk of losing the home market," Hang warned, adding that improving laborers' skills is the only way to keep the local market. Vietnam now has around 44.4 million people of working age. Of the total workforce, laborers in the State-owned sector account for 9.6%, those in the non-state-run sector made up 88.8 % and 1.6% in the foreign-invested sector. The country plans to raise the ratio of trained laborers from 20% last year to 32% by 2010, to meet the higher requirements of domestic and foreign businesses.