Why is Vietnam’s labor productivity too low in Southeast Asia?

Low labor productivity will hinder the global integration process, this is a warning from economic experts, when comparing Vietnam’s production potential with other countries in the region.

VnExpress online newspaper reported on February 16, “Vietnam’s hourly labor productivity lags behind the Philippines and Indonesia.” The news said that despite impressive growth over the past 10 years, Vietnam’s hourly labor productivity is still lower than many countries in the region.

In a recent report by the World Bank, according to data from the Asian Productivity Organization (APO), in 2020, the production value per hour of Vietnamese labor only reached $6.4 compared to $14.8 in Thailand and $68.5 in Singapore. At the same time, the World Bank also noted that the key that Vietnam needs to firmly grasp is labor productivity growth.

The above World Bank announcement is completely consistent with the assessment of the General Statistics Office under the Ministry of Planning and Investment of Vietnam, announced in 2023, reported by the state-controlled media. Accordingly, Vietnam’s labor productivity in Southeast Asia is currently only higher than Cambodia, Myanmar and Laos. Specifically, Vietnam’s labor productivity in Southeast Asia is 2.4 times higher than Cambodia’s; 1.6 times more than Myanmar and 1.2 times more than Laos.

One question is, why is Vietnam’s labor productivity so low? Is it true that the working capacity of Vietnamese workers is 15 times lower than that of Singaporean workers?


Senior financial economist, Mr. Bui Kien Thanh, currently a senior advisor to large business corporations in Vietnam, explained:

“That is labor productivity, how many products can each person make, compared to Vietnam’s per capita output, how much lower is it?

For example, a Vietnamese worker using a machine for one hour can produce 100 screws. Meanwhile, with the same input, a Singaporean worker can produce 15 times more. That difference is called labor productivity.”

According to experts, there is a big difference in Vietnam’s labor productivity compared to Singapore’s because Vietnamese workers have not been properly trained, nor have they been invested in appropriate machinery and working conditions cannot keep up with Singapore.

Vietnam faces many limitations compared to other countries, such as: labor conditions, labor qualifications,machinery and equipment… Among them, the two most important and decisive factors are technological equipment, qualifications and capacity of workers.

In addition, in Vietnam’s previous development strategy, cheap labor was considered a competitive advantage. By now, it has become clear that this was a big mistake. Because the decisive factor in each business’s revenue and profit is labor productivity, and skill level is the decisive factor.

Therefore, Dr. Le Dang Doanh said that the factors of organizational management and institutional reform are the reasons leading to lagging behind in development. Accordingly, what “Vietnam needs to do is institutional reform, apparatus reform, that is, the state does things that are effective and necessary for the state to do.” As for purely commercial fields such as beer production, soft drinks…, the state should divest capital so that the private sector can operate more effectively.”


To solve the problem of increasing labor productivity, according to the General Statistics Office, businesses need to determine appropriate production models, improve production value, innovate machinery, equipment and technological processes. Also, it is necessary to raise awareness, discipline, and serious working attitude for workers.

During his lifetime, late Singaporean Prime Minister Lee Kuan Yew once had a very famous saying when talking about Vietnam: “If there is the number one position in Southeast Asia, it must be Vietnam.” But in reality, up to now, that number 1 position belongs to Singapore.

This shows how important the qualifications, capacity and vision of national leaders are in bringing a country to prosperity./.


Tra My – Thoibao.de

Kasse animation 7.8.2023