Burgeoning workforce hurts Hanoi's budget
HANOI - Rising public-sector wages and the increasing number of
employees on the state payroll are eating into Vietnam's state budget
despite Hanoi's efforts to reverse the trend.
The government had planned to reduce the number of state employees by
70,000, or 15 percent, by 2002. Under those plans, state agencies and
businesses would have had to cut their staff by more than 7,000, or 8
percent, this year. In lower-level agencies, staff cuts totaling 62,000, or 14
percent, are needed before the year's end. But experts say these plans
have had little impact and very few job cuts have occurred.
Some sectors have taken the lead in trimming their payrolls, including
agriculture, forestry, fishing, trading, hotel, communications, science
research, and mass organizations. In particular, mass organizations have
reduced their head count by 7 percent in the first nine months of the year,
while hospitality-related enterprises have cut back by 4.5 percent. Trading
businesses have reduced staff nearly 3 percent.
But at least 10 sectors have seen their employee numbers climb higher
than ever before, including cultural offices, investment consultants, health
care, clean-water production, banking, education and the mining industry.
Not only are staff numbers increasing, but employees' salaries are
climbing, severely straining the state budget. In the first nine months of the
year, the number of state employees at central-level health-care institutions
rose 5.6 percent over the same period last year, and their incomes soared
17.4 percent. State-run banks registered increases of 3.4 percent in staff
numbers and 15.3 percent in salaries.
The number of public servants has risen to 3.4 million, with an average
salary of VND890,000 (US$59) a month - an increase over the past year
of 0.2 percent in staff and 20.8 percent in salaries. Central agencies and
enterprises employ 1.4 million people of this total, and they earn an
average monthly income of VND1.15 million.
To meet its targets, the government drafted major administrative reforms
expected to reduce spending and raise the incomes of public-sector
employees.
But experts say the increase in staff is being fueled by the attraction of
under-the-table incomes, and the easy promotion opportunities at state-run
institutions, particularly those at the central level. They are calling for more
specific, well-thought-out policies to cut payrolls and lift skills.
They are also urging the government to adopt preferential policies that
could encourage highly skilled professionals to work for local-level
enterprises. If a state employee worked for an enterprise that was making
no effort to cut staff or boost output, pay rises should be withheld, they
said.
There was also a strong push for enterprises and agencies to be given
more responsibility for their own payroll, which would help them manage
salaries and employee numbers more effectively.
Asia Times - November 3rd, 2001.
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