~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

[Year 1997]
[Year 1998]
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[Year 2000]
[Year 2001]

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.