Over the last decade, Vietnam doubled its per capita income thanks to consistently strong economic growth and low population growth. The country halved the proportion of the population below the poverty line, from about 20% in 2000 to 15% today.
The share of agriculture decreased by 5% between 2000 and 2008, while industry increased by the same amount. The proportion in services remained relatively constant. The major shift in the labour force from agriculture to industry and services is expected to continue and accelerate, which means that over one million workers will leave agriculture every year for the foreseeable future. At present:
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Agriculture:20% of GDP |
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Industry: over 40% |
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Services: under 40% |
The population of Vietnam is increasing at a rate of about 1.1% a year. The total population grew from 70 million in 2000 to an estimated 91 million in 2010, and is projected to increase to 97 million by 2015 and 101 million by 2020.
Economic growth increased from 6.8% a year in 2000 to about 10.0% a year from 2003-2005, reaching 11.4% in 2007 before dropping back to 6.1% in 2008 with the start of the worldwide economic recession. Consistently strong economic growth, together with limited population growth, more than doubled per capita incomes from USD390 in 2000 to USD890 in 2008. Vietnam halved the proportion of the population below the poverty line, from about 20% in 2000 to less than 15% in 2010.
The structural shift out of agriculture into industry has contributed to substantial increases in labour productivity. However, productivity growth in industry ranks the lowest among ASEAN countries. Low industrial productivity is a reflection of low skill levels in the labour force, among other things.
Vietnam has decreased in competitiveness over the past five years, slipping from 64th place to 75th on the Global Competitiveness Index (out of 134 countries). The level of competitiveness tends to be correlated with levels of education and training. Vietnam's net secondary enrolment (61%) exceeds all ASEAN countries except Thailand and Malaysia. However, Vietnam ranks below Thailand, Indonesia and Malaysia in vocational education and training (VET) at secondary level: 5% compared with 16%, 14% and 6% respectively.
In Vietnam, the shift in employment accounted for nearly 37% of the country’s average productivity growth of five per cent. Productivity in agriculture increased at an annual pace of 4.2%. However, productivity growth in industry was less than one per cent and ranked the lowest among ASEAN countries. Low industrial productivity, amongst other factors, reflects low skill levels in the labour force.
Small and medium enterprises are highly important in Vietnam, accounting for over three quarters of employment, one fourth of value added, and one fifth of exports.
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