Vietnam says more jobless in 2009

Dec 23, 2008, 8:04 GMT

   Hanoi - The global economic crisis is leading to the first large-scale job losses in Vietnam's export-oriented economy in years, government officials said Tuesday.

   However, thorough labour statistics are not gathered in Vietnam, and officials offered differing estimates of the damage.

   'About 300,000 people will lose their jobs or face reduced working hours next year,' said Nguyen Dai Dong, head of Vietnam's Labour and Employment Agency.

   Dong said that estimate was based on the effects of an expected reduction in gross domestic product (GDP) growth from over 8 per cent in 2008 to 6.5 per cent next year.

   He said the agency did not know how many people enter Vietnam's labour force each year, making it impossible to assess the effect on the country's unemployment rate.

   Deputy Minister of Labour Nguyen Thanh Hoa did have an estimate of yearly labour force entrants: about 1 million.

   'But no one calculates how many people leave the work force' due to retirement, death or other reasons, Hoa said, meaning unemployment still cannot be assessed.

   To complicate matters, Vietnamese media Tuesday widely misreported Dong's estimate of 300,000 lost jobs as 3 million.

   'Reporters should learn how to do math,' Dong said.

   What is clear is that Vietnamese businesses are shedding jobs rapidly as export orders slow.

   Electronics company Canon's Hanoi factory last week announced it would cut 2,000 jobs. Japanese company Nissei Electric eliminated 300 jobs at its Hanoi factory earlier this month.

   In Ho Chi Minh City, the country's economic capital, employers cut 30,000 jobs in November alone, according to the city's chapter of the national labour union.

   Vietnam's government set a target of 1.7 million new jobs in 2009, but officials said slow growth meant at most 1.4 million were likely to be created. It was not clear whether that gap was the source of Dong's figure of 300,000 lost jobs.

   This month Vietnam's government said it would begin offering unemployment insurance for the first time. But while workers will begin paying into the unemployment fund on January 1, the fund will not begin paying out benefits until after the first 12 months of contributions.

   Beneficiaries will receive up to 60 per cent of their previous salary.

   Unemployment is particularly high in Vietnam's countryside.

   'We planned to reduce the unemployment rate in cities to under 5 per cent, and under 50 per cent in the countryside, but this rate is unrealistic due to the global economic crisis,' said Hoa.