Năng lực cạnh tranh của lao động xuất khẩu việt nam trong thị trường đông bắc á so sánh giữa các nước ASEAN

luận văn

Thai Nguyen University

Socialist Republic of Vietnam

Southern Luzon State University Republic of Philippines

COMPETITIVENESS OF VIETNAMESE LABOR EXPORT IN NORTH-EAST ASIA MARKET: A COMPARISON

ACROSS ASEAN COUNTRIES

A Dissertation Presented to the Faculty of the Graduate School Southern Luzon State University, Lucban Quezon, Philippines

In Collaboration with Thai Nguyen University, Socialist Republic of Vietnam

DEDICATION

This piece of work is dedicated

To My Family

ACKNOWLEDGMENT

The researcher wishes to extend her most sincere gratitude to the following

people who made this piece of work a reality

Dr Cecilia N Gascon, President of Southern Luzon State University, Republic

of the Philippines, who made possible the linkage with Thai Nguyen University and

the offering of Doctor of Business Administration, through the ITC-TUAF;

Dr Dang Kim Vui, the President of Thai Nguyen University, who made the

linkage with Southern Luzon State University, Republic of the Philippines and the

offering of Doctor of Business Administration, through the ITC-TUAF;

Dr Alice T Valerio, for her support and supervision throughout my graduate

study program Her kindness and daily instructions in the last three years are greatly

appreciated and this dissertation is as much her work as mine;

Prof Nordelina Ilano, Director, Office for International Affairs of URS for her

support to the DBA1 students;

Dr Tran Thanh Van, the Dean of the Graduate School of Thai Nguyen

University, for his assistance and encouragement to pursue this study;

Dr Dang Xuan Binh, the Director of International Training Center, for his

assistance and encouragement to pursue this study;

Dr Nguyen Thanh Hai, the Vice Director of International Training Center, for

his assistance and encouragement to pursue this study as DBA Class Manager;

To all the SLSU and TNU Professors, for their support and guidance extended

throughout the graduate studies in Thai Nguyen University, Vietnam;

To his ever dearest friends for their kindness and remarkable support;

To his family, for their support, encouragement for being the sources of

greatest inspiration, which made his career a success

ABSTRACT

In recent years, the world has witnessed the economic recovery of a number of

countries affected by financial crisis in the period 2008 to 2009 International

economy is in ongoing strong growth, but unemployment all over the world puts

pressure on labor and jobs Each year, Vietnam economy have more than 1 million

new labors and labor status is always excessive as we mention before Exporting labor

is essential way to solve this issue and earning foreign currency for economy

Competition happen in everywhere and every sectors, including labor export Hence,

determining competitiveness of Vietnamese labor is a key point to develop

With this point of view, the dissertation proposes a system of a set of

criteria to evaluate the competitiveness of labor export Base on these indicators,

the dissertation evaluated competitiveness of labor export under two points of

view: Direct assessment of international employers and indirect evaluation by

comparing capacity of labor export and qualifications of international employers

In addition, the dissertation compared the perceived competitiveness of labor

export across countries and markets

Further, the dissertation uses multivariate regression equation to evaluate

fully factors affecting to competitiveness of export labors in North-East Asia

market Base on these analyses, the dissertation proposes value recommendations

to improve competitiveness of Vietnamese labor export They are highly value

information for government in building plans and strategies of labor export

Keywords: Competitiveness, Labor export, ASEAN, North-East Asia

TABLE OF CONTENTS

APPROVAL SHEET ii

DEDICATION iii

ACKNOWLEDGMENT iv

ABSTRACT v

TABLE OF CONTENTS vi

LIST OF TABLES viii

LIST OF FIGURES x

CHAPTER 1 INTRODUCTION………1

Background of the Study 1

Statement of the Problem 5

Objective of the Study 7

Hypothesis of the Study 8

Significance of the Study 8

Scope and Limitation of the Study 9

Definition of Terms 10

2 REVIEW OF RELATED LITERATURE AND STUDIES 14

Related Literature 14

Related Studies 32

Conceptual Framework 43

3 METHODOLOGY… 45

Research Design 45

Time and Place of Study 46

Sampling 46

Respondents of the Study 47

Data collection 48

Research Instruments 48

Methods of Analysis 50

4 RESULTS AND DISCUSSION… 53

5 SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS.100 Summary of Findings .100

Conclusions 103

Recommendations 104

BIBLIOGRAPHY 107

QUESTIONNAIRE 112

APPENDIX .121

CURRICULUM VITAE 123

LIST OF TABLES

2 Mean distribution of respondents’ perception in terms of academic

performance following citizen

57

3 Mean distribution of respondents’ perception in terms of academic

performance following working sector

58

4 Mean distribution of respondents’ perception in terms of technical

5 Mean distribution of respondents’ perception in terms of technical

8 Mean distribution of respondents’ perception in terms of Performance

9 Mean distribution of respondents’ perception in terms of Performance

10 Mean distribution of respondents’ perception in terms of working

11 Mean distribution of respondents’ perception in terms of working

12 Mean distribution of respondents’ perception in terms of working

13 Mean distribution of respondents’ perception in terms of working

14 Mean distribution of respondents’ perception in terms of compliance

15 Mean distribution of respondents’ perception in terms of compliance

with compliance with labor contract following working sector 74

16 Mean distribution of respondents’ perception in terms of average

17 Mean distribution of respondents’ perception in terms of average

18 Mean distribution of JAPANESE employers’ perception in terms of

19 Mean distribution of KOREAN employers’ perception in terms of

20 Mean distribution of TAIWANESE employers’ perception in terms of

21 Mean distribution of INTERNATIONAL employers’ perception in

22 Ranking of factor priority in term of International employers’

LIST OF FIGURE

competitiveness of labor in the Vietnamese market 44

Chapter 1 INTRODUCTION

Background of the Study

In the last some years, the world has witnessed the economic recovery of a

number of countries affected by financial crisis in the period 2008 to 2009

International economy is in ongoing strong growth However, the unemployment all

over the world puts pressure on labor and jobs Obtaining the moving regular of

international labor market, Vietnam already offered specific policies and resolutions

to expand some new labor markets In particular, the Communist Party of Vietnam

and its Government defined that labor and specialist export is an important external

economic sector and is also a part of handling employment policy This policy is put

in the annual target by the Congress

Expanding the labor export market is a suitable economic development

direction with an open integration path This expansion takes part in handling jobs for

the laborers throughout the nation Labor exportation contributes to eliminate famine

and reduce poverty The remittance from about a half million employees, including

technicians and unskilled employees who live in 40 countries and regions, contributes

a lot to the national budget (approximately 1.6 billion dollars per year) Recently,

labor exportation strongly develops and positively participates in handling

employment policy, increasing income, creating stabilization and developing the

country However, the requirements for labor exportation is stricter and stricter

regarding labor qualification, workmanship, work regulations and foreign language,

especially for works in workshop, factory Nowadays, Vietnamese laborers who work

overseas basically match foreign demands but their skills and qualifications are still so

limited that this makes it hard to attack any developed economy’s labor market

Hence, what we must do is to make Vietnamese labor strong and to affirm our

trademark in international market It requires the real action of the government, the

enterprises, the managers, and the employees interested in labor exportation

There are many factors, which influence the labor export Firstly, the

economic crisis dramatically influenced the context in which a growing number of

international migrants had begun to spread from poorer to more industrialized

countries Secondly, the universalization also affects labor export in a positive way

Thirdly, competitiveness is one main influence on labor export In addition, global

labor market is also very important factor

The labor market is a generalized concept denoting the interaction between the

supply (number of persons available for work) and the demand (number of jobs

available) and the wage rate The high-income countries are always the potential

destinations for migrant workers

Labor export in recent years has been one effective solution to generating

employment, helping to increase workers' income and earning foreign currency for the

country According to the Department of Overseas Labor (DOLAB) (2011) which is

under the direct management of the Ministry of Labor, Invalids and Social Affairs

(MOLISA), since 2001 more than 295,000 Vietnamese have gone to work abroad,

bringing the total number of Vietnamese workers in foreign countries to 400,000 In

2005, the country sent nearly 70,600 workers abroad, a 5 percent year on year

increase The overseas workers have remitted about 1.6 billion USD to the country

The labor export sector is one of Vietnam's 1 billion USD export value earners

Labor export has also helped generate jobs in related services, such as job and

foreign language training, thus reducing the pressure of the matter of employment for

workers in the country Labor export businesses have annually contributed to the State

budget tens of billions of VND from their profits and management fees

The number of Vietnamese workers in traditional markets has remarkably

increased, including more than 30,000 workers in the Republic of Korea, 10,000

workers in Malaysia, 90,000 workers in Taiwan, and 20,000 workers in Japan

Vietnamese workers have been also sent to Canada, United States of

America, Australia, Italy and some Middle Eastern countries These new markets are

attractive for their high wages and proper worker protection laws (DOLAB, 2011)

Vietnam has licensed more than 100 businesses for labor exports, including

40 businesses specializing in labor supply Many businesses of ministries and

localities have sent large numbers of workers abroad and have taken a high level of

responsibility for their workers, particularly in reducing risks (DOLAB, 2011)

According to MOLISA (2011), in the coming years, Vietnam has a chance to

expand markets for labor exports as the world labor market is in great need of foreign

workers, for a variety of work in construction, manufacturing, electronics assembly,

garment and textile, services, hospitality, health care, domestic labor, sea transport,

fishing, seafood processing, forestry and agriculture, which are suitable to Vietnamese

workers

Vietnam now has more than 44 million people of working age, with about 1.2

million more people per year reaching working age, a major resource of work force

supply for the domestic and foreign labor markets According to foreign employers,

Vietnamese workers are industrious, clever and creative The rate of exported workers

given job training has increased from 35 percent in 2003 to nearly 50 percent in 2005

(DOLAB, 2011)

The Ministry of Labor, Invalids and Social Affairs plans to promote the

education and job training for export, and prevent breaches in of the law on labor

exports and instruct local authorities to promote cooperation with businesses in the

recruitment of labor for export Exporting labor to wealthier parts of the world has

long been something in which Vietnam has lagged behind its Asian neighbors, but the

government hopes to change that soon As the government sees it, labor exports could

help to ease the country's growing burden of unemployment, as well as alleviate

poverty It is now pushing to have the number of Vietnamese overseas workers soar

over the next few years At the same time, the country is already grappling with the

social costs of the campaign: poor people are getting into debt to pay for overseas

trips and workers abroad are becoming vulnerable to abuses (MOLISA, 2011)

Last year, Vietnam exported nearly 15,000 workers, who sent home some

US$220 million Many countries like Malaysia, Middle East countries, Laos, Japan,

Taiwan, South Korea and Libya, employed in construction, manufacturing industry,

sea transport, seafood processing, hospitality, health care, home service, fishing

industry, forestry and agriculture (MOLISA, 2011)

Falling GDP growth and dwindling foreign investment inflows are largely to

blame for the rising number of jobless workers Compounding the problem is an

administrative reform drive that plans to slash the government payroll by 15 percent,

and growing redundancies from loss-making state-owned enterprises (DOLAB,

2011)

But it is among farming households, which account for more than 70 percent

of the population, that unemployment could have the most severe long-term

consequences As the rural community swells and less new land becomes available

for cultivation, unemployment is becoming a widespread problem, resulting in

large-scale unplanned migration to cities (DOLAB, 2011)

It is young, largely unskilled laborers that the government is targeting for

export But while overseas employers may consider it a plus that they cannot

command high wages, these workers' relative lack of skills in comparison with those

from other countries is a major drawback, as is their inability to converse or

understand a foreign language (DOLAB, 2011)

These shortcomings are already proving problematic for labor exporters here

Although meager benefits were among things cited as the main recruitment hurdles,

the foreign employers also set high qualification requirements Applicants had to meet

specific health and age requirements, have a sound knowledge of English, hotel

industry skills and work experience but successful applicants get low, and they have

had to endure a seven-day per week

Statement of the Problem

Each year, Vietnam economy have more than 1 million new labors (GSO,

2011), and labor status is always excessive as we mention before Hence, exporting

labor is essential way to solve this issue and earning foreign currency for economy

Competition happen in everywhere and every sectors, including labor export Hence,

determining competitiveness of Vietnamese labor is a key point to develop However,

articles which discuss about this issue are very rare

Therefore, this study focused on three main concerns First, this paper will

compare competitiveness of Vietnamese labor export with other three countries:

Philippines, Indonesia, and Thailand Hence, we can see the gaps between

Vietnamese and other candidates within ASEAN in term of academic performance,

technical skill, communication skill, working seniority, working attitude, and

compliance with labor contract

Second, this study aimed to determine evaluation of international employers

from Taiwan, Japan and South Korea to Vietnamese labor export In addition, we also

can see comparison between Vietnamese, Filipinos, Indonesian, and Thai about

competitiveness and their factors More importantly, qualifications of international

managers about imported labor are expressed clearly Hence, we can understand

strength and weakness of Vietnamese labor, troubles in exportation process and the

gaps of quality we must try achieving

Third, the level of impact and priority in selecting applicants were interpreted

fully and clearly Hence, this paper will give some suggestions for both governmental

and local administration to improve competitiveness of labor export that will lead to

an increase in labor export

Specifically, this study sought to answer the following questions:

1 What is the profile of the respondents in terms of age; sex, health status,

civil status, preceding jobs, weight, height, and work area?

2 What is the level of competitiveness of labor export across countries in

terms of academic performance, technical skill, communication skill,

performance rating of previous employers, working seniority (in previous

companies), working attitude, and compliance with labor contract as

perceived by the workers and the employers?

3 Is there any significant difference between the level of competitiveness of

labor export as perceived by the international employers and the

international workers?

4 Is there a significant difference in the perceived competitiveness of labor

export across countries?

5 What are the factors that affect labor competitiveness?

Objectives of the Study

The study aimed to evaluate the status and competitiveness of Vietnamese

labor in comparison with labor from other Asian countries

Specifically, this study aimed:

1 To describe the profile of the respondents in terms of:

d) Performance rating of previous employers

e) Working seniority (in previous companies)

f) Working attitude

g) Compliance with labor contract

3 To compare the perceived competitiveness of the labor export by the

international employers and the international employees

4 To compare the perceived competitiveness of labor export across

countries

5 To determine the factors affecting labor competitiveness

Hypotheses of the Study

The following hypotheses were tested in the study:

1 There is a significant difference in the competitiveness of labor export

across countries

2 There is a significant difference in the competitiveness of labor export as

perceived by the international employees and international employers

3 Competitiveness of labor export is significantly affected by academic

performance, technical skill, communication skill, performance rating of

previous employers, working seniority, working attitude, and compliance

with labor contract

Significance of the Study

The result of this study is envisioned to contribute knowledge to effective and

efficient management of labor export; hence, it will benefit the following:

For the international employers Based on analysis of this paper, Vietnam’s

government will build special action plans to improve competitiveness of Vietnamese

labors Hence, international employers can have better and more competitive labors in

the future

For the Vietnamese laborers This study will help them understand their

strong and weakness In addition, laborers also know the requirements from

international employers in term of academic performance, technical skill,

communication skill, performance rating of previous employers, working seniority (in

previous companies) and personal characteristics Hence, Vietnamese labors can

prepare and study to improve their abilities and easier to get success in the future

This will provide them with assessments and directions for a better future to apply to

working abroad

For the managers of exportation This research will help them in

understanding requirements of international employers These analyses will be very

important suggestion to build action plains for improving labor competitiveness of

Vietnamese labor The paper will build up the image, competitive advantage through

superior innovation, improve and meet expectations of international employers

For the Vietnamese government This paper will express current status of

Vietnamese labors in term of strength and weakness points; it also shows lots of

useful information about requirement of foreign labor importers It will be good bases

for Vietnamese government to plan labor development, especially export activities

For other researchers This study will help other researches to collect

necessary information in relation to their research fields Other researches will also

consider the limitations of this research to avoid in case they conduct the research in

same fields

Scope and Limitations of the Study

The study assessed the competitiveness of export labors among four countries

(Vietnam, Philippines, Indonesia, Thailand) in terms of the following major seven

variables: Academic performance, technical skill, communication skill, performance

rating of previous employers, working seniority, working attitude, compliance with

labor contract This paper considered North-East Asia market only, under evaluation

of three international employer groups, which include Japanese, Korean and

Taiwanese These main variables were due to the results of reviewing related

literatures and studies

Definition of Terms

Academic performance refers to the level of education (Primary school, high

school, undergraduate, post-undergraduate) of the respondents

Competitiveness is the ability of a firm or a nation to offer products and

services that meet the quality standards of the local and world markets at prices that

are competitive and provide adequate returns on the resources employed or consumed

in producing them (Business Dictionary, 2012)

Technical skill refers to the knowledge and abilities needed to accomplish

mathematical, engineering, scientific or computer-related duties, as well as other

specific tasks

Communication skills refer to capacities of using foreign language of

orientation country to communicate Knowing English will earn extra point

Seniority means that an employer considers date of hire a factor in deciding

workplace benefits like promotions, leave schedules, days off, shifts, overtime, and

selection for training

Demand for labor is a concept that describes the demand for labor that an

economy or firm is willing to employ at a given point in time This demand may not

necessarily be in long-run equilibrium, and is determined by the real wage, firms are

willing to pay for this labor, and the number of labor workers is willing to supply at

that wage

Job is a group of homogeneous tasks related by similarity of functions When

performed by an employee in an exchange for pay, a job consists of duties,

responsibilities, and tasks (performance elements) that are defined and specific; can

be accomplished, quantified, measured, and rated

Labor is the aggregate of all human physical and mental effort used in

creation of goods and services Labor is a primary factor of production The size of

a nation's labor force is determined by the size of its adult population, and the extent

to which the adults are either working or are prepared to offer their labor for wages

(Business Dictionary, 2012)

Labor force of a country (or other geographic entity) consists of everyone of

working age (typically above a certain age (around 14 to 16) and below retirement

(around 65) who are participating workers, that is people actively employed or

seeking employment People not counted include students, retired people,

stay-at-home parents, people in prisons or similar institutions, people employed in jobs or

professions with unreported income, as well as discouraged workers who cannot find

work

Labor market, the nominal market in which workers find paying work,

employers find willing workers, and wage rates are determined Labor markets may

be local or national (even international) in their scope and are made up of smaller,

interacting labor markets for different qualifications, skills, and geographical

locations They depend on exchange of information between employers and job

seekers about wage rates, conditions of employment, level of competition, and job

location (Business Dictionary, 2012)

Labor Supply is the total hours (adjusted for intensity of effort) that workers

wish to work at a given real wage rate From a Marxist view a labor supply is a core

requirement in a capitalist society In order to avoid Labor shortage and ensure a labor

supply, a large portion of the population must not possess sources of

self-provisioning, which would allow them to be independent, and they must instead be

compelled, in order to survive, to sell their labor for a subsistence wage (Dobb, 1947;

Harvey, 1989)

Northeast Asia and Northeastern Asia refers to the northeastern sub-region

of Asia In geopolitics, the Council on Foreign Relations defines Northeast Asia as

China, Japan, North Korea, and South Korea

Productivity is defined in terms of utilization of resources, like material and

labor In simple terms, productivity is the ratio of output to input For example,

productivity of labor can be measured as units produced per labor hour worked

Productivity is closely linked with quality, technology and profitability

Unemployment defined by the International Labor Organization, occurs when

people are without jobs and they have actively sought work within the past four weeks

(International Labor Organization, 2007)

Unemployment rate is the percentage of the total labor force that is

unemployed but actively seeking employment and willing to work

The Association of Southeast Asian Nations (ASEAN) was established on 8

August 1967 in Bangkok, Thailand, with the signing of the ASEAN

Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN, namely

Indonesia, Malaysia, Philippines, Singapore and Thailand Brunei Darussalam then

joined on 7 January 1984, Vietnam on 28 July 1995, Lao PDR and Myanmar on 23

July 1997, and Cambodia on 30 April 1999, making up what is today the ten Member

States of ASEAN

Working attitudes express motivation and profession in workplace This

variable is usually evaluated by some indicators, such as amount of reward respondent

receive within a year, number of late attendance within a month, number of absent

within a month and number of punishment within a year

Academic performance or academic achievement is the outcome of

education - the extent to which a student, teacher or institution has achieved their

educational goals

Technical skill is knowledge and abilities needed to accomplish

mathematical, engineering, scientific or computer-related duties, as well as other

specific tasks Those with technical skills are often referred to as "technicians" in their

chosen field, i.e audio technicians, electronics technicians, engineering technicians,

etc

Communication skills refer to activity of conveying information through

speech, writing, or other behavior In this paper, it mention about foreign language

capacity

Working seniority is the length of time that an individual has served in a job

or worked for an organization or other company Working seniority refer to

experience you have in a particular mission or job

Chapter 2 REVIEW OF RELATED LITERATURE AND STUDIES

Process of Labor Exportation

Vietnam’s international cooperation process in labor sector started in 1980, by

performing Decree 46/NDCP, February 11th 1980, of Cabinet Council on sending a part of laborers to work overseas and to improve skills in socialist countries Since

that time, adapting to development process of our country, this exportation is more

and more developed and is divided into some periods:

From 1980 to 1990, Vietnamese workers were mainly sent to socialist

countries in Eastern Europe, including Soviet Union, German Democratic Republic,

Czechoslovakia and Bulgaria, Iraq, Libya and specialists in medical, educational and

agricultural sectors were sent to work in some African countries The cooperation on

using labor between Vietnam and these countries must respect the government

agreement and is executed by a centrally planned mechanism Vietnamese

government directly selects employees and specialists who are engaged to work in

factories, medical and educational offices in receiving countries

Labor exportation policy in this period was “to create jobs for a part of

Vietnamese youths”, “by labor cooperation with other countries, Vietnamese labor’s

skills could be improved and Vietnamese labor could satisfy the requirements for

economic development” (Resolution 362/CP, November 29th 1980, Cabinet Council) and “to recommend specialists to aid the developing countries in Africa and Middle

East” (Resolution 263/CT, July 24th 1984, President of Minister Council) These documents do not refer yet to economic benefit

The total number of employees and specialists moving abroad in this period is

about 300,000, including 244,186 workers to Socialist countries in Eastern Europe;

20,000 employees to Iraq; 7,200 specialists to the Countries in Africa; and 23,713

apprentices and college students in Eastern Europe countries

From 1991 to 2000, the sixth Party Congress (1986) initiated a

comprehensive renovation policy for the country and defined that “expand labor

exportation in many suitable methods, consider that is a part of general labor

program” Simultaneously, at the end of 1980s and the beginning of 1990s, in

Socialist countries in Eastern Europe which received our labor resource faced huge

political changes so there were so many changes in political institutions and economic

structures; in some African countries there was economic and political crisis; war

happened in Iraq, hence most of these countries did not have the need for recruiting

Vietnamese workers and specialists If there was still demand, they did not receive

labor in government agreement To resolve this problem and to adopt the new

renovation policy, labor and specialist exportation mechanism were also ameliorated,

changed from focused planning mechanism to distingue mechanism between the

government management and companies’ business operation The Government

offered policy and mechanism to manage the operation of companies; companies

could license, sign contracts, select employees, send and manage labor overseas

Also from 1991 to 2000, the government offered three decrees on labor

exportation: (a) Decree 370/HDBT, September 20th 1991, offered the regulations on sending Vietnamese labor to work oversea temporarily In this decree, labor

exportation was executed by contracts that Vietnamese organizations signed with

foreign organizations Decree 370/HDBT did not clearly stipulate conditions for

economic organizations permitted to license; (b) Decree 07-CP, January 1st 1995,

detailed some articles of labor law on sending Vietnamese labor to work oversea for a

definite period This decree stipulated that only state – owned companies were

licensed and detailed about their budget conditions for licensed companies; and (c)

Decree 152/ND-CP, September 20th 1999, stipulated about Vietnamese laborers and specialists working oversea for a definite period This decree had some huge

mechanism changes in comparison with Decree 07/CP: Clearly stipulated conditions

on budget, operation, staff for company; employees who had direct contracts with

foreign employer could go to work overseas after registering contracts at the local

labor offices Moreover, in this period, Vietnamese laborers were sent to new markets

such as Korea, Japan, and Taiwan The number of moved labor was not huge but

increased year by year In 10 years, 121,752 persons were moved to work oversea

On September 22nd 1998, the Ministry of Politics offered Instruction No CT/TW on labor exportation, this instruction claimed that “exportation of laborers and

41-specialists is a socioeconomic action that helps to develop the human resources, create

jobs and income, improve employees’ skills and increase foreign currency for our

country Besides most of jobs were created in interior, labor exportation was an

important policy in the long term to help to reinforce labor force for development

country in industrialization and modernization period”

Since 2000, the government’s Decree No 152/ND-CP, September 20th 1999, prescribed on sending Vietnamese laborers and specialist to work overseas for a

definite period continued to come into effect Although new decrees allowed only

state-owned enterprises to license labor exportation, the government allowed having

trial license for some private companies

In 2002, the Congress agreed with the modified labor law with 6 more articles

on labor exportation July 17th 2003, the government offered Decree No 81/ND-CP

replacing Decree 152/ND-CP This decree permitted Ministry of Labor, Invalids and

Social Affairs to license for state-owned companies and joint-stock companies which

the state owned most of its stocks, simultaneously suggested Prime Minister to

approve license for other companies

On September 8th 2004, Prime Minister had decision No 163/2004/QD-Ttg on establishment, management and using aid fund for labor exportation to develop labor

exportation market oversea, improve competitive quality and ability of Vietnamese

labor and reduce risks for employees working oversea On November 11th 2005, the government offered Decree No 141/2005/ND-CP on the management of Vietnamese

labor working overseas

To improve government management on labor exportation, the Congress

accepted the law on Vietnamese labor working overseas under contracts, has come

into effect since the July 1st 2007 This law had full and clear regulations on sending labor working overseas: through companies with license of labor exportation, through

companies that awarded in bidding, received bid or invested in foreign country,

through companies that sent trainees oversea and through state offices Licensed

companies were opened, not distinguishing state-owned company or private company

Conditions to be licensed were strictly stipulated

Status of Vietnamese Labor Exportation

The legal system were step by step completed and now the legal system is

unified and overall to conduct labor exportation (law on Vietnamese labor working

overseas under contract and legal instructions to execute law such as decree, decision,

and circular There had been mechanisms and policies to encourage labor exportation

(Credit policy and supporting educational fee for labor, etc.) The Government’s

management on labor working overseas is improved (administrative process is

renovated in quick, simply, direct and transparent method to decrease negatives and

defrauds of labor exportation; activities to protect the interests of labor are well cared

for The market to export Vietnamese labor is more and more expanded and

reinforced (nowadays, Vietnamese laborers live and work in over 40 countries and

regions); we focus on well-paid labor market

The role of foreign affairs in exploiting and searching markets is initially

focused; co-ordination between state offices in management and protection of the

interests of labor is stricter and quicker The system of labor exportation companies is

set up in good order and becomes professional Some dynamic companies invest to

expand their markets in deep direction; encourage and mobilize all of economic

elements to take part in labor exportation (there are about 150 companies in all

economic elements involving in);

The number of labor working oversea regularly increases year by year Up to

now, there have been about 500,000 employees working in over 40 countries and

regions in over 30 categories of professions In the last few years, the average number

of labor working oversea is 83,000 people per year, occupied about 5% of the labor

having jobs The remittance from laborers working overseas has increased more and

more to contribute a lot to the national fund (about 1.7 billion dollars in 2007)

Quality of selection, professional education for labor before working overseas

are improved step by step (content, education program, foreign language, support

necessary knowledge for labor are renovated to be suitable for objects and

requirements of each market); rate of qualified labor working overseas is more and

more improved

Many laborers gain good experiences about techniques and modern production

technology so when they come back to Vietnam, they can effectively use these in

production, business, increasing productivity and income Improving quality of labor

working overseas gradually In the end of 2003, the number of qualified laborers

before working overseas is about 35%; this number is over 50% up to now

Companies have paid more attention to educating laborers before their departure to

work overseas; the system of colleges and educational centers for training labor

working overseas has been established (see Appendix Table 1)

Vietnam signed many conventions, agreements on labor cooperation with

many countries and regions receiving Vietnamese labor to establish legal frames for

labor exportation, management and protection of the labor’s interests Forming system

of labor exportation companies: there are 156 companies licensed to export labor

overseas up to now Among these companies, there are about 30% operating

effectively, bring thousands of employee go abroad per year, 50% operating quite

well The last is company which has just set up, in completion period, its efficiency is

limited (see table 1 in appendix)

Management and protection in the interests of Vietnamese labor working

overseas are improved and focused The system of management of Vietnamese labor

working overseas includes: Representative office for foreign affairs, board of labor

management or professional staff to manage labor at representative office and

representative of companies System of representative offices presented in all of

receiving countries Board of labor management is established in 7 countries and

regions where there are many Vietnamese labors Moreover, in market where there

are many Vietnamese labor most of labor exportation companies have representative

offices to manage, protect the interests of labor and timely resolve problems of labor

Propaganda operation about labor exportation is enforced Thanks to this

operation, awareness of state offices and labor about labor exportation is improved;

transparence and openness in labor exportation is increased; degradation in labor

exportation is limited Establishing system of labor exportation companies by

contracts:

With a completed legal system on labor exportation matching the national and

international requirements, Vietnamese labor exportation companies are set up and

became a system of which the number is bigger and mechanism is more divers step by

step Initially there are only state-owned companies, after there are also sociopolitical

companies After trial period and offering law of labor exportation, the number of

private companies licensed is increased so much Most of state-owned companies are

transferring to private companies

In 1990s (last century) most of labor went to work overseas through labor

exportation companies Since 2005 to now, due to contribution of center of overseas

labor cooperation and labor working overseas by private contracts, the number which

companies brought to overseas decreased year by year, but occupied about from 84%

to 90% (see Appendix Table 2)

There is significant development in operation size and quality: With operation

experiences and effects in investment, there are more and more companies having

remarkable development in operation size and quality: First, Staff, profession and

foreign language teacher significantly increases to adapt the expanding demand and

management demand Second, Qualification and professionalism of staff in many

companies are increase Thus, most of companies having at least 10 years’ experience

search markets, negotiate contracts themselves, they develop many new markets,

bring a huge number of labor working overseas, timely resolve to changes of market,

handle problems, risks related to labor Third, Many companies start investing,

educational cooperating to prepare high qualified human resources, some companies

cooperated with foreign partners to educate according to market demand Fourth,

Some companies develop, improve working facilities to educate labor; renovate staff,

structure, is interested in enhancement qualification of staff

In the period of economic globalization and expanded market economics,

moving labor flows over border are complex and globalized more deeply In

evaluation documents of International Organization of Migration – IOM, there are

about 185 million people; approximately 3% of medial populations live outside

territory of their own country In this number, there are 85 million persons migrate for

jobs (Labor and Society Magazine, No 319)

The first form is exportation labor This form is moving labor from one

country to others, is taken in official arrangement between two countries to take part

in labor market in this country Foundation to decide the number of labor, career,

gender and age… is demand from original country’s labor market Vietnamese labors

who work in Malaysia, Taiwan, and Korea… belong to this object These employees

work in specific time and it is basically that they will come back to home country

after deadline of contract In few next years, Vietnam basically continues to be a

exporting labor country not importing labor country (DOLAB, 2011)

The second form is moving free labor in unified labor market of a country’

union Having an unified market requires an unification of economic environment

between countries Unification process takes place in five stages:

First stage: countries in Union have trade references for each other, second

stage: create a free trade area, third stage: build a customs union, fourth stage:

establish a joint market and fifth stage: establish economic union Nowadays,

European Union is the unique union already finished 4 stages in economic unification

process All markets of members, included labor market, are joint and unified market

and conducted by joint legal system for the whole union This moving labor form only

is in interior economic union In WTO regulations, there is no agreement related to

this moving labor form Although Vietnam participated in WTO, this moving labor

form is still in future

The third form is natural person moving to run the trade services This is one

of compulsory agreement to participate in WTO The fundamental issue is not

whether to have agreement about natural person moving form, it is how is open

agreement and in which path it is operated This is most debatable issue related to

labor moving between Vietnam and others in next years The most difficult problem is

how to distinguish between labor moving form and natural person moving form This

is duty of policy makers One object is conducted by labor law and other object is

conducted by trade law These two objects cannot become the only one because their

target, nature and status of moving over border are different, so there is no joint rule

for both objects So when we discuss about labor exportation, we need clearly

discriminate both moving forms

The view about labor exportation in different countries is also particular In

Vietnamese’ view, labor exportation in economic aspect is one service providing

special good, labor force It fully contains nature and require of special good which

are labor force and total of society relationships Price of this labor force depends on

demand of labor importing country In political aspect, labor exportation is

cooperation and aid to build and develop socioeconomics of labor importing country

Differently to other services, the essential requirements are not only personal virtue,

qualifications, foreign language skills but also adaptable competence to ensure the

Vietnamese oversea labor’s future This is the reason why oversea labor must respect

law and well adapt to community of receiving country It ensures each person to be

appreciated, loved and also home country’s status will be enhanced It reinforces and

improves the relationship and solidarity between two countries

Labor exportation is a quite sensitive action because it directly relates to

human Hence, labor exportation makes some unified opinions Due to different views

and approaches, the evaluation views about this issue are alternative In this topic, we

research labor exportation in view “labor exportation is a service providing special

good is labor force It fully contains nature and require of special good which are

labor force and total of society relationships” and labor exportation is an effective

resolution to create jobs and to acquire foreign currency in next time

The overseas workers have been facing the following difficulties: (a) limited

information before departure, little awareness of migrant rights, how to protect and

solve problems, little understanding of traditions and culture during work abroad in

host country, particularly in the new US and European markets; (b) communication

problems particularly in English; (c) poor working conditions, especially in Malaysia;

(d) they are more vulnerable to be trafficked through illegitimate labor export

companies Little information of undocumented workers was reported by the

government even as many exploitation cases have been presented by the media; (e)

high cost of recruitment fees as workers mostly borrow from relatives or from

non-banking sources at a much higher interest rate They do so, however, as working

abroad will enable them to earn much higher salaries than working in Vietnam

(Glantz & Nguyen, 2006); and (f) the workers have been terminating their contracts

and working illegally Recently, the manpower companies are facing a tough

challenge in Taiwan, South Korea and Japan, as workers are independently moving to

higher paying jobs or residing there illegally Among the reasons for this are high

pre-departure expenditures, a great amount of debt, earning a much higher income,

and little opportunity to work abroad again after returning to Vietnam The labor

export companies worry about this issue in new markets such as the United States as

it may cause them to stop receiving Vietnamese workers Therefore, the solution to

prevent workers from escaping from labor export contracts is to have the workers’

pay a deposit to the companies returned only when they complete the contract and

return to Vietnam

About social impact, currently, it is a common phenomenon in many rural

households for husbands to seek jobs far away from home (including working

abroad), leaving their children to be looked after by their parents and wives In

addition, women themselves are also leaving home to work abroad or seek work in

urban areas and send money back to their rural families while their husbands take

over the duties of caring for children and looking after the house (Tien & Ngoc,

2001)

In addition, Most of returned migrants cannot use the skills and experience

from abroad after they return In many cases, respondents remained working as

rubbish collectors

However, in terms of labor export policy, the national authority is more

concerned with the targets in terms of quantity As a result, quality has become an

urgent issue as importing manpower countries are raising standards on imported labor

Moreover, the policy on labor export does little to settle the problems that increase

during the time working abroad and when workers return

According to Adam Smith (1776), author of book The Wealth of Nations, the

classical perspective on competition was that certain agreements and business practice

could be an unreasonable restraint on the individual liberty of tradespeople to carry on

their livelihoods Restraints were judged as permissible or not by courts as new cases

appeared and in the light of changing business circumstances Hence the courts found

specific categories of agreement, specific clauses, to fall foul of their doctrine on

economic fairness, and they did not contrive an overarching conception of market

power Earlier theorists like Adam Smith rejected any monopoly power on this basis

Further, A monopoly granted either to an individual or to a trading company

has the same effect as a secret in trade or manufactures The monopolists, by keeping

the market constantly under-stocked, by never fully supplying the effectual demand,

sell their commodities much above the natural price, and raise their emoluments,

whether they consist in wages or profit, greatly above their natural rate Adam Smith

(1776)

By the latter half of the nineteenth century it had become clear that large firms

had become a fact of the market economy, John Stuart Mill (1859) in 's approach was

laid down in his treatise On Liberty According to his theory, trade is a social act

Whoever undertakes to sell any description of goods to the public, does what affects

the interest of other persons, and of society in general; and thus his conduct, in

principle, comes within the jurisdiction of society both the cheapness and the good

quality of commodities are most effectually provided for by leaving the producers and

sellers perfectly free, under the sole check of equal freedom to the buyers for

supplying themselves elsewhere This is the so-called doctrine of Free Trade, which

rests on grounds different from, though equally solid with, the principle of individual

liberty asserted in this Essay Restrictions on trade, or on production for purposes of

trade, are indeed restraints; and all restraint, qua restraint, is an evil (John Stuart Mill,

1859)

After Mill, there was a shift in economic theory, which emphasized a more

precise and theoretical model of competition A simple neo-classical model of free

markets holds that production and distribution of goods and services in competitive

free markets maximizes social welfare This model assumes that new firms can freely

enter markets and compete with existing firms, or to use legal language, there are

no barriers to entry By this term economists mean something very specific, that

competitive free markets deliver allocative, productive and dynamic efficiency

Allocative efficiency is also known as Pareto efficiency after the Italian

economist Vilfredo Pareto (1848) and means that resources in an economy over

the long run will go precisely to those who are willing and able to pay for them

Because rational producers will keep producing and selling, and buyers will keep

buying up to the last marginal unit of possible output - or alternatively rational

producers will be reduce their output to the margin at which buyers will buy the same

amount as produced - there is no waste, the greatest number wants of the greatest

number of people become satisfied and utility is perfected because resources can no

longer be reallocated to make anyone better off without making someone else worse

off; society has achieved allocative efficiency Productive efficiency simply means

that society is making as much as it can Free markets are meant to reward those

who work hard and therefore those who will put society's resources towards

the frontier of its possible production (Galbraith, 1967)

Dynamic efficiency refers to the idea that business which constantly competes

must research, create and innovate to keep its share of consumers This traces to

Austrian-American political scientist Joseph Schumpeter's notion that a "perennial

gale of creative destruction" is ever sweeping through capitalist economies, driving

enterprise at the market's mercy (Joseph, 1942)

Contrasting with the allocatively, productively and dynamically efficient

market model are monopolies, oligopolies, and cartels When only one or a few firms

exist in the market, and there is no credible threat of the entry of competing firms,

prices rise above the competitive level, to either a monopolistic or oligopolistic

equilibrium price Production is also decreased, further decreasing social welfare by

creating a deadweight loss Sources of this market power are said to include the

existence of externalities, barriers to entry of the market, and the free rider problem

Markets may fail to be efficient for a variety of reasons, so the exception of

competition law's intervention to the rule of laissez faire is justified Orthodox

economists fully acknowledge that perfect competition is seldom observed in the real

world, and so aim for what is called "workable competition" This follows the theory

that if one cannot achieve the ideal, and then go for the second best option by using

the law to tame market operation where it can

A group of economists and lawyers, who are largely associated with

the University of Chicago, advocate an approach to competition law guided by the

proposition that some actions that were originally considered to be anticompetitive

could actually promote competition The US Supreme Court has used the Chicago

School approach in several recent cases One view of the Chicago School approach to

antitrust is found in United States Circuit Court of Appeals Judge Richard Posner's

books Antitrust law and Economic Analysis of Law, Posner (2011) once worked in the

Department of Justice's antitrust division, has long been a professor at the University

of Chicago Law School, and is likely the most widely cited antitrust scholar and jurist

in the United States

Bork (1978) was highly critical of court decisions on United States antitrust

law in a series of law review articles and his book The Antitrust Paradox.Bork argued

that both the original intention of antitrust laws and economic efficiency was

pursuit only of consumer welfare, the protection of competition rather than

competitors Furthermore, only a few acts should be prohibited, namely cartels that

fix prices and divide markets, mergers that create monopolies, and dominant firms

pricing predatorily, while allowing such practices as vertical agreements and price

discrimination on the grounds that it did not harm consumers Running through the

different critiques of US antitrust policy is the common theme that government

interference in the operation of free markets does more harm than good (Frank, 1984)

"The only cure for bad theory", writes Bork, "is better theory" The late Harvard Law

School Professor Phillip Areeda, who favours more aggressive antitrust policy, in at

least one Supreme Court case challenged Robert Bork's preference for

non-intervention (Brooke, 1993)

Concept of Productivity

Productivity is the ratio of output to input Hence, there is a strong stress on

productivity improvement in competitive business environment Productivity can be

improved by (a) controlling inputs, (b) improving process so that the same input

yields higher output, and (c) by improvement of technology These aspects are

discussed in more detail in the lesson on Productivity Management Productivity can

be measured at firm level, at industry level, at national level and at international level

Productivity can be treated as a multidimensional phenomenon The modern

dynamic concept of productivity looks at productivity as what may be called

“productivity flywheel” The productivity is energized by competition Competition

leads to higher productivity, higher productivity results in better value for customers,

and these results in higher share of market for the organization, which results in still

keener competition Productivity thus forms a cycle, relating to design and products to

satisfy customer needs, leading to improved quality of life, higher competition i.e

need for having still higher goals and higher share of market, and thereby leading to

still better designs

The production runs of these higher valued specialty items and custom

designed products are often much shorter than for traditional mass produced goods

But the non-productive time (downtime) required to set up equipment for producing

different options, new models and new products are very costly So production

facilities must be designed with the utmost flexibility to accommodate change overs

in rapid fashion This is where computers, robotics come into play

German executives understand the need for a strong technological focus and

the dangers of hierarchical bureaucracies and paper profits Studies reveal that over 50

per cent of Germany’s large manufacturing firms are managed by Ph.D.’s with

technical backgrounds In recent years, the managerial techniques and productivity

methods in Japanese firms have attracted worldwide attention

Labor Competitiveness

Campbell (2007) showed that some aspects of the contribution of higher levels

of education increased labor productivity by the results of an analysis of data obtained

from a sample of tuna cannery workers in Madang, Papua New Guinea (PNG) One

possible contribution to increased labor productivity lies in more highly educated

people being more likely to be able to move from the informal sector of the economy

to the formal sector, but the analysis is unable to measure this effect since the sample

is drawn from workers in the formal sector only Two other possible effects, which

can be measured by the analysis, are that, of those workers who do move into the

formal sector, the more highly educated workers are more likely to be appointed to

more productive (or skilled) positions, and that more highly educated workers will be

more productive in whatever position, skilled or unskilled, they attain

His results of the analysis suggest that more education is associated with an

increased probability of getting a skilled position and earning a higher wage if hired

The expected value of the higher wage as a result of an extra year of schooling is

179.53 kina per annum which is 6.8% of the sample average wage, and as a result of a

tertiary qualification is 388.08 kina per annum which is 14.73% of the sample average

wage The earnings functions estimates suggested that extra schooling also places the

skilled worker higher in the wage distribution of skilled workers, but has no effect on

unskilled worker’s wages The pooled earnings functions indicated that the difference

between the mean wages of skilled male and female workers was mainly attributable

to the sex difference and differences in education levels However the differences in

earnings attributable to sex were not thought to be the result of sex discrimination in

the workplace but rather to more general economic and social conditions (Campbell,

2007)

Hunt and Morgan (2001) developed a new theory of competition which is

evolving in the strategy literature The “strategy dialogue”, having already produced a

new theory of the firm, is evolving toward a new theory of competition His purpose

has been to identify the foundations of this new theory and its implications for

marketing The set of 10 foundational premises, they propose, the grounds for the

comparative advantage theory of competition Although these premises, taken

individually, have been discussed by others at numerous times in many places, this

article is the first to place them into a cohesive theory Contrasting the theory’s

premises with those of neoclassical perfect competition facilitates understanding the