This article is an extract from our latest publication Vietnam 2016: Frontier in Transition, available to download here.
When China embarked on its ambitious reform programme in 1978, its urban population as a percentage of overall population soon grew above that of its southern neighbour. Following initiation of Vietnam’s Doi Moi in 1986, a similar trend emerged.
Source: United Nations Department of Economic and Social Affairs
While it is expected that Vietnam will not be a majority urbanised economy until the 2040s, population growth led by migration will be felt heavily in the country’s economic hubs. When the Asian Development Bank carried out a study of the demand for mass rapid transit in Ho Chi Minh City and the adjoining Long An, Dong Nai, and Binh Duong provinces, it projected that the population would grow from nine million in 2007 to over 13.8 million by 2025, of whom 10 million will live in Ho Chi Minh City.
Agriculture to Manufacturing
This wave of urbanisation is going hand-in-hand with a reduction in the proportion of the population working in agriculture. As migrants move from rural areas to the cities, they are leaving behind low value-added jobs in agriculture and boosting the economy through engaging in Vietnam’s new drivers of growth.
Source: General Statistics Office of Vietnam
Source: General Statistics Office of Vietnam
Manufacturing now employs 14 percent of Vietnam’s workforce, and manufactured products lead the way in exports. Vietnam’s top exports for the first 11 months of 2015 were telephones, mobile phones and parts, textiles and garments, and computers, electrical products and parts. From January to November 2015, Vietnam’s total exports reached over $148 billion in value.
Vietnam’s Multiple Minimum Wages
Minimum wages in Vietnam are low, and determined according to location in four zones. In Zone 1, which includes urban centres Hanoi and Ho Chi Minh City, monthly minimum wages are set at VND3.5 million ($155). The outskirts of these cities and others make up Zone 2, where minimums are set at VND2.75 million ($122). Monthly minimum wages in Zones 3 and 4 are set at VND2.4 million ($106) and VND2.15 million ($95) respectively.
This article is an extract from our latest publication ‘Vietnam 2016: Frontier in Transition’. Download a free copy by filling in your details below:
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