INTRODUCTION 1. The rationale of the Thesis For the recent decades, every country in the world has been experiencing the rapid development of economic globalization and trade liberalization. That has resulted in free flows of goods, capital, and labor. The movement of labor across country borders, also known as “labor export”, has brought about significant economic value and social benefits to developing countries including Vietnam. The State and the Party have always considered labor export as an important sector of external economic and a part of the national policy to create jobs for laborers, reduce poverty and unemployment. Labor export is also influenced by the global economic fluctuation, especially the world’s 2008 economic crisis (hereinafter to be referred to as the “2008 economic crisis”). The 2008 economic crisis, which rooted from the financial crisis in the U.S and spread in international scale, has been posing tough challenges on Vietnam’s labor export activities in the context of increasing competition in the international labor market. While the labor exporting countries in the region, that share similar conditions, are struggling to dominate the market, the labor receiving countries tend to reduce imports of unskilled labor and increase imports of skilled labor. Therefore, since the 2008 economic crisis, Vietnam’s labor export has encountered a lot of difficulties due to market loss. The fact that laborers have to repatriate early has raised a concern with complicated implications not only to the Government but labor exporting enterprises, local authorities, and laborers’ families. How to regain market for Vietnam’s labor export? How to create jobs for laborers who have to early repatriate and to promote labor export in the context of global economic crisis, especially in the upcoming time? To seek for appropriate answer to the questions, it is essential that we study the impact of the 2008 economic crisis on Vietnam’s labor export, thus to come up with feasible solutions to overcome the difficulties and promote labor export. For the aforementioned reasons, the topic on “Vietnam’s labor export before and after the world economic crisis in 2008” has been chosen by the author for her PhD Thesis. 2. Status of research: 2.1 In the world There are a lot of researches on different aspects of labor migration, issues regarding the global economic crisis, and labor export, etc. in the world. However, there has not been any published research with the same topic as that of this doctoral Thesis. The published researches serve as useful reference source for the author to complete this Thesis. There are some prominent works such as: Why some Companies Emerge Stronger and Better from a Crisis: 7 Essential Lessons for Surviving Disaster (Book, published in June, 2009) by Ian I. Mitroff, The real reason for the global financial crisis… the story no one’s talking about (Article, published in 2008) by Shah Filani. The works are about 7 lessons that companies should learn in order to promptly respond to the global economic crisis, how to make advantage of the very crisis and how to become stronger and better. In some other studies of labor export, authors have analyzed the role of labor export to the country, the impact of their remittances as well as the issues arising from the labor immigration. Among all, the outstanding study was The Impact of Labor Immigration on households (Published in 1992) by GodFrey Funatilleke. However, the materials deal with more theoretical than practical aspects of the topic. W.Edwards Deming, author of Out of Crisis (a study published in July, 2009) on an analysis of the impact of global economic crisis on labor market has concluded that the 2008 economic crisis would decide upon the existence of many markets, including labor market; as well as would simultaneously result in employment and unemployment in many economies. Moreover, the Thesis has addressed some questions that have never been raised by any foreign researchers, specifically: What are the causes of the 2008 economic crisis? How does the 2008 economic crisis impact on labor export activities in the world in general and on Vietnam’s in particular? 2.2 In Vietnam With regard to labor export, there have been a lot of studies and researches conducted by Vietnamese authors on the following topics: Labor Export and the National Employment Program – Actual status and Solutions (Published in 2007) by 2 Nguyen Phuc Khanh, Solutions for Vietnamese Enterprises to Overcome Challenges and Achieve Goals in 2008 (Published in the Labor and Social Affair Magazine, Vol.329 in 2008) by Nguyen Luong Trao, Achievements, Limitations, and Problems Challenging the Government management of Labor Export Activities in Vietnam (Published in the Magazine of the Institute for European Studies in 2011) by Nguyen Thi Huyen; Improving the Competitiveness to Expand and Maintain the Market Share of Labor Export in the New Context (Published in 2012) by Nguyen Luong Trao. However, this Thesis adopts a different approach to the necessity of improving efficient management of labor export and solutions to promote labor export as compared to these studies and researches. In the aforementioned researches, Vietnam’s labor export is analyzed in different dimensions. However, there is not yet a systematic and comprehensive research, both theoretically and practically, on Vietnam’s labor export before and after the 2008 economic crisis in order to come up with solutions to boost labor export in Vietnam in the new context – the post-crisis period. This could be said of as the first Doctoral on this topic. 3. The Objectives and Missions of the Thesis 3.1 Objectives The Thesis pursues the following main objectives: - Address the theoretical and practical issues of Vietnam’s labor exports before and after the 2008 economic crisis. - Assess the actual status of Vietnam’s labor export before and after the 2008 economic crisis. - Highlight the impacts of the 2008 economic crisis on Vietnam’s labor export. - Propose some solutions to boost up Vietnam’s labor export in the coming time. 3.2 Missions To fulfill the aforementioned objectives, the Thesis establishes its specific missions as follows: - To clarify both theoretical and practical aspects of labor export, the 2008 economic crisis, its impacts on labor export activity on the national and international scale. - To assess the actual status of Vietnam’s labor export before and after the 2008 economic crisis; to highlight the positive and negative impacts of the crisis on labor export of Vietnam. - To address causes of inefficiency of Vietnam’s labor export for the past due to the economic crisis. 3 - To recommend solutions and directions to minimize negative impacts and enhance positive impacts of the crisis, aimed at promoting Vietnam’s labor export in the post-crisis period. 4. Subject matter and scope of research 4.1 Subject matters of the Thesis are the issues related to Vietnam’s labor export before and after the 2008 economic crisis, particularly the Government policy for development of labor export before, during and after the 2008 crisis. The Thesis also provides an analysis of experiences of selected countries on how to enhance labor export. 4.2 Scope of research - Substantive aspect of the Thesis: The research conducted within the framework of this is restricted to analyzing impacts (both positive and negative) of the 2008 economic crisis on Vietnam’s labor export activities in the form of direct export, i.e. sending Vietnamese laborers (experts, trainees and interns) overseas to work for a definite period of time in a legal and organized manner on the basis of the Government agreements, business contracts of enterprises licensed to export labor, bid award contracts, further training contracts and private contracts. - Spatial aspect of the Thesis: The Thesis selects the Philippines, Indonesia, and India to explore their experiences on labor export and draw out lessons for Vietnam as the Philippines and Indonesia are members of the ASEAN while India is a successfully developing country in Asia which has created comparable advantages in the international labor market thanks to its strategy of exporting IT professionals. - Scope of time: The Thesis studies the actual status of Vietnam’s labor export from 2003 till now; then the author proposes some solutions to boost up labor export of Vietnam in the upcoming time (from now to 2015 and 2020). 5. Methodology - The Thesis was completed using two research methodologies: dialectical materialism and historical materialism; on the basis of the viewpoints of the Party and the Government on labor export. - The Thesis adopts the methods of systematization, analysis, commentary, statistics, and comparison to make a comparison of application practices of labor exporting enterprises in Vietnam based on the theoretical background introduced in Chapter 1 and the actual status of labor export in Chapter 2 in order to come up with a comprehensive analysis of labor export. 4 - In addition, the author also used another methods of sociological survey and expert consultation to gain knowledge on the role of labor export, thus seeking for solutions to support and complete Vietnam’s policy framework for labor export in the post-crisis period. 6. Scientific Contributions of the Thesis - Systemize and clarify theoretical issues related to labor export, especially the definition of labor export; - Analyze impacts (both positive and negative) of the 2008 economic crisis on labor export in general and labor export activities in Vietnam in particular; - Analyze the actual status of Vietnam’s labor export before and after the 2008 economic crisis; - Propose solutions and directions to minimize negative impacts as well as enhance positive impacts of the 2008 economic crisis to boost up labor export of Vietnam in the upcoming time. 7. Structure of the Thesis Apart from the preface, list of abbreviation, list of figures and charts, references, and appendices, the Thesis consists of three chapters: Chapter 1. Several theoretical and practical issues regarding labor export before and after the 2008 economic crisis. Chapter 2. Actual status of Vietnam’s labor export before and after the 2008 economic crisis. Chapter 3. Standpoints, directions and solutions to enhance Vietnam’s labor export after the 2008 economic crisis. CHAPTER 1: SEVERAL THEORETICAL AND PRACTICAL ISSUES REGARDING LABOR EXPORT BEFORE AND AFTER THE 2008 ECONOMIC CRISIS 1.1. THEORIES OF LABOR EXPORT 1.1.1. Definition and characteristics of labor export 1.1.1.1. How to define labor export? Labor export means to sell labor to foreign markets. As labor always goes with laborers, in order to export labor, the first thing that needs to be done is to send laborers abroad to enable them to sell labor to foreign employers. Vietnam does not have a Law on Labor Export but has adopted a Law on Vietnamese laborers working 5 overseas. In 2006 Vietnam adopted a Law on Vietnamese laborers going abroad to work on a contractual basis (which was ratified by the National Assembly of XIth Legislature on November 29, 2006 and came into effect in July 1, 2007). This Law introduced the concept of "sending laborers overseas to work". Pursuant to its Article 1, this Law governs the activities of “sending laborers overseas to work on a contractual basis; provides for the rights and obligations of laborers working overseas on a contractual basis; rights and obligations of enterprises and non-profit organizations sending laborers overseas to work on a contractual basis and of other relevant organizations and individuals. Labor export is defined as follows: Labor export, which in its essence is export of goods being labor, means to send laborers overseas to work for a definite term on a contractual basis or under an agreement entered into between relevant parties in accordance with the law of both sending and receiving countries in order to create physical and mental wealth to both employees and employers. 1.1.1.2. Characteristics of labor export First, labor as an item of goods, subject matter of labor export - With regard to the quality: The quality of labor as goods is reflected in terms of skills, experiences, workmanship, durability and the endurance of an employee’s labor. In assessing the quality of labor as a goods item, there are three factors that need to be taken into consideration including i) an employee’s health which depends on one’s age, ii) his/her qualifications, skills, expertise and creativity and iii) his/her working environment or workplace conditions. - With regard to the nature of labor as a goods item: As labor export is a form of service exports, the quality of labor as a goods item cannot be determined through the quantitative criteria, and, on the contrary, must be assessed by using another set of criteria (including an employee’s responsiveness, experience, creativity as well as his/her working, living and resting conditions overseas). Second, characteristics of the labor export market There exist a cooperation and also a competition between businesses and economic organizations within a country which are authorized to send laborers to work overseas, and also among various labor-exporting countries. It is more likely for a country that possesses a source of high quality and professional laborers and more diversified labor services that can meet expectations of foreign employers to attract more contracts, spend 6 less on brokerage and generate more incomes for its laborers. Third, characteristics of the relationship between various parties involved in labor export activities From the first dimension being the international level of the relationship that involves labor exporting and labor importing countries, the relationship between the parties involved in labor export activities is quite complicated because the parties have to interact with laborers in both labor exporting and labor importing countries. This requires an adequate set of policies for import export and import is developed by the two countries to ensure a balance of interest of all stakeholders. The second dimension only relates to labor exporting countries only where labor export activities give rise to a tripartite relation that involves employees, the State and labor exporting organizations. Fourth, price nature of labor as labor as a goods item and limitations of its uses This demonstrates the difference between exports of labor as a goods item and exports of ordinary merchandise. The value of labor as a goods item consists of 3 components (i) the value of subsistence materials necessary to reproduce labor of employees themselves, (ii) the value of subsistence materials necessary for employees to feed their families, (iii) the costs of vocational training for employees and the costs of meeting their spiritual and cultural needs. Labor export is a fixed-term activity and once the contract therefor is terminated employees are still able to sell their labor to the employers in need. This is called labor re-export. Fifth, criteria for assessment of the labor export efficiency The purpose of this Thesis is not to study the efficiency of labor export but the impact of the world 2008 economic crisis on labor export in general and that of Vietnam in particular with an aim to come up with appropriate solutions to enhance labor export at the post-crisis time. As labor export targets at a type of goods which is human labor, its efficiency should be viewed from perspectives of economic and social efficiency. More specifically, economic efficiency of labor export will be assessed using economic criteria which link to the benefits of stakeholders (including employees’ income either accrued or remitted to their families; turnover and profits of labor exporting enterprises; labor export turnover; contributions to the State budget from labor export activities). 1.1.2. Forms of labor export 7 1.1.2.1. Pursuant to the basis of their arising: labor exports are divided into 5 categories including labor export on an agreement basis, labor export under contract, labor export in the model of association, labor export under an order of labor exporting enterprises and labor export under a contract for refresher or internship. 1.1.2.2. Pursuant to the quality of labor as a goods item: - Export of simple labor is the form that involves untrained laborers with low qualifications, cheap prices and bad quality. - Export of trained labor means a form of exporting laborers who have been trained at vocational training schools. There is a tendency of increased demand in the international labor market for this form of labor export. - Export of highly qualified laborers is a form of exporting only experts, scientists, technicians etc. 1.1.2.3. Pursuant to the movement of labor as a goods item: - Direct labor export means labor immigrates into another country or is sent overseas to work for a definite term. - On-the-spot labor export means laborers live in their own countries but work for foreign enterprises or economic organizations employees in the country. Labor export in Vietnam currently takes place in the following forms: - Contracts for sending laborers to work overseas entered into with enterprises authorized to provide services of sending laborers overseas to work. - Contracts for sending laborers to work overseas entered into with bid-winning or contracting enterprises or outbound investment organizations and or individuals engaged in sending laborers to work overseas; - Contracts for sending laborers to work overseas in the form of refresher courses entered into with enterprises licensed to send laborers to work under the form of internship or refresher; - Private contracts directly entered into between an individual and an overseas employers. 1.1.3. Role and impact of labor export 1.1.3.1. For labor exporting countries - Labor export plays an important role in job creation and implementation of welfare policies in favor of laborers: A majority of laborers sent overseas to work comes from rural areas, or is being unemployed or underemployed. - Labor export has impact on the shift of the economic structure: Via labor 8 export, a group of laborers have improved their skills as a result of working overseas, making contribution to setting up a team of workers with industrial style who comply with labor rules, have expertise and working skills, foreign language capacity… Once this group of laborers repatriates, they shall better meet investors’ requirements and gradually will make a great contribution to a more logical movement of the economic structure. - Labor export helps to improve the quality of a part of human resources: Via labor export, laborers working in plants and enterprises would have modernized industrial style, be familiar with science-based production management methods and get better access to the external world. Thus, after the time working overseas, their skills and sense of compliance with labor rules become better, working style becomes more professional and foreign language improves. This makes a great contribution to improving a part of laborers’ resources both in the receiving and home countries. - Labor export promotes external economic relationships: labor export is playing greater and greater role as a catalyst of the international economic integration and international labor division. External economic relationships have paved the way for expanding labor export. Labor export also serves as a bridge among cultural exchange activities, enhances mutual understanding between nations and improves political standing and reputation of the labor exporting countries in the international arena. The important role of labor export in labor exporting countries is undeniable. However, labor export also has negative impacts on the socio-economic life of a labor exporting country as follows: - Labor Export might cause partial shortage of local labor. In some labor exporting countries, labor export may cause temporary scarcity in the areas that need simple or skilled labor particularly in the countries or sectors with high economic growth rate or increased labor export without a plan for sustainable development of human resources. The phenomenon of "brain drain" seems to increase as a result of a rise in exports of highly qualified laborers causing many difficulties for labor exporting countries, particularly the developing countries which are undergoing the cause of national industrialization and modernization. - Labor export might have adverse impact on social safety and security: When a laborer is sent overseas to work, in addition to the positive aspects, they are also 9 exposed to negative practices of the receiving country. They repatriate together with these bad habits and will consequently have a negative impact on the social life at home. The foreign currency amount remitted by them sometimes is not used effectively leading to social disorders. - Labor export might increase criminals: Due to a loose management of labor export and given the low target of labor export while the applicants for overseas employment is increasing, some labor exporting enterprises have committed improper actions such as bribery, corruption or frauds, and in some cases laborers must to pay excessive prices, through export labor intermediaries, to be able to work in a high-income market/country. This also contributes to the increases in crimes and affects the social security and safety. 1.1.3.2. For labor importing countries - Labor import helps to address the labor shortage issue of the labor importing country: Labor import has improved the situation of labor scarcity in the receiving country, increased labor supply, released the supply-demand stress in the labor market particularly for hard jobs which domestic laborers do not want to do or are not used to. - Labor import saves the initial costs of investments in laborers: Without labor import, a labor importing country would have to expend on nurturing and training domestic workers until they reach the labor age. Import of skilled workers helps to save a significant amount of training costs for the importing country. - Labor import contributes to the economic growth and social accumulation: Imported laborers, while being engaged in production and consumption at the labor importing country, make a certain contribution to the socio-economic development of the host country via their payments of income tax, social insurance, health insurance and fees of other types etc which results in an increase in the social accumulation of the host country. In addition to the above mentioned benefits of labor import to the importing country, labor import also makes the importing country exposed to the following disadvantages: - Labor import may cause delays in the application of scientific advances and technological renovations: As employers too much rely on the low-cost imported unskilled labor, they pay little attention to the application of scientific and technical 10 [...]... from the above analysis, the world economic crisis in 2008 was the outcome of a uncontrolled race for profits that pushed the economy into recession and brought about a new economic crisis being the world 2008 economic crisis 1.2.2 Implications of the world economic crisis in 2008 to labor export 1.2.2.1 Negative impact of the world economic crisis in 2008 on labor export 1.2.2.2 The world economic crisis. .. Vietnam’s labor export under the impact of the 2008 economic crisis shall reach the number of 100,000 people in 2015; and 120,000 people by 2020 3.2 STANDPOINTS ON AND DIRECTIONS FOR THE DEVELOPMENT OF VIETNAM’S LABOUR EXPORT IN THE COMING TIME 3.2.1 Standpoints on the development of Vietnam’s labor export in the coming time 3.2.2 Directions for the development of Vietnam’s labor export in the coming... This, on one hand, was the result of the shift in the structure of the State policy and mechanism, and on the other hand the efforts of businesses themselves to expand labor export market 2.1.1.2 Structure of exported labor By gender: During the years before the world economic crisis in 2008, Vietnam mainly exported male labor During the 2000-2007 period, the average number of male workers exported overseas... economic crisis in 2008 changes the supply of labor export 1.2.2.3 The world economic crisis in 2008 forces the labor exporting countries reconsider their mechanisms of organization, administration and management of labor export activities 1.2.2.4 The world economic crisis in 2008 causes a disorder in the labor export 13 1.3 LABOUR EXPORT EXPERIENCES OF SELECTED COUNTRIES 1.3.1 The Philippines 1.3.1.1... Malaysia and Singapore Thus, before the world economic crisis in 2008, Vietnam’s main labor 16 import markets were its traditional markets such as Malaysia, Taiwan, Korea and Japan 2.1.2 Actual status of Vietnam’s labor export after the 2008 global economic crisis until now 2.1.2.1 Quantity of exported labor Due to the implications of the world economic crisis in 2008, exported labor of Vietnam fell in number... education and techniques that involve labor export activities This is aimed at facilitating Indian professionals to use these services to the best when their laborers work overseas CHAPTER 2 ACTUAL STATUS OF VIETNAM’S LABOUR EXPORT BEFORE AND AFTER THE 2008 GLOBAL ECONOMIC CRISIS 2.1 ACTUAL STATUS OF VIETNAM’S LABOUR EXPORT BEFORE AND AFTER THE 2008 GLOBAL ECONOMIC CRISIS 2.1.1 Before the 2008 economic crisis. .. economic crisis, its labor market is going through a screening whereby the quality of laborers engaged in labor export shall decide the supply of labor export 1.1.4.3 Institutional, organizational and managerial arrangements for labor export activities: These factors are influenced by the policy, instruction and laws of both labor exporting and labor importing countries 12 1.2 THE WORLD 2008 ECONOMIC CRISIS. .. impact 19 on labor exporting enterprises 2.2.1.3 The 2008 economic crisis of the world has led to the reduction in Vietnamese laborers’ income and consequently to the drop in the national foreign currency revenues The decline of remittances due to unemployment of exported labor will increase poverty and widen the gap between the rich and the poor According to the World Bank (WB), in 2009 the source of... sending laborers to certain countries 1.3.3.2 Export of IT experts To continuously maintain its share in the export market of labor and IT professionals given ups and downs of supply and demand in the labor export due to the 2008 economic crisis, the Government of India has been proactively entering into cooperation agreements with various countries in the Middle East, Africa, Southeast Asia in the. .. Management and the Overseas Labor Management Agency in accordance with the policy and regulations of the host country and not to influence the public opinion in society 2.2.2.4 The 2008 economic crisis in the world also served as an opportunity for the State and labor exporting enterprises recognize to look back at the shortcomings and limitations in the management of labor export activities, and to come . Implications of the world economic crisis in 2008 to labor export 1.2.2.1. Negative impact of the world economic crisis in 2008 on labor export. 1.2.2.2. The world economic crisis in 2008 changes the supply. and after the 2008 economic crisis. - Assess the actual status of Vietnam’s labor export before and after the 2008 economic crisis. - Highlight the impacts of the 2008 economic crisis on Vietnam’s. status of Vietnam’s labor export before and after the 2008 economic crisis. Chapter 3. Standpoints, directions and solutions to enhance Vietnam’s labor export after the 2008 economic crisis. CHAPTER