Viet Nam: how the crisis is hitting migrant workers in globalization’s poster child economy

March 26, 2009

     By Duncan Green     

As we approach the London Summit on 2 April, I’ll be putting up some findings from research Oxfam has been doing on the impact of the crisis in a range of developing countries. First up, some early results from our hyperactive Viet Nam team on the impact of the global crisis on what has been one of the world’s most successful economies in recent years. A joint research exercise between the Vietnamese Academy of Social Sciences and Oxfam, supported by the World Bank, conducted a rapid qualitative assessment at several sites in and around Ha Noi in February 2009 to identify any emerging impacts of the global economic crisis.  Sites were chosen to capture the groups where substantial first round impacts were expected i.e. a sample of five “mobile labour markets” in Ha Noi, two export-oriented craft villages (Bat Trang and Ha Thai), and Thang Long Industrial Park. 105 people were interviewed in total.

What did they find? Overall, thousands of migrant labourers who have flocked to Ha Nao from the Vietnamese countryside are facing reduced income, and many are returning home. In the mobile labour market, there are fewer jobs, especially in civil construction (which used to be their primary source of work). Although daily wages in late 2008 increased by 10-20 percent compared with late 2007 to respond to the increased cost of living, the average days worked per month fell by around 50 percent in the same period.

Craft villages, which rely significantly on exports, have seen a sudden decrease in orders since late 2008. Interviews with commune/village leaders and enterprise owners in Ha Thai lacquer and Bat Trang ceramic/porcelain villages reveal that around 70-80 percent of craft sale revenue is from exports. Sale revenue in Ha Thai already dropped by 35-40 percent in 2008, as compared with 2007. Craft workshops are laying off thousands of low-skill migrants in order to retain their core of skilled artisans.

Informal enterprises are being hit particularly hard as they cannot access government stimulus programmes – they have no investment plan at this difficult time and often work on the basis of informal transactions without adequate paperwork to show to the banks.

Many export firms in the Thang Long Industrial Park report decreased sales. Some of the enterprises have cut labour costs by reducing the number of employees and working time (i.e. let the workers take turns staying home, only receiving 70 percent of the basic wage). The representative of the developer (landlord) of Thang Long says that of 50,000 workers in the Park, 3000 have lost their jobs since late 2008; and the current demand for new workers is zero. Other sources report an even larger number of job losses. Migrant workers constitute 70% of the workforce in Viet Nam’s industrial parks, and so are particularly hit.  Companies are looking for excuses to fire workers, rather than pay redundancy and other benefits, and now offer only short term contracts with fewer labour rights attached.

That’s the analysis for wonks – here are some real people

‘Normally I buy meat for my children 3-4 times per month. But since Tet this year, I have received much less work, thus could not buy meat. The little money I earn is only sufficient for some oil, vegetables and some soya curd every meal”.

‘If the difficult situation continues and my husband and I can not remit enough money home, my elder girl may have to quit schooling to go to Ha Noi to work as a housemaid to sustain the schooling of my two younger children”.
[Interviews with two women day labourers]

“we have low education, no skills, little farmland at home; thus our only choice is to follow this work. If we come back home what we will do? Just sit looking at each other? How to earn money for our living ?”.
[male day labourer]

The research is continuing, so I’ll keep you posted as stuff is published.