vietnam’s labor export before and after the world economic crisis in 2008

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

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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.
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- 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.
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- 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
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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
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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
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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
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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
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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
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advances to production practices or to upgrading of working tools and appliances
resulting in them being stagnant in making reforms and adversely affecting the
modernization process of the labor importing country as a whole.
- Labor import might lead to the over-dependence of a number of industries
on imported labor: Actually, import labor only works for a short time, normally
between 3 and 5 years, therefore the number and qualifications of this labor source
are unstable, not to mention labor import very much depends on the Government
immigration policy and the socio-political situation etc. Therefore, this over-
dependence on import labor, in the long run, might have a negative impact on some
industries of the labor importing countries.
- Labor import creates a community of immigrant-workers, which introduces
both good and bad to the lifestyle and traditions of the domestic communities. This
affects the social order and security or might even cause loss of community
solidarity. More seriously, this can all lead to discrimination against nations/races
and undermine the relationship and friendship between nations.
1.1.4. Factors affecting labor export
1.1.4.1. Demand for labor export: Demand for labor export in some countries is
influenced by the needs of the labor market of the importing country, income, living
and working conditions of laborers overseas, or by the labor import policy of the labor
importing countries. There are also other factors such as religion, traditions and custom
as well as morality that have influence on demand for labor. When the demand for
import labor increases it would create a great dynamic for the growth of labor export
activities. When domestic production in a labor importing country is reduced and
unemployment rates gets higher, the demand for import labor will fall and as a result

labor export activities will have to face with market-related difficulties.
1.1.4.2. Supply of labor export: This depends on the quantity and quality of the laborers
ready to take part in labor export, and the labor export policy of each country. After the
world 2008 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.
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1.2. THE WORLD 2008 ECONOMIC CRISIS AND ITS IMPLICATIONS TO
LABOUR EXPORT ACTIVITIES
1.2.1. Definition, nature and cause of the world 2008 economic crisis
1.2.1.1. Definition of an economic crisis: A world economic crisis, also known as
the global economic crisis, is the serious decline of economic activities of which the
first manifestation is the rapid economic downturn that takes place on a
unrecoverable scale and cycles and which negatively sways the economy of multiple
nations and the whole world.
1.2.1.2. Nature of the world 2008 economic crisis
First, it is triggered by the financial and monetary crisis in the United States
Secondly, the US financial crisis has spread to most of European and other countries.
Thirdly, the US financial crisis has led to an economic crisis on a global scale.
1.2.1.3. Causes of the world economic crisis in 2008
First, potentially high risk implicit in the government easy policy allowing
commercial banks to conduct multiple operations
Secondly, lack of control of the US Government over the operation of new financial tools.
Thirdly, the US Government policy that allows speculative operations expand
and adversely affect the securities market.
Fourthly, the bubble in the real estate market and loss of control thereof by the
U.S. government.
As seen 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 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
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1.3. LABOUR EXPORT EXPERIENCES OF SELECTED COUNTRIES
1.3.1. The Philippines
1.3.1.1. Enhancement of the Government role in the management of labor export
activities The Government of the Philippines encourages private labor exporters to set
up their own labor funds to deal with cases when the laborers they brought overseas
are sent home earlier.
1.3.1.2. Strict management of the companies operating in the field of labor
recruitment for export The Government of the Philippines provides that laborers of
the Philippines working overseas shall be issued with a passport with a special seal of
the Labor Service Center under POEA. This provision has enabled the Government
of the Philippines to more strictly manage the exported laborers while they are living
and working overseas.
1.3.1.3. Adoption and implementation of multiple incentive policies for the laborers
lawfully working overseas. The Government issues a “Balik Manggagawa”
Certificate to exported laborers which guarantees their opportunity to work at their
previous workplaces before departures after their repatriation. With such a practical policy
of the government it is very rare that the Philippines laborers escape after the termination
of their overseas labor contract. This is one of very useful experiences that Vietnam can
learn from to treat its labor export activities.
1.3.2. Indonesia

1.3.2.1. Treatment of labor export as a national policy and a leading industry in the
socio-economic development strategy. The Indonesian government is directly en
charge of management of labor export activities via a management and operation
mechanism of overseas employment programs. The Ministry of Manpower and
Immigration of Indonesia was established with a task to license and supervise labor
export activities and to impose penalties on the violating private entities operating in
the field of labor recruitment for export.
1.3.2.2. Assignment of the task of labor recruitment for export to a State agency.
The Labor Recruitment Agency of Indonesia (PJTKI) under the Ministry of Labor is
the State agency in charge of recruiting and sending laborers overseas to work.
However, the role of PJTKI remains limited as the network only targets big cities, but
not poor people in rural areas where there is a great demand for labor export. This is
what Vietnam needs to consider if it plans to apply this experience.
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1.3.2.3. Establishment of an efficient mechanism to protect laborers during the
time they work overseas and upon their repatriation. Indonesia has set up a
specialized hospital to provide medical healthcare and treatment to Indonesian
laborers after their repatriation. Vietnam should consider taking this lesson.
1.3.3. India
1.3.3.1. Strict settlement of violations with appropriate penalties. The competent
agency might confiscate either part or whole of the deposits made by the
organizations or individuals engaged in labor recruitment for export upon their
violation of the commitments. In case of necessity, the Government might ask them
to cancel their labor supply contracts and prohibit them from 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 areas of health, 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
2.1.1.1. Quantity of exported labor
Vietnam has been sending laborers to work to overseas for 33 years. There is a
breakthrough in Vietnam's labor export in terms of number. Let’s split the 2000-2007
period into two phases taking 2004 as a milestone as this year marks a significant
decline in the number of labor export. In the 2000-2003 period, the number of
laborers working overseas rose sharply in 2003, reaching 75,000 people (62.6%
increase from 2002 and 107.03% from 2001). In 2003, due to the Iraq war and
epidemics of Severe acute respiratory syndrome (SARS), Malaysia and South Korea
stopped receiving workers from Vietnam April 1, 2003, whilst Taiwan imposed a
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restriction on visa issue to and strictly checked entry visa of Vietnamese workers,
however the number of exported laborers still increased very rapidly. 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 accounted for approximately 70% of the total
imports of Vietnamese labor. Vietnam is a country that exports too many male labors
and is trying to increase the proportion of female workers out of the total labor
export.

The above status is explained by the weal physical status and poor foreign
language capacity of Vietnam’s female labors, which makes it more difficult for
female workers to find jobs. Their domestic income is much lower than that of male
workers, moreover they do not have many chances to seek suitable jobs, this results
in their unsustainable income. These female workers mostly do some jobs such as
workers at textile and garment plants, family maids, hospital orderly etc
By skills: With regard to the skills of Vietnamese labor overseas, they have very
low skills or even no skills. A majority of them has only the primary education level
and few of them has secondary education level or has been trained before going
overseas to work.
By jobs: During the time before the 2008 economic crisis, Vietnamese labor
working overseas was always limited in terms of jobs. In the 2000-2007 period,
Vietnamese labors overseas did different types of jobs in the sectors of construction,
civil technology, heavy industry, light industry and seaborne transportation.
Imported labor of Vietnam mostly did manual works which did not require skills
or high qualifications such as construction workers, crewmen, mine workers, hospital
orderly or farmers. People doing these jobs did not generate high income and worked
in a very disadvantageous and even difficult environment.
2.1.1.3. Labor export market
During the pre-crisis time i.e. 2000-2007 period, the labor export market of
Vietnam was expanded to more than 40 countries and territories but the main market
was Asia with traditional labor importers of Taiwan, Japan, Korea, Malaysia and
Singapore. Thus, before the world economic crisis in 2008, Vietnam’s main labor
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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. In March 2013, Vietnam could send only 6,943 laborers
overseas to work (including 2,998 people to Taiwan; 1,563 people to Korea; 236
people to Japan, 842 people to Malaysia; 43 people to UAE and 92 people to Arab).
For the first three months of 2013, Vietnam only sent 19,814 people overseas to work
(Phong Cầm, 2013). As projected for the end of 2013 Vietnam, it is hard for Vietnam
to reach its set target of labor export.
2.1.2.2. Structure of exported labor
The percentage of unskilled workers dropped from 77.98% to 55.39%, while
there has been an increased in the percentage of trained workers from 22.02% to
44.61%, where the proportion of technical professionals and skilled workers
particularly increases from 2.44% to 12.49%. Types of jobs taken by exported
laborers have been diversified covering not only the sectors of construction,
industries and health care but also forestry, transportation, restaurant services, hotel,
golf courts, sales, building operation, security guards at supermarkets, restaurants,
shopping malls etc.
2.1.2.3. Labor export markets
In the Malaysian market: As a result of the world economic crisis in 2008,
since 2009 the law of Malaysia has become stricter and as a result in the labor market
of Malaysia there is no difference in income between laborers working on a
contractual basis and freelance workers. The number of workers who broke labor
contracts and ran out to work as freelance workers is not significant with the total
accounting for less than 1% of the total number of workers sent abroad.
In the Market of Taiwan: Due to fierce competition in the post-crisis time, in
2012 Vietnam sent only 30,533 people to Taiwan and 11,810 people in the first 4
months of 2013.
In the Korean market: As at January 2013, there seems to be a decrease, though
insignificant, in the number of Vietnamese laborers who broke their labor contracts. This
has exposed the Government and functional bodies of Vietnam to many challenges and
difficulties in order to come up with more specific, stronger and positive solutions to deal
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with the people who go to work and study in this market.
In the Japanese market: In 2013, Japan will increase the number of Vietnamese
laborers from 7,000 people (in 2012) to approximately 8,000-9,000 people in 2013.
(Phong Cầm, Tienphongonline dated February 7, 2013). This is seen as a good
opportunity to send more Vietnamese laborers to Japan to work in 2013 and the years
to come.
2.1.2.4. Forms of labor export
There have been specific changes in the forms that labor is exported. Before
the crisis, Vietnam preferred the labor exports conducted by enterprises and non-
profit organizations (accounting for 82%), but after the crisis this has been to 73%.
Labor export in the form of bidding and outbound investment accounted for only 8%
before the crisis but after that this number came up to 14.84%. Labor export in the
form of private contracts was only at 1% before the crisis but after the crisis this
number has increased to 4%
2.1.3. General comments on the actual status of Vietnam’s labor export since the
2008 economic crisis
2.1.3.1. Labor export market: Vietnam is still able to hold on to its key and
traditional labor export markets (including Malaysia, Taiwan, Korea, Japan). The
demand for labor import from Vietnam to these 4 markets remains high despite
certain changes in labor demand and supply after the world economic crisis in 2008.
With regard to Japanese market, as a result of changes in the relationship between the
two countries, Vietnam shall be more likely to promote labor exports to Japan in the
coming years with new and more diversified orders. These are the achievements and
success of Vietnam's labor export activities.
The biggest shortcoming in Vietnam's labor export both before and after the
crisis is the fact that more and more Vietnamese laborers tend to stay illegally in the
host country. Without strong and deterrent measures, this situation will adversely
affect Vietnam’s competitiveness in labor export and will make it more difficult to
maintain the market. At the same time, given the fact that supply of labor export on
the global scale is experiencing a redundancy and labor exporting countries are

finding ways to compete and have more access to more labor export markets, this
would become more and more vital.
2.1.3.2. Quality of exported labor and structure of jobs: Since the world economic
crisis in 2008, as a result of recognition of noticeable developments in supply and
demand for the quality of labor import sources, specifically all labor importing
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countries including the 4 above mentioned importers tend to have higher needs for
skilled workers and trained technical employees (marine officers, workers in IT
sector etc), especially for laborers with management skills (restaurant management,
building management ), for the recent years, the State and business community of
Vietnam has promptly shifted to exporting these types of labors. This is a significant
success in labor export activities at the moment particularly after the crisis. The
number of these employees, however, has not increased significantly.
2.2. ASSESSMENT OF THE IMPACT OF THE 2008 GLOBAL ECONOMIC
CRISIS ON VIETNAM’S LABOUR EXPORT
2.2.1. Negative impact
2.2.1.1. The 2008 economic crisis was the reason for early repatriation of a large amount
of Vietnamese laborers. 2009 continued witnessing the impact of the 2008 economic crisis
including a drop in the demand for labor export, unemployment of a substantial
proportion of labor and early repatriation of about 9,000 people overseas Vietnamese
workers due to unemployment (Nguyen Ngoc Quynh, 2009).
In Taiwan: Due to the impact of the 2008 economic crisis, Taiwan has cut
thousands of foreign workers including those from Vietnam (as a result of lay-offs,
workers got jobless, had no overtime payment or had to shift plants etc and this
amount of workers had to return home earlier). (Overseas Labor Management
Agency, 2010).
In Malaysia: Due to economic difficulties and shrinkage of the goods export
markets, many factories and plants had to narrow their production and reduce the
working hours. The Malaysian Government had to adopt a policy to deeply cut the
number of foreign workers in the country including Vietnamese workers.

In Japan: The economic crisis has caused a deadlock in Japan’s economy,
especially the manufacturing sector, the unemployment rate of the country in 2009
was at 4.4%, highest for the last 4 years. The worldwide labor cuts in general and in
some foreign markets in particular have resulted in a larger and larger amount of
Vietnamese laborers having to return home ahead of time.
2.2.1.2. The 2008 economic crisis of the world has cause a fall in the amount of
exported labor in Vietnam in most export labor markets. As a result, more and more
overseas Vietnamese got jobless and many of them refused to work overseas
although all the procedures had been completed. Some laborers even broke their
contracts due to the economic crisis (factory lay-offs, workers had no job, factory
workers changed to other factories due to lay-offs etc). This had a substantial impact
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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 remittances was reduced by about 0.9% which was
6% in the worst scenario. The reason was workers did not want to remit money home
through official channels due to a decline in the public trust in the stability of the
banking system (Bich Thao, 2009).
2.2.1.4. The 2008 economic crisis in the world has caused many losses to
Vietnamese labor exporting enterprises. Vietnamese labor exporting enterprises are
now very distressed by a great amount of laborers that have to be repatriated early;
late implementation or impossibility to fulfill the contracts that they have entered
with foreign companies (partners). This, in turn, had an impact on domestic human
resources as well as on the guidelines for and policy on poverty reduction; negatively
affected the relationship between Vietnam and other countries. The crisis has also
caused a delay in the implementation of bilateral agreements on labor export that

have been entered with other partners.
2.2.2. Positive impact
2.2.2.1. The 2008 economic crisis has stimulated the dynamic responsiveness and
sharpness of labor exporting enterprises to find a new way out Many labor
exporting enterprises have been actively seeking and exploiting new markets other
than the 4 traditional key markets; many labor exporting enterprises have properly
responded to the fact that many laborers had to early repatriate; in some markets
when the crisis seemed to get better some receiving countries started to offer new
orders; some labor exporting enterprises tried hard to negotiate reductions in
brokerage fees for laborers and to enter into new orders that might result in practical
benefits in terms of income, employment and rights to laborers.
2.2.2.2. The 2008 economic crisis in the world was an opportunity for the State
management agencies to prove their ability to flexibly respond to the fluctuations
in the world economy. The Ministry of Labor, War Invalid and Social Affairs
(MOLISA) has given instructions to take appropriate solutions to stabilize the export
labor market, continue sending new workers overseas and prepare well for the
promotion of labor export activities when the world demand for labor increases; By
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way of issuing new documents, all the new matters arising in relation to overseas
workers, particularly when they have to repatriate early, have been addressed and
dealt with in a more effective manner.
2.2.2.3. The 2008 economic crisis in the world has activated the creativity of many
labor exporting enterprises in Vietnam in a way they deal with new matters arising
in relation to overseas workers who have to repatriate early
Due to the world economic crisis in 2008, a lot of Vietnamese laborers were
forced to repatriate early. Also, many disputes arose between workers and employers
and labor exporting enterprises. Labor exporting enterprises very much supported
those who repatriated early by completing procedures to liquidate their labor
contracts. These enterprises monitored the market very closely in order to detect and
address newly arising problems and protect the legitimate rights and interests of

laborers, this would also help to avoid complaints that might undermine labor export
activities. Enterprises that have a large number of overseas laborers always took
prompt actions, upon any dispute arises, by sending representative officers to
coordinate and work on the dispute with partners and employers, the Board of
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 up with
appropriate solutions to promote these activities in the post-crisis period.
The most obvious shortcoming is the failure of labor providers to meet the
requirements of employers despite annual increases in the number of supplied labor.
The number of laborers who work overseas on the basis of a contract, bid award or
the number of high-skilled workers remain low and the sense of compliance with the
law and the rules among these laborers remains limited.
Many labor exporting enterprises are not strong. Some do not pay adequate
attention to the management of foreign labor, delay in detection and handling of
problems incurred by the employees. The operations of local steering committees for
labor export remain ineffective.
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CHAPTER 3.
STANDPOINTS, DIRECTIONS AND SOLUTIONS TO ENHANCING
VIETNAM’S LABOUR EXPORT AFTER THE 2008 ECONOMIC CRISIS
3.1. FORECAST OF INFLUENCING FACTORS ON VIETNAM’S LABOUR
EXPORT ACTIVITIES IN THE COMING TIME
3.1.1. With regard to the demand in labor export for the coming time
3.1.1.1. With regard to the working age, in Asia the population at working age
increases at an average of 0.87% per year from 1.89 billion in 2010 to 1.99 billion in
2015 and 2.06 billion in 2020 and is distributed unevenly across countries. From

positive perspective, the global scale unemployment will create strong pressure on
labor and employment
3.1.1.2. With regard to the labor export market
First: the labor export market shall undergo a tough competition. That is the competition
between labor exporting countries for market share.
Secondly: The labor supply and demand relationship in the world and regional markets.
Due to the difficulties in terms of labors and employment market caused by the increased
unemployment rates after the crisis, many countries have moved to make capital
investments in less developed countries to use cheap labor.
Thirdly: The reception of unskilled labor tends to decrease, hence the competition in the
labor market for unskilled imported labor will become more intense.
Fourthly: The advancement of information technology makes it easier for the countries
that are in need of import labor and labor exporting countries to select their partners,
however this should focus on the improvement of the quality of labor source.
3.1.2. Supply of Vietnam’s labor market for labor export in the coming time
3.1.2.1. About working age and labor force
The advantage of human resources in the national socio-economic growth shows the
labor supply capacity to Vietnam’s labor export activities in the coming time.
Vietnam's current population is 89 million, which will reach 91.64 million by 2015,
96.12 million by 2020 and 111.7 million by 2050. The average rate of redundant
workers for the 2011-2020 period is 4.10%
3.1.2.2. With regard to the number of employees and the allocation of the labor
export market. At the moment and in the 10 years’ time, Vietnam’s labor market
shall remain at a higher supply than demand for labor. The development of the
domestic labor market in the country will have a positive impact on the selection of
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labor sources for export. In addition, unbalanced development of the domestic labor
market with diversity, complexity and the stronger impact of the world market on
Vietnam’s labor market will make the competition among labor export supplies to
become increasingly fierce. As it is forecasted, 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
time.
3.2.2.1. The development of Vietnam's labor export in the future should be
considered as a long term and important strategy of the country’s modernization
and industrialization goal. The State should not only enhance labor export but also
develop sustainable strategies for labor export, with strategic vision of the labor
supply in sufficient quantity and good quality for labor export. This is to ensure that
Vietnam’s workforce in the near future, especially when the economic downturn
passes, can compete with its peers in the international labor market by a well selected
and screened workforce for labor export.
3.2.2.2. The goal and target of development of Vietnam’s labor export in the future
should be promptly fine-tuned with the actual volatility of the labor export market
The target set by MOLISA is by the 2012-2015 period an average of 100,000
Vietnamese laborers shall be sent to work overseas, that means every year between
140,000 and 160,000 people will be sent abroad so that by 2015 there will be 1
million overseas worker on a permanent basis (MOLISA, 2012). The search for new
labor export markets should also be taken into special account in order to increase
that number of exported labor as set target.
3.2.2.3. The development of Vietnam's labor export in the near future needs to ensure
that the traditional and key export markets are maintained in addition to expansion to
other potential export markets. Vietnam needs to take a breakthrough to maintain the 4
key markets (i.e. Taiwan, Malaysia, Korea and Japan). It is not allowed to lose the market
share but, on the contrary, Vietnam needs to hold on tight to those 4 traditional markets
and also promote expansion to other new and potential markets.

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3.3. SOLUTIONS AND PROPOSALS ON ENHANCING VIETNAM’S
LABOUR EXPORT AFTER THE 2008 GLOBAL ECONOMIC CRISIS
3.3.1. Solutions to minimizing negative impacts and developing the positive
impacts of the world economic crisis in 2008
For the State
First, to promptly have in place a police to facilitate the integration of the employees
who have to repatriate early.
Secondly, the State should make specific provisions for occupational training and
further training for the employees who have to repatriate early.
Thirdly, to build medical clinics for the export employees after their repatriation.
For labor exporting enterprises
To make a reserve fund against the risks for the employees; to arrange temporary jobs
for employees; to work with local authorities to introduce jobs to employees.
3.3.2. Introduction of a group of solutions to enhancing Vietnam’s labor export
in the coming time
To sustain traditional labor market and at the same time to explore new markets
with potentially better working conditions and incomes for employees.
3.3.3. Several specific recommendations on how to implement solutions to
enhance Vietnam’s labor export in the coming time.
3.3.3.1. Recommendations to the State management agencies
To the National Assembly
To the Government
To the Ministry of Labor, War Invalids and Social Affairs
To relevant ministries, sectors and people’s commitees of various levels
3.3.3.2.Recommendations to labor exporting enterprises
3.3.3.3. Recommendations to employees
Chapter 3 has projected potential fluctuations in te relevant parameters of
Vietnam’s labor export in the coming years. Chapter 3 has, again, confirms the
objective need of further enhancement of Vietnam’s labor export which is totally in

line with the current directions of the country’s socio-economic development.
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CONCLUSIONS
Labor export, as part of the international labor migration, is becoming a kind
of external economic activities which are essential and critical to many countries in
the world. Within the context of the strongly and vibrantly on-going globalization
process, the economy has developed and people's lives have been improved
significantly. The process of international economic integration has imposed a
necessity to develop labor export and promote the benefits of international exchanges
of "labor power" for both labor exporting and labor importing countries. This is seen
as a measure to address the issue of poverty reduction Currently, many countries
around the world have treated labor export as a key economic area. Therefore, labor
export activities are unstoppable and must be further developed on a larger scale in
line with the socio-economic development of the world. In addition, labor export also
helps to effectively implement the government policy for employment for the 2011-
2021 period. It is, therefore, essential for labor export activities to be organized in a
formal and professional manner under the State administration and with its maximum
support, and to have a labor export development strategy associated with the socio-
economic growth for the medium and long term.
In 2008-2009, the world fell into a global economic crisis which caused the
whole labor picture gloomy with jobs being cut, early repatriation of workers, non-
acceptance of new labors, labor orders being cancelled etc. Vietnam does not = fall
beyond this picture. However, there are signs of the world economy gradually
recovering, many markets being recovered by reinstating receipt of foreign workers.
That poses a problem of how Vietnam should promote its national labor export
activities after the "the storm of crisis”.
After 33 years of sending laborers to work overseas, Vietnam’s labor export has
made significant developments, the number of workers sent overseas is getting better
screened over the years. However, Vietnam’s labor export is also influenced by the
global financial and economic crisis. It is hoped that the research outcome of this

Thesis and the practical experiences provided in here would help Vietnam and its
labor exporting enterprises to take advantage of the lessons learned, avoid negative
actions and maximize the positive impacts of the 2008 economic crisis in 2008 in
response to the increasingly fierce international competition.
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