Intervention at USAID Consultation on the Role of Private Sector and Civil Society in Inclusive Growth

On September 10, 2014


Ladies and Gentlemen,

  1. First of all, I’d like to thank the USAID for this enormous opportunity to participate in this Consultation Conference with such honorable panel and share with you the views of social research organisations and civil society about inclusive growth in Vietnam.
  2. I have been doing research on labour rights in export-oriented manufacturing industries for 15 years. I am very lucky because most of the time I was able to maintain the independence in my research even though most of my published work have been in English and despite my repeated attempts, none was ever accepted for publication in Vietnamese.
  3. I wish to share with you one real example of what I see as ‘inclusive growth’. 4 years ago, I did a research at a Taiwanese footwear factory in the South of Vietnam. Then, the factory had been in operation for almost 2 years and they faced with a lot of serious labour problems: labour turnover was 15%/month, workers went on wildcat strikes twice a year mostly to demand for higher wages. The Taiwanese management was authoritarian: they allowed for an enterprise union but the union was headed by the HR Manager herself; communication was one-way and the workers had no ‘safe’ and effective way to voice their grievances, not to say demand for better working conditions. Mass exits and wildcat strikes were the only ways to  express their opinions to the management.
    The management complied with the minimum wage and working hours limit but that was not enough. Because of their labour problems, their productivity was low and their relationship with their major clients seriously endangered. The management was pushed to having to choose between CHANGE or CLOSE DOWN the factory and return to Taiwan.
    Then, the biggest strike happened with 24 thousand workers, all of the company labour force, walking out. And this time, one of their demands was to have their own union. The management agreed and allowed for a free election, first time ever in the factory. And out of their surprise, a male worker in the cutting section was elected the union chairman. He finally turned out to be one of the strike leaders. The management, and quite a few workers, believed, then, that this untrained, lowly educated worker would not be able to run a union of over 20 thousand members. The management also feared that under this worker’s leadership, more strikes would happen and their labour relations would be even more chaotic.

In the contrary to their expectations and fears, the new union chairman did not mean to organise strikes. Instead, he managed to create as many as possible channels for labour-management dialogue, consultation and negotiation. With his firm leadership and facilitation, workers now not only could raise their grievances and have them properly handled but also be able to elect their team representatives who sit down with management for negotiation on wages and working conditions. Wages have been increased steadily and a lot of new welfare benefits were provided to workers and their families.

There was only one strike since then. The labour turnover is now 12%/year. Labour productivity was one of the highest among local footwear companies. The company became a flagship supplier of major footwear MNCs.

I think the example can tell us a lot: Growth that is based on suppression of basic rights, including labour rights, cheap labour costs and sweatshop working conditions will quickly reach its limit. If a country wishes to grow further, inclusive growth in which basic rights of citizens are respected and growth benefits shared is the only way. In that process of change, against the fears and concerns of the leadership, the civil society such as the trade unions, social organisations, community organisations, if given the freedom to grow, a foreseeable legal framework to function, and clear commitment to protection of their rights, will become the most effective force to create the favourable environment, support and facilitation for inclusive growth, just like the enterprise union at the Taiwanese footwear company which was freely elected and headed by the footwear worker have been able to achieve in the example above.

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