Download education and training for social demands as a solution to growth

STRATEGIC CHOICES FOR VIETNAM’S
HIGHER EDUCATION
Dr. Nguyen Thien Nhan
Deputy Prime Minister, Minister of Education and Training
Socialist Republic of Vietnam
Kuala Lumpur, Malaysia
Dec. 3, 2007
VIET NAM OVERVIEW
Land 330.900 km2
Population 84 mil.,1.2% growth rate
GDP 2006
GDP per capita
HDI
Economic Growth 2006
USD 60 billion.
729 USD
0.709 (109 of 177)
8.17%
WTO Member Since November, 2006
2
ECONOMIC GROWTH 1996-2006
Trends of GDP since 1986 up to 2006
10.00
9.00
Rtae of growth(%)
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
0.00
Years
- High and stable growth with an annual average of 7,33%
- GDP in year 2006 doubled as compared to that in 1996
- Impact of economic crisis of South East Asia region, 1998-2000
- From 2000 up to now, a continuous increase in GDP
- In the year 2006, GDP increased by 8,17% and income per capita was 729
USD
3
RATE OF GROWTH IN SECTORS
 Industry and service
sectors require a large
amount of skilled workforce
and high demand for
appropriate training
200000
180000
160000
140000
120000
Agr.m Forest, Fishery
100000
80000
Industry
Service
60000
40000
20000
0
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
P.
20
06
 Agriculture, forest and
fishery: 3.9%
Added value
 Service sector: 7.3%
GROWTH IN AGRICULTURE, INDUSTRY&CONSTRUCTION,
SERVICE SECTORS
x billion. VND
 1996 -2006, the average
rate of growth in the
industry & construction
sector: 10.3% annually
YEARS
4
CHANGES IN EMPLOYED POPULATION BY ECONOMIC SECTOR
Labor (x1000)
50000.0
45000.0
40000.0
Total labor
35000.0
30000.0
Agricultural labor
25000.0
20000.0
Industrial&construction
labor
15000.0
10000.0
Service labor
5000.0
0.0
2000 2001 2002 2003 2004 2005 2006
Years
2000
2001
2002
2003
2004
2005
2006
Total employed population
in three sector (x1,000)
37,610
38,563
39,508
40,574
41,586
42,527
43,347
Agr., Forest, Fishery
24,481
24,468
24,456
24,443
24,431
24,343
24,123
Industry and construction
4,930
5,552
6,085
6,671
7,217
7,740
8,193
Service
8,199
8,542
8,967
9,459
9,939
10,445
5
11,032
TREND OF EXPORTATION 2000-2006
35000.0
Trend :2001-2006
Value (x1000 USD)
30000.0
25000.0
Trend :1996-2000
Total
20000.0
Primary Products
15000.0
Manuf actured Products
10000.0
5000.0
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
0.0
Years
1. Since 2000 up to 2006 the average growth of exportation has
been 19.3%
2. In 2006, exportation made up 65 % of GDP (in 1991, it was 24 %
of GDP)
6
STRUCTURE OF EXPORTATION
1.
Agriculture-forest- fishery goods decreased from 52%in 1990 to 24.3%
in 2001 and remained 20.5 % in 2006
2.
Industrial and handicraft goods increased rather fast: 33.9% in 2001,
39.0% in 2006
3.
Fuel and mineral products changed from 21.6 % in 2001 to 23.4% in
2006
4.
Vietnam belongs to the leading group of exporting some products:
- 4.6 mil. tones of rice: Number 2 worldwide
- The world's largest robusta coffee, cashew nuts and pepper exporter.
- Garment and textile: Number 10 worldwide
- Civil ship export: Number 7 worldwide
7
EXPORTATION
WHAT SHOULD BE EXPORTED?
• Exporting primary (raw) materials
• Assembly-based, manufacturing industry  labor
intensive, low value-added, low effectiveness
• Why?
 No master of design, distribution and trading
 Labor cost of making a shirt = 1USD, but sold for 30 50 USD (labor cost equals to 2-3% of price); the labor
cost of making a suite = 6 USD, but sold for 300 - 600
USD (labor cost equals to 1-2% of price)
 Most profits remain with design and trading
8
NEW WAVE OF INVESTMENT IN HIGH TECH
Foreign companies invest in big projects of hightech industry with capital size from hundreds
million USD to billions USD.
ON DEMAND SIDE
New
opportunities
ON SUPPLY SIDE
New
challenges
9
NEW WAVE OF INVESTMENT IN HIGH TECH
1.
Intel Product Company
- Invested in a project of USD 1 billion =>requires 1000
engineers specialized in electrical engineering, electronics,
information technology, automation
2.
Renesas company of Japan
- To build a design center in Vietnam =>needs 1.000 engineers.
- All of functions of design centers in Japan and the United
States will be transferred to the Vietnam Renesas Center
3.
Hon Hai corporation – Taiwan (China), investing in Vietnam.
- Global turnover => 60 bil. USD /year
- Products: electronic products used in mobile, computer part,
telecommunication, and home electronics
- Next five years, to invest USD 5 bill.=> needs over 50.000
workers
10
NEW WAVE OF INVESTMENT IN HIGH TECH
4. Campal company – Taiwan (China) investing in Vietnam




Production of laptops and electronic products
First phase of the project USD 500 mil. in Vinh Phuc
Recruiting 1200 engineers to train them oversea
Huge demand of skilled workers
5. Quang Trung Software Park in Ho Chi Minh City




78 enterprises and 32 investment projects; 46 foreign enterprises
from 14 countries (United States, Japan, France, Swiss, Korea,
Thailand...)
Total capital of 150 mil. USD
Employees: 3,100 engineers and IT experts
4.500 IT undergraduate students are trained in international and
domestic university programs
11
Trend 1: investment for manufacturing and exportation of hightech products in next 10-20 years (demand-side)
Biggest challenges

For investors:
Difficulties in finding professionals and highly skilled
workers while paying low labor costs (300-500
USD/month) compared to other countries.

For Vietnam:
- Risk of missing opportunities to attract foreign
investors to manufacture and export high-tech
products.
- inappropriate skills and knowledge lead to miss
opportunity for development.
12
Trend 2: Outsourced research services for foreign companies
(demand-side)
Example of India: Outsourced research services for US companies (IBM, GM,
Microsoft,…)
Competitive advantages of India:
- A number of good research universities (high quality of engineers, masters,
PhD.); English as second language
- Low labor cost compared to USA
(Expectation: by 2015, 800,000 workers for outsourced research with 30
billion USD income)
Supply-side
Opportunities for Vietnam: Increasing need of outsourced research from
companies in the developed countries (demand-side)
- Labor: low cost, hardworking, good basic education, learn willingness,
innovative, adaptive to changes
- 300,000 oversea Vietnamese engineers, scientists in the developed
countries
- Improved quality of the best universities in Vietnam (National University in
Hanoi, and in HoChiMinh City, German-Vietnamese Uni.)
13
HIGHER EDUCATION 2007
-
322 universities and colleges (47 private HEIs, account for 15%)
1.5 million students (4 year bachelor degree)
170 students /10,000 citizens
52,000 faculties (teaching staff), ratio of students to faculty (29 student/faculty)
 7,000 PhD. Holders as faculties (about 13.5% total teaching staff)
 463 professors, 2,467 associate professors
- Few research at universities (3% of universities revenues)
- Weak linkage with the industry
- Obsolete equipment for teaching and research, outdated curriculum and
teaching method
- Low funding  low spending on teaching and research
LOW QUALITY OF GRADUATES
(DO NOT MEET THE INDUSTRY’S SKILL REQUIREMENTS )
14
FUNDING FOR EDUCATION
Expenditure on education (bil. VND)
Total expenditure …............................
In which: - budget expenditure ……….
- private’s expenditure …….
Ratio of private/total expenditure (%)
2000
2002
2004
2006
25,701
33,143
49,427
73,186
18,386
22,541
34,872
54,798
7,315
10,602
14,555
18,388
28.46
31.99
29.4
25.1
- State budget for education increased from 4.2% of GDP in 2000 to 5.6% in 2006;
- Private contribution fluctuated between 1.7%
- Total funding from public and private sectors increased from 5.8% of GDP in
2000 to 7.5 % of GDP in 2006, mainly from the increase of public budget
- The ratio of private sector expenditure to total expenditure on education: 25.1%
in 2006
15
ISSUES ON FUNDING FOR EDUCATION
1. Expenditure on education per capita is still low; For example: In
2006 the expenditure for a person: ≈ 54 USD (over 1 USD per
week) and about 203 USD per student (0.56 USD/student/day)
2. Expenditure for universalization at primary and lower secondary
education accounts for 52% of the total budget for education
3. Expenditure for kindergarten and general education accounts for
71% of the total education budget
4. The remaining share of budget for workforce training from semiskilled workers to higher education was only about 15%
5. Average expenditure on higher education is just about 400
USD/student/year
=> quality of education and training is an issue
16
PUBLIC/PRIVATE EXPENDITURE ON EDUCATION
Public/private expenditure on education
60,000.00
54,798.00
Billion (x1000) VND
50,000.00
40,000.00
34,872.00
30,000.00
22,541.00
20,000.00
18,386.00
18,388.00
14,555.00
10,602.00
10,000.00
7,315.00
Public Expenditure on
Education
0.00
2000
2002
2004
Years
2006
Private Expenditure
on education
17
Small scale of
HE
Limited quality of
faculties
Low salary
of faculties
Limited ICT
application
Limited
private
contribution
Low quality of
graduates
Neglecting of
training quality
Low
income of
household
Education
management quality
limited
Vietnam as
a poor
country
Low
spending
on
education
Low quality
of facilities
Weak linkage with
industry
Low
budget for
education
Low efficiency of
production & service
Vicious Circle of Higher Education Development in Vietnam (1986-2007)
Government Policy and Administration
18
FIVE SOLUTION DIRECTIONS
1. Introducing performance – based system in education
management
1.1. Performance standards for teachers and instructors
1.2. Contract-based employment for all teachers and faculties
1.3. Faculty evaluation by students
1.4. Introduction of credit system at universities
1.5. Promoting ICT application for institutions (next year is the ICT’s
year in education)
19
…to be continued
FIVE SOLUTION DIRECTIONS
2. Improving autonomy, efficiency and accountability of HE institutions

Benchmark-based regulation of student size of universities

Quality assessment and ranking of universities (Hanoi Declaration of
ASEAN Ministers of Education, Nov. 23, 2007)

Allow HEIs to collect higher tuition (recently 150 USD/student/year)

Student size-based (instead of institution based) support from
Government

Performance and demand-based competition for research fund from the
Government

Introduction of financial audit of universities and publication

Encouraging industry’s participation in training programs of universities

Training courses on professional development of universities’ presidents

ICT application for management at university and the Ministry
20
…to be continued
SOLUTION DIRECTIONS
3. Improving the efficiency of financial management of HE
 Introduction of student loan scheme to support poor students
 Student related financial support from Government (instead of
institution related)
 Funding for national target programs: high standard universities
(advanced foreign training programs at 9 universities, GermanVietnamese Uni., National Uni.; program of training 20,000 PhD.
from 2008-2020; 13 years English teaching program)
 Improving financial management information system
 International donors support education
21
…to be continued
FIVE SOLUTION DIRECTIONS
4. Further decentralization
 Delegation of decision making autonomy to local government and HE
institutions
 Enhancing the responsibilities of the ministry in policy design, longterm strategic planning in cooperation with other ministries;
 Improving quality assurance and effective monitoring and evaluation
 Improving professional collaboration of HE by establishment of the
national councils of university presidents and faculty directors in order
to improve quality education and training
22
…to be continued
FIVE SOLUTION DIRECTIONS
5. Developing 2-tier higher education system

Research universities including high standard research universities
o
Hanoi University of Science and Technology
o
German-Vietnamese University
o
Hanoi, and HoChiMinh City national University
o 14 recognized research-oriented universities
o
In future: 25-30 research universities.
 Universities of applied science and colleges (approximately. 300 Uni. and
colleges)
23
THE PHILOSOPHY OF THE SOLUTION
Demand-led
World market
Vietnam Higher education
World education
Local market
2008
Local education
Research
capacity building
2012
Demand-driven
World market
Vietnam Higher education
World education
Local market
2020
Local education
Supply-pushed
?
2040
24
THE END
THANK YOU
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