The TPP’s Impact On Vietnam: A Preliminary Assessment
Dien Nguyen nguyendien519 at gmail.com
Mon Nov 9 03:22:20 PST 2015
FYI,
Nguyễn Điền
Independent Researcher
Canberra
The TPP’s Impact On Vietnam: A Preliminary Assessment
By Le Hong Hiep
The conclusion of the Trans-Pacific Strategic Economic Partnership (TPP)
Agreement negotiations on 5 October 2015 has been hailed by the twelve
participating countries as a landmark for regional economic integration.
The agreement is also seen by many experts as having far-reaching regional
and global strategic implications. As a member of the TPP, Vietnam will
stand to benefit from the agreement both economically and strategically,
but the country will also be faced with considerable challenges. How
Vietnam will capitalize upon the opportunities and handle the challenges
may shape the country’s economic, political and strategic trajectory for
years to come.
This essay provides a preliminary assessment of the potential economic,
political and strategic impact of the TPP on Vietnam. It argues that
Vietnam may gain significantly in terms of GDP growth, export performance
and FDI inflow. In the long term, the economy will also benefit if further
legal, institutional and administrative reforms are undertaken along with
improvements in the state-owned and private sectors. Politically, immediate
impacts will be limited, but the country may become more open and conducive
to further liberalization in the long run. In strategic terms, the
agreement will help the country improve its strategic position, especially
vis-à-vis China in the South China Sea, although such an impact is not
imminent and should not be exaggerated.
Shawn McHale mchale at gwu.edu
Mon Nov 9 06:12:11 PST 2015
Thanks for forwarding this.
Some of us are intrigued by the labor provisions of the TPP -- in
particular, the promise to allow "independent' unions At first glance, it
seems completely puzzling that Vietnam would agree to such provisions, as
the idea of Vietnam going down the path of Poland and Solidarity seems
highly dubious.
Le Hong Hiep writes the Party will probably try to make sure that labor
unions focus on economic issues, not political ones, and writes that "In
this connection, the Party and its security apparatus will probably
construct certain tactics to “legally” constrain independent unions within
certain boundaries, and to prevent them from being exploited politically."
This seems like a very plausible reading. The Party may also try to set up
new unions that are only independent in appearance, as it historically did
with the Democratic Party in the political realm. Nonetheless, it will
be interesting to see how this provision plays out. It does put some
pressure on Vietnam to allow some semblance of independent unions.
Shawn McHale
Tom Miller milltom at gmail.com
Mon Nov 9 08:16:39 PST 2015
It would appear the labor provisions are toothless, as, unlike corporate
complaints, there is no independent enforcement mechanism.
Tom Miller
Thomas Jandl thjandl at yahoo.com
Mon Nov 9 10:41:02 PST 2015
I would agree that the Party didn't "want" to set up independent unions, but felt, given US pressure and legislation (which allowed the negotiators to play a two-level game), that they had no alternative.
I further guess the Party thinks it can manage the challenge. As we have discussed here on this list over the years, Viet Nam has had thousands of wild-cat strikes, most of which ended in the government's pushing companies for concessions, NOT the arrest of the "illegal" strikers. In Chan's edited volume "Labor in Vietnam" (2011), I believe it is Ben Kerkvliet who concludes that strikes in Vietnam normally end in concessions, not repression. And, the labor code was amended a few years back to allow the government to become an intermediary in employer/employee disputes.
It is quite conceivable that the GoV -- as it's done before -- takes a challenge and turns it into an opportunity. Allowing these unions, in the strictest of limits still acceptable to the US government (which after all will only incrementally provide certain TPP benefits in phases as ILO regs are implemented) may actually allow the government to get a better handle on strikes while at the same time being able to say to workers, "see, we are working with you to get decent working conditions" while also appeasing investors, who want the government to get involved in strikes.
A few years ago, for my book (Vietnam in the Global Economy -- now fresh out in paperback!) is surveyed firms, and the top two problems they all talked about was illegal strikes and high turnover. Surprisingly, most respondents also said that they are willing to pay more to address these problems, as long as the government makes sure that everybody pays more -- not just some voluntarily. If the government can get these unions to address the major grievances of workers and work with the government to address them, the Party may actually turn a TPP imposition into a domestic opportunity.
____________________________Thomas Jandl, Ph.D. Non-Resident Scholar Viet Nam National University -- Ha Noi Partner, TJMR Asia Consultants Washington: 443-901-2612 Viet Nam mobile: 0126 558 2026 thjandl at yahoo.com
Joe Buckley joejbbuckley at gmail.com
Sun Dec 6 06:22:36 PST 2015
Dear list,
Here is my take on labour provision of the TPP, in a recent blog for SOAS,
University of London -
https://blogs.soas.ac.uk/lsmd/2015/11/30/will-the-tpp-be-good-for-workers-in-vietnam/
Best,
Joe Buckley
PhD candidate in International Development,
Departments of Development Studies and Economics,
SOAS, University of London
B F Dwyer anthrobfd at hotmail.com
Sun Dec 6 06:43:09 PST 2015
Thanks for that - very interesting interpretation. I agree with you on the whole but I wonder how much the downward pressure on wages would actually encourage the informal sector thus providing work to many more than otherwise would get it? I am no fan of TPP for a number of reasons but in this context could it be beneficial given direct foreign investment is healthy, working population is high, and its markets are growing. thanksBrett
Date: Sun, 6 Dec 2015 14:22:36 +0000
Thomas Jandl thjandl at yahoo.com
Tue Dec 8 17:27:12 PST 2015
I read Joe Buckley's blog with great interest and I have a number of comments on it.
As Joe points out, TPP is opposed by most unions, who are allied with the Democratic Party. Union opposition has little to do with the question whether TPP will be good for Vietnamese workers, however. Unions represent American workers, and their interests can be diametrically opposed to those of Vietnamese ones. In tis context, I doubt that the unions have as good a case as they claim -- it's politics after all. It is worth pointing out that Republic Party members also oppose TPP -- remember Donald Trump's well-argued position :). And Hillary Clinton called it the gold standard a little while ago; now she is opposed. Well, it's politics.
So let me forget about American politics here and look at TPP in Vietnam. I don't agree that all Vietnam has done is to accept ILO standards that they already have on the books. The United States has made it clear that it will grant a number of benefits only over time in return for measurable implementation of these benefits. Now, one can reasonably argue that in the end nobody wants to scuttle the deal a few years in only over a labor provision. But the fact that Vietnamese labor groups or activists can appeal to American unions and the Labor Department is certainly new and has more teeth than anything so far. Dispute settlement mechanisms can lead to trade sanctions, a result that grants enforceability not just until signature, but going forward. Dismissing all that out of hand as "nothing new" seems rather unfair to me.
The argument of "flexibilization" doesn't strike me as particular poignant in the Vietnamese context. The Vietnamese labor force is extremely flexible as it is. Some companies experience (and suffer from) turnover rates of 25%, even 30% annually. In my research I have found that this short-termism (or flexibility) of workers is a real problem for many companies -- especially those that want to compete on quality, not just low price.
I also found that many companies do not just look for cheap labor. In my book "Vietnam in the Global Economy," I survey a number of companies and one of the recurring themes in their responses is that turnover is too high, that they would like to incentivize workers to stay on, but that they are afraid of losing out to the competition if they raise wages while the competition competes on price. A quite surprising result of my survey was that a number of companies volunteered as a solution a higher minimum wage. I do understand that there are many companies that want to compete on cost and would not like to see labor rates increase, but given that Vietnam has to restructure its economy with higher productivity and less rock-bottom-price low-quality stuff, I would argue these companies are on to something. And TPP pushes in that direction, by giving Vietnam a serious advantage over China in attracting upstream factories that make the inputs into the export-industry assembly factories. Productivity, and with it salary levels, are bound to go up, not down.
The blog also points out that street vendors are not considered. True, and childhood obesity isn't either. Any agreement covers certain ground, and street vendors are not part of TPP. I don't think any proponent of TPP would argue much with that.
I will argue a bit with it, though. Ultimately, street vendors (and the other category of truly poor, those in the underground economy) benefit when the economy does better, both through alternative employment opportunities and increased business opportunities. They also benefit when inflation declines. Today, the main contributor to inflation in Vietnam is the inefficient capital use in the state-owned enterprises, which absorb significantly more of the new capital formation than they contribute to GDP or employment. The ICOR for SOEs is at approximately 17, for foreign-invested companies about 10, for small and medium domestic companies around 6. (ICOR, or incremental capital output ratio measures how much investment it takes for one unit of increased return -- the lower the more efficient.) As SOEs must reform themselves, economic efficiency is bound to increase, and all those who suffer from inflation will see benefits.
Maybe none of this will work out as expected. But looking at the data and past evidence suggests that Vietnam will indeed be the main beneficiary of TPP, and Vietnamese workers will get a share of the benefits. _________________________________ Thomas Jandl, Ph.D. Non-Resident Scholar Viet Nam National University -- Ha Noi Partner, TJMR Asia Consultants Washington: 443-901-2612 Viet Nam mobile: 0126 558 2026 thjandl at yahoo.com
Joe Buckley joejbbuckley at gmail.com
Fri Dec 11 06:32:54 PST 2015
I thank Thomas Jandl for reading my blog, and for taking the time to write
a response. I would like to reply to a few points.
Jandl says that he doesn’t agree that all Vietnam has done is to accept ILO
standards that they already have on the books. I wish this were true.
Comparing the text of the TPP’s labour chapter, though, and that of the
ILO’s 1998 declaration, I cannot see any meaningful difference. This is not
just my point – it has been noted by a number of commentators and policy
makers both inside and outside Vietnam. Admittedly, people within the
Vietnamese government, MOLISA, and the VGCL have said that they will do
more to satisfy the contents of the 1998 ILO declaration, but looking at
the details, this does not amount to any major changes. They seem to focus
most on increasing programmes to combat forced and child labour –
important, of course, but separate to independent unions or improving
working conditions.
Jandl says that it is reasonable to argue that ‘in the end nobody wants to
scuttle the deal a few years in only over a labor provision,’ so I will. He
also points out that Vietnamese labour groups or activists will be able to
appeal to American unions and the Labor Department. This mechanism seems to
have rather colonial undertones, which strikes me as uncomfortable and
troubling. I would want mechanisms to strengthen the rights and abilities
of Vietnamese labour groups and activists to organise themselves, instead
of having to appeal to foreign, Western labour groups, in a mechanism that
would also surely take a long time to resolve anything.
It seems that that ‘flexibilisation’ is confused with ‘labour turnover’,
which is just one small part of processes of flexibilisation. Furthermore,
informalisation is not mentioned at all, and street vendors are seen as
something as separate to workers as childhood obesity. In fact, street
vendors often blur the line between self-employment and wage labour,
engaged in, to use Breman’s famous phrase, ‘sundry forms of wage labour.’
This is why I find treating street vendors as separate to workers to be
incredibly problematic. Jandl points out that street vendors benefit when
the economy does better. I see this as necessary, but not sufficient – a
growing economy does not guarantee sufficient creation of employment, never
mind decent work. In Vietnam, the so-called ‘formal economy’ (I reject the
binary separation between formal and informal) has been informalising, and
looks set to continue to do so. There is nothing in the TPP to try and
protect wage labourers against this process.
Finally, it is good that some employers and investors want to pay higher
wages. As Jandl points out, however, they are often scared to because of
the fear of losing out to lower priced competitors. The framework for
annual minimum wage negotiations is weak, with the VCCI – heavily leaned on
by groups such as AmCham and EuroCham – pushing hard to keep the wage rises
as low as possible. Against this structure, the few business which do want
to pay higher wages will of course lose out. But, again, there is nothing
in the TPP labour chapter which mentions setting up a fairer system for
minimum wage negotiations and rises.
Joe Buckley
PhD student in International Development
Departments of Development Studies and Economics
SOAS, University of London
Ben Quick bnquick74 at gmail.com
Fri Dec 11 07:57:48 PST 2015
Two pointd on this fascinating study:
1. I can't help thinking that any reviving of colonial style relations is
the least of the concerns for Vietnamese labour with regards to reliance on
American unions to apply pressure on wage issues from abroad. Labour in the
US has failed miserably to remain strong enough to push for much of
anything these days, despite one or two very public victories. The Supreme
Court is very likely to make a decision in an upcoming case that will
essentially establish a right-to-work nation. SEIU is laying people off en
mass. Etc.
2. As for this: "This is why I find treating street vendors as separate to
workers to be incredibly problematic. Jandl points out that street vendors
benefit when the economy does better. I see this as necessary, but not
sufficient – a growing economy does not guarantee sufficient creation of
employment, never mind decent work."
As anyone who has lived in Vietnam knows, street vendors benefit when the
local police allow them to operate, and this is emblematic of what is hard
not to believe will be the biggest problem with the TPP in Vietnam--if we
will indeed someday see a TPP, for I have my doubts. Corruption is still so
rampant that it must be factored into any projected future economic
progress in Vietnam with or without the TPP. We cannot assume any group of
people will benefit from a strong economy until we see how the skimming and
bribery and dealmaking play out. The Vietnamese economy can't--at least in
my eyes--be assessed or projected with any accuracy because the corruption
really is that bad. It just is, unfortunately. From the top of the supply
chain to the bottom where we buy our banh mi op la. Anyway, my cynical
thoughts.
Ben Quick
Fri Dec 11 11:31:32 PST 2015
I agree about the bane of corruption to any sort of econ. development. One only needs to compare such in China, India, or even Bangladesh, to see the effects of it, as it isolates the poor in city ghettos or in drought-stricken villages, minus jobs or food………….while the rich get richer.
Joanna K.
Thomas Jandl thjandl at yahoo.com
Fri Dec 11 11:43:29 PST 2015
Joe, not to do a long back and forth over each point, but just to say that I didn't make myself clear with respect to the point of Vietnam just adopting ILO standards. My point was not that they went much further than that, but that TPP will provide an incentive to implement. The right to organize outside the state system will be broadening under the TPP, and it will be enforceable, lest Vietnam wants to lose a chunk of the trade and investment benefits that come with the TPP. Insofar, Vietnam's worker are better off under TPP than without. How much better we will have to see.
And I agree with Ben that street workers' worst enemy is corruption. And with Joe that TPP simply won't address that issue, because it's a trade and investment agreement, not a Vietnamese domestic social agreement. No agreement can address it all. But vendors won't be worse off under TPP, and they may end up better off.
Absolutely, Vietnam has to address corruption. TPP does address that issue on the margins, by requiring transparency for the SOEs and by giving groups aggrieved by state arbitrariness some redress. (Of course, not street vendors, I am aware of that.) Corruption, in the end, is a cultural problem as well, and if TPP manages to address it on some higher-up level, at some point opprobrium against it may trickle down. Maybe I am a bit utopian here. Reality is, however, that the leadership that has pushed for TPP (and which is set to sweep the 12th Party Congress), has done so because it wants to reform the country. Reducing the power of the SOEs via TPP was a big one; so who knows, maybe corruption down the line is next.
Murray Hiebert called TPP an "action-forcing event." I agree with that, and the leadership knew it (in other words, these things are not unintended consequences). Hence it is not entirely unreasonable to expect some action. _________________________________ Thomas Jandl, Ph.D. Non-Resident Scholar Viet Nam National University -- Ha Noi Partner, TJMR Asia Consultants Washington: 443-901-2612 Viet Nam mobile: 0126 558 2026 thjandl at yahoo.com
Ben Quick bnquick74 at gmail.com
Fri Dec 11 12:33:27 PST 2015
I'm interested in opinions as to whether the TPP is going to survive the
political process outside of Vietnam, specifically in the states and
especially now that both viable Democratic presidential candidates have
come out against it. My impression is that there may not be a TPP anytime
soon. Am I offbase in thinking this? I know there is at least the
appearance of strong support in Vietnam but there is certainly not enough
power in Hanoi to sway American politics.
Shawn McHale mchale at gwu.edu
Fri Dec 11 12:50:37 PST 2015
Re: TPP outside of Vietnam -- US Senate Majority Leader Mitch McConnell has said that he is opposed to debate over the deal, supposedly over some
provisions related to tobacco, and therefore wants to put off Senate debate
over the TPP till after the elections in November 2016. This may at first
glance seem strange: doesn't the Republican Party love trade deals?
McConnell's stated reason (in a Washington Post story) appears to be an
excuse. I'm surmising that with the Republican Party in an uproar,
McConnell wants to table the discussion of the TPP so as to avoid
alienating those Americans who see Trump as their newfound savior.
If McConnell does indeed hold to this position, Vietnam won't be seeing the
results of the TPP for at least a year, if at all.
Shawn McHale
George Washington University
David Brown nworbd at gmail.com
Fri Dec 11 14:05:38 PST 2015
Shawn et al.: By the terms of the fast-track law, the Congress must vote
TPP up or down within 90 days after the President submits it for approval.
Therefore, Senate Majority leader McConnell can't unilaterally delay
consideration indefinitely -- he'll need Obama's [at least tacit] agreement.
On wages -- what's holding them down isn't government action/inaction but
rather the fact that there is still much underemployment in rural areas,
methinks. This will persist until TPP-supercharged investment creates more
jobs than there are people to fill them at low wage levels or,
alternatively, the current working age population bulge (the so-called
demographic dividend) becomes too old for factory work.
David Brown
Free-lance writer/researcher
Thomas Jandl thjandl at yahoo.com
Fri Dec 11 14:25:48 PST 2015
Yes and no, Shawn.
TPP has a lengthy implementation schedule. If it were ratified today, full implementation would take 10 years (with all the phase-ins). But of course, the initial benefits will start only once it is ratified, so it is a delay, of course.
On the other hand, while I used to believe in a spring ratification, most people always thought it would happen during the lame duck session in November. Trump's vocal opposition has made things more difficult, and the lame duck session is now more likely.
Some benefits of TPP will still begin to accrue now -- in fact, they have already. Simply in expectation of a TPP, supply industries that make the components for Vietnam's assembly sector have already begun to move to Vietnam. In the last couple of years, some 3 billion dollars have been invested in the textile industry (i.e.: the cloth that goes into apparel). And that is huge, since in clothing, the money, the skilled jobs and the good salaries are not in assembly, but in textile milling, dying etc.
So as long as industries are certain enough that it will eventually happen, the investment benefits are beginning to materialize even before the deal is ratified._________________________________ Thomas Jandl, Ph.D. Non-Resident Scholar Viet Nam National University -- Ha Noi Partner, TJMR Asia Consultants
Thomas Jandl thjandl at yahoo.com
Fri Dec 11 14:32:38 PST 2015
To assess US support, you have to bracket out campaigns.
The Republicans are pro-TPP. Some leaders have changed their tunes, bit that's posturing. Sen. Hatch, for ex., has said he opposes TPP now because US pharmaceutical manufacturers didn't get the extended patent protections they wanted. The industry itself is publicly disappointed, but internally OK with the deal they got. So Hatch uses this to get concessions for his state. I suppose McConnell will do the same: get something out of his sudden opposition for Kentucky. That's exactly the same playbook we saw played out in the run-up to the NAFTA vote.
Hillary Clinton called the TPP the "gold standard" for trade and investment agreements in the 21st century -- now she is opposed. Why? Because she doesn't want Bernie Sanders run away with the union endorsements. As soon as he fades (and he already does), she'll say that she has had the chance to read the final text and is OK with it, but as president she will address this or that to help American workers to adjust ....... Again, classical playbook - see Obama's sudden interest in re-negotiating NAFTA when he ran for president. Once elected ...? You know where this went.
It will most likely happen in the lame duck session. Just like MFN for Vietnam happened in the lame duck session. _________________________________ Thomas Jandl, Ph.D. Non-Resident Scholar Viet Nam National University -- Ha Noi Partner, TJMR Asia Consultants Washington: 443-901-2612 Viet Nam mobile: 0126 558 2026 thjandl at yahoo.com
Ben Quick bnquick74 at gmail.com
Fri Dec 11 14:37:59 PST 2015
David,
How do you think that vote would turn out if it were to happen next week?
Does Obama even have enough support at this point? What will happen to the
TPP in a year, when the likely next President will actually oppose the
deal? I don't think I could have imagined it this time last year but I
think this thing might truly be dead in the water. I think now that the
negative domestic effects of earlier deals like NAFTA have finally become
pretty well accepted across the political spectrum, the American public
doesn't have much stomach for these sort of trade deals, and given time,
politicians eventually do listen to that growl and react. What do you
think?
Ben
Nguyen Quang A anguyenquang at gmail.com
Fri Dec 11 17:31:57 PST 2015
From Vietnam I agree with Joe that, he "would want mechanisms to strengthen the rights and abilities of Vietnamese labour groups and activists to organise themselves, instead of having to appeal to foreign, Western labour groups, in a mechanism that would also surely take a long time to resolve anything".
Thomas Jandl thjandl at yahoo.com
Fri Dec 11 18:43:40 PST 2015
Right. And since it isn't happening without outside pressure, TPP is a mechanism with teeth to make it happen.
And that's the point. In an ideal world, we wouldn't need labor provisions in a trade agreement. But in the real world, we do. And for all those who want more independent labor representation in Vietnam, TPP may not get us there, but it sure will be more likely to get us there than nothing at all._________________________________ Thomas Jandl, Ph.D. Non-Resident Scholar Viet Nam National University -- Ha Noi Partner, TJMR Asia Consultants Washington: 443-901-2612 Viet Nam mobile: 0126 558 2026 thjandl at yahoo.com
B F Dwyer anthrobfd at hotmail.com
Sat Dec 12 01:34:50 PST 2015
Re the comment: This is why I find treating street vendors as separate to workers to be incredibly problematic. Jandl points out that street vendors benefit when the economy does better. I see this as necessary, but not
sufficient – a growing economy does not guarantee sufficient creation of
employment, never mind decent work."
Yes you are right ofcourse that a growing economy doesn't guarantee jobs - for many reasons, but with respect to street vendors I think they are sort of separate - and flexible in the broader sense implied by that term:
I have been wondering about this for a while - not so much in terms of economic theory per se, but in my relationships with people on the ground so to speak. My sense is that when the economy isn't doing well, you get all sorts of street vendoring, taxi driving, prostitution, massage, lottery; delivering, cleaning and laboring going on. Lots more empoyers will employ local people in mundane jobs as well. This is just my observation and not an informed analysis but it seems that as formal job opportunities become restricted - money becomes tighter, people rely on savings/family and so on and instead of going for coffee at cafe tomato, for instance, they sit and drink coffee in the Hem again - gross oversimplification - I know, but you do see this pattern occur time and again: tighter economic conditions 'seemingly' more economic activity in the street.
Also on the "colonial" issue - The U.S. is the biggest player in the field, and I know from the Australian context that if we want access to their markets - and we do, we have negotiate bloody hard to get what we want. For instance, we have accept that U.S. companies can sue our Government if we change wages policy; but Australia won exclusions with policy enacted for health and environment reasons. So we play by their rules for sure - but a lot of concessions are fought for, and gained as well. So I don't see this as colonialism in any sense. Vietnam is like Australia, they want to grow their economy - a trade deal with the U.S. is part of that. So in response to Ben's question, for sure, interests inside the U.S. want 'no deal' for a variety of reasons, I in some contexts I can empathise, but, if the deal falls over, I think the U.S. will be the biggest loser, not Asia or Australia
Brett
B F Dwyer anthrobfd at hotmail.com
Sat Dec 12 02:12:52 PST 2015
Also just one more note with respect to TPP and VG response at carnivale time. Corruption is an issue for sure, as are the ongoing maintenance of worker agreements, but there are other factors much more important - at least in my view. For instance, infrastructure development and skill level will easily undermine the benefits TPP
Brett
Anh Pham gaupvn at gmail.com
Sat Dec 12 02:36:28 PST 2015
I would certainly agree that the goods/services provided by the street
vendors are inferior goods and so as the economy improves and if that also
translates into actual higher income for the people, they would choose to
shift their consumption away from these goods/services making the street
vendors redundant.
One case in point is the flea markets run by Vietnamese and Chinese in the
former Soviet bloc countries. They used to do so well supplying fake jeans
and other low quality garments to then low income eastern European
consumers. As income in these regions improved and as market barriers
disappeared to allow in better quality goods at only slightly higher prices
(at one point availability was so bad fake goods were sold through these
markets at premium prices), the markets have closed en masse pushing their
vendors into more formal activities or retirement in Vietnam. Many of
Vietnam's top rich today started out at or near the level of street vendors
profiteering in the last days of communist Ukraine or Poland. Today they
build massive development projects around Hanoi and Saigon and aspire to
appear on Forbes's lists of the richest.
As income increases, street vendoring does become a sort of luxury goods
for reason other than the goods themselves. The cotton candies and funnel
cakes at county fairs in the US are goods that nowadays one can only buy
from the mobile vendors at the county fairs. As late comers to the USA, we
find a convenient way to tap into this country's collective memory and
nostalgia in buying sugar and fat laden unhealthy food items at the fairs.
We therefore consume more of these goods for memory's sake and not because
we cannot afford higher quality substitutes. Where there is a strong
entrepreneurial tradition at the grassroots level, street vendoring may not
die out completely at higher income levels. US food trucks, Singaporean and
Taiwanese lunch stalls, Thailand's street grillers and fruit cutters may
still operate on the other side of necessity, are in my opinion examples of
how the informal sector survives the income test.
As Vietnam's income rises, a similar pattern may emerge: street vendoring
will disappear for the large part leaving those who remain providing goods
or services that are same same but different. Street barbers may be gone
for good but little tea and coffee stalls may remain streetside for a long
time to come charging ever higher prices as they become rarer.
Anh Pham
Washington DC
joejbbuckley joejbbuckley at gmail.com
Sat Dec 12 03:01:13 PST 2015
Re. Street vendors - they are of course different, but I don't agree that they are 'separate'. My view of informality is that it's a spectrum, and not two different spheres of operation ('formal' and 'informal') as was thought back in the 1970s when people first started to study this stuff properly. The dualist perspective obscures stuff such as the fact that formal jobs are informalising, that people shift between wage labour and self-employment frequently, and that there is a blurred and complex line between self-employment and wage labour (I don't know of any studies of these phenomena in Vietnam, so to take another example - Rizzo notes that urban bus drivers in Tanzania rent their buses daily, and then pay a part of their earnings from fares back to the bus owner. He argues that this is wage labour, but with the investor's risks also shifted onto the labourer.)
Re. echoes of colonialism - I wasn't referring to the trade policy in general, but specifically to the fact that Vietnamese activists/workers will have to try and appeal to American activists and unions to settle disputes.
I think Thomas put his finger on it when he said that this is a trade deal, not a labour deal. I agree, so supporters need to stop trying to sell it as being good for labour. As I note in my blog post, there is no evidence that this is the case, and it may well make things worse.
Joe Berry joetracyberry at gmail.com
Sat Dec 12 04:04:01 PST 2015
As a labor studies person, not a Viet Nam specialist at all, I would say that informal work of all kinds is affected, of course by the general level of the economy, but even more what is happening to wages and unemployment/under-emplyment levels in the formal economy. In other words, what is happening to the economy of the working class, more than the over all economy as measured by GDP or some such. Many people and families add these sorts of ventures to their “day” jobs when their wages prove insufficient and/or when one of the family’s breadwinners is laid off or suffers a wage cut. The growth of “gig economy” in the US and Europe is yet another example of this general tendency and has many similarities with street vending in economies such as VN, or so it seems to me. Therefore, regarding the exact question raised, I would say that many in this informal economy are really underemployed workers who would be in the formally active working class labor force if there were a place for them.
On the trade deals, I would caution that seeing them just in national units (US, VN, Aus) is a mistake. Something could be very good for the business interests in a given country (higher profits) but deleterious to the working class majority in that same country. Many examples from history you can supply yourselves, I am sure.
Joe Berry
Joe Berry & Helena Worthen
Faculty of Labour Relations & Trade Union - Ton Duc Thang University
19 Nguyen Huu Tho Street, Tan Phong Ward, District 7, Hochiminh City, Vietnam
0935002920 (phone in case the postman want to contact)
Thomas Jandl thjandl at yahoo.com
Mon Dec 14 08:30:45 PST 2015
Joe,
while we agree, I have to contextualize here. You write: "I think Thomas put his finger on it when he said that this is a trade deal, not a labour deal. I agree, so supporters need to stop trying to sell it as being good for labour. As I note in my blog post, there is no evidence that this is the case, and it may well make things worse."
I don't think it's fair to blame the supporters of TPP to bring labor into the equation. TPP is a trade and investment agreement -- proponents have always sold it as that. Two reasons why labor has become part of it: (1) Unions in the United States (and probably other high-wage countries) oppose trade agreements with the argument that low environmental and labor standards represent an unfair advantage, hence to pass a(ny) trade agreement, we nowadays need to address labor and environmental concerns; and (2) opponents of TPP have argued that whatever the trade and investment benefits may be, regular Vietnamese will suffer (you read it right here at the outset of the "is TPP good or bad for Vietnam" thread).
So I think you can't blame supporters of TPP to "sell" the labor agreements, or for pointing out that (a) TPP is not necessarily bad for labor, and may even have some rather positive impacts, and (b) it is not a labor agreement, so opponents shouldn't throw every labor problem at supporters.
On the issue of informal labor, as a medium-old Vietnam hand (a regular since 1997), I can only confirm that "informal labor" is declining massively as the forma economy grows." I remember the people crouching at every street corner with a wash basin and a pump fixing or simply pumping air into bike tires for 500 dong -- or 300, but I really didn't want to negotiate. And I recall the times when virtually all food you bought was sold by street vendors. And most of the food you consumed was cooked by people on gas cookers and plastic chairs in the sidewalk. A growing economy provides alternatives and thus reduces the number of street vendors. It also gives people working in backyard shops a marginally better bargaining position. (RE sidewalk "restaurants" I should point out that in Vietnam, working for KFC or a Pho chain restaurant is a prestigious job, exactly because it gives you a salary, benefits, a uniform, a clean, cool and safe workplace etc. All the young people "flipping burgers" see this as a move up the ladder, and thank Vietnam's economic changes for it. We look at these processes of change much too much through our own lenses.)
But again, I am certainly not making the case that this a direct goal of TPP's labor provisions. It is, however, a known side effect of economic growth. _________________________________ Thomas Jandl, Ph.D. Non-Resident Scholar Viet Nam National University -- Ha Noi Partner, TJMR Asia Consultants Washington: 443-901-2612 Viet Nam mobile: 0126 558 2026 thjandl at yahoo.com