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Salary of Vietnam’s public servants only meets 50% of living standards

Thursday, October 13, 2016, 16:28 GMT+7

Outdated wage policy was named a primary cause of bureaucratic corruption in Vietnam by experts at a conference on wage reform in Hanoi on Wednesday, local daily Thanh Nien (Young People) reported.

The conference, themed ‘The context and potentials for wage reform,' was held by the Ministry of Home Affairs to discuss solutions for substandard public salaries in the country.

In Vietnam, the monthly salaries of public servants are calculated by multiplying a fixed base salary stipulated by the government with a varying ‘salary coefficient’ dependent on an individual’s seniority and position in office.

Between 2008 and 2016, despite Vietnam’s base salary having been raised from VND540,000 (US$24.11) to VND1.21 million ($54), wage increases have been unstable, with periods of continuous growth and others of stagnation, Prof. Tran Xuan Cau from Hanoi-based National Economics University (NEU) said at the conference.

The professor also pointed out irrationalities in the fact that most public servants in the country pay little attention to the changes in their salary although such changes are supposed to have a direct impact on their lives.

“In reality, rich officials and public servants are not needles in a haystack, and they couldn’t care less about a raise in their base salary,” Prof. Cau was quoted by Thanh Nien as saying. “This only proves that there’s something very wrong with Vietnam’s current wage policy."

According to former Deputy Minister of Home Affairs Thang Van Phuc, the current salary level for public servants only meets 50-60 percent of their living standards, a sum that is neither enough to regenerate working capacity nor reflect the real value of their labor.

“The decrease in a public servant’s social values results in reduced performance and creates fertile conditions for corruption to supplant itself and become an obstacle in the country’s path to development,” Phuc explained.

The former deputy minister’s view on the issue was echoed by Tran Dinh Thao, a lecturer at the Hanoi University of Home Affairs, who added that substandard wages have led to public servants relying on outside sources of income that fall outside the scope of government regulations.

Up to 79 percent of Vietnamese public servants have non-salary incomes or other allowances, according to a 2012 study conducted by the Government Inspectorate.

Citing the study result, Dr. Le Hong Huyen, director at the Social Affairs Department under the Party’s Central Economic Committee, said such unregulated incomes meant a large sum of personal income tax is also being overlooked.

Suggesting a solution to the problem, Dr. Huyen recommended implementing a market mechanism in providing public services, meaning the cost for paying public servants would be included in the price of public services.

According to the director, introducing market prices for public services would help public non-business units make up for the costs of operation and increase salary for public servants, which would in turn reduce bureaucracy and corruption.

Soon, Vietnam will introduce two different wage policies for public servants and civil servants instead of using a single pay scale for all public sector workers.

“Public servants are those who carry out public work in the name of the public power. This is different from civil servants in the sense that civil servants work in public units that require specialized profession in such fields as healthcare, education, science, culture, arts, and sports,” Deputy Minister of Home Affairs Tran Anh Tuan said at the conference.

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