Q: Vietnam has an impressive growth story - moving from a poor, post-war country to one of the fastest growing markets in 25 years. What have been some of the drivers behind this success?

A: Yes, our economic growth in the last 25 years is remarkable. However, our neighbours such as China or Indonesia also grew very fast. So, on one hand, you could say our fast growth is usual, but on the other hand, it is unusual as well.

We had both demand and supply acting as driving forces behind our growth. Demand means not just the domestic demand but also export, or foreign demand. Without this foreign demand we could not have pushed the economy to grow this quickly. To illustrate, for the last 10 years, Vietnam’s GDP on average was US$60 billion while world economy was valued at US$60,000 billion. Our economy was only equal to 0.1% of the world economy. Our export ($96 billion) was 75% of Vietnam’s GDP last year. Therefore, if we don’t take on the world demand, there will be no real driving force for our economy.

On the supply side, it is about having enough of a qualified workforce, capital and appropriate technology for development. We don’t have both capital and technology on our side, but foreign investors will bring them in. Therefore, as long as you have the right policies, not only can you mobilise local resources, but you can also attract foreign ones.

The third pillar is macroeconomic stability. This concerns managing exchange rates, inflation, reserves and so on. It is not easy. In fact, among the pillars, managing macroeconomic stability is the most difficult one. At times, we are not at all happy with the high inflation in Vietnam, but we are working on a long-term solution for this as well.

The fourth pillar, somewhat unique to Vietnam, is social stability. For social stability, at least four components are crucial: poverty reduction (a family is in poverty when each family member earns less than USD 24 per month), healthcare, education and family development. Through National Program on Poverty Reduction since 1990’s, the poverty ratio went down from nearly 60% then to 12% last year. With a law on health insurance and government support for the poor, more than 63% of population have had health insurance.

Education has always been a high priority both in government policy and family tradition in Vietnam. After the war, we needed 25 years to implement compulsory nationwide completion of primary school education. It took us 25 years just to get all the kids to go to primary school! It was achieved in the year 2000. We then set another target – nationwide completion of lower-secondary school education. It took us 10 years to achieve that target. Now we are in the third phase, which requires all kids of five years of age to attend kindergarten. We want to accomplish this target within five years. Today, more than 55% of high school graduates study at colleges and universities.

Last but not least, we believe that family is very important. We have a tradition of respecting our ancestors and our roots as well as enjoying family life. Vietnam has the second lowest divorce rate in the world. For the last 10 years, we have had a family development strategy and now we are working on the next phase. In this programme, we aim to have appropriate population growth. We have now stabilised at 1% growth and roughly two-thirds of the population is of working age. Two people work to feed one dependent person, who is either a child or a retired person. This appropriate growth of population and workforce is very important to Vietnam because a sustainable development is not based on just enterprise competitiveness, but also on human sustainability.

These are the four reasons why we have enjoyed such growth in the past. With a similar philosophy, I believe we can maintain the growth for some decades more. 

Q: Companies in the region are saying that the educational systems are not evolving fast enough to meet the needs of the 21st century. As former Minister of Training and Education, and the current Deputy Chairman of the National Council for Education and Human Capital Development, can you tell us how Vietnam has sought to adapt its education system?

A: Well, the quality of education is always a debatable topic. Investors who go to Vietnam will always find good people to do business with — otherwise they would not go to Vietnam. However, at our National Assembly, people always complain about the quality of our education. Being the Minister of Education, I had to respond to them. The truth is, we were badly affected by the war. There was no real school system when we gained our independence and reunification in 1975. In 2006, which was 31 years after the war, roughly half of all Vietnamese schools were still temporary ones and needed major upgrading of facilities. Similarly, at the university level, only 15 per cent of the university faculty had PhD degrees then, which is a very low standard internationally.

Those difficulties cannot be solved within a few years. We started to build new schools and upgrade school facilities funded by government bonds six years ago. We also started a programme, the so-called “20,000 PhDs”, in which 10,000 people will receive PhD education domestically and 10,000 people will receive PhD studies overseas. We target that by 2020, roughly 25% of our faculty will have PhD degrees. But even then, 25% is still very low compared with Singapore or other developed nations.

We also focus on strengthening the quality of school principals. They are the ones who motivate other teachers. This is an area where we worked together with Singapore. Exactly six years ago, jointly with Mr Tharman Shanmugaratnam (Singapore’s former Minister of Education and now Deputy Prime Minister), we started a Centre of Excellence for Education in Vietnam. This centre had only one task: to retrain all of Vietnam’s principals. The key message was that they should consider school management as a distinct profession. To succeed, you have to follow the rules which have been recognised by Singapore and elsewhere in the world. Being a good teacher is not enough to become a good principal. You have to be trained for this important job.

We localised this Singapore’s training programme and also sent people to Singapore to be trained as professional trainers. Vietnam has 30,000 schools. Within the three years from 2008 to 2010, we trained 28,000 principals. That meant that more than 95 per cent of Vietnamese principals were trained with this Singaporean programme.

We also would like to provide better quality training for working people. We need a triangle of cooperation that includes training institutions, enterprises and the government. This triangle of cooperation is crucial to improve quality quickly. We started this strategy only three years ago. At that time, we were working with a German company in Vietnam to apply a German training curriculum in Vietnamese institutions. This company would take all graduates from that programme to have them work at their office for real world experience. In the long term, we want to apply similar programmes with Japanese companies, and later with Korean ones as well. 

To achieve top quality education, we are also working with the German and French governments to establish two new universities, which use the German and French curriculum respectively. For each university, we have 30 universities from either France or Germany to work with us. We also received 180 million US dollars from the World Bank and the Asian Development Bank for each university. Currently, 80% of the staff is German and French, but we intend to reverse the ratio in the next 10 years: 80% should be Vietnamese instructors and the remaining as German and French. The students study in English and learn either German or French. Through this, we are forced to provide faster and better quality education for our people.   

Q: The Vietnamese workforce is recognised to be young, bright, and eager to learn. Yet the talent pool is inadequate to meet the growing demands of the economy. What advice would you give companies in Vietnam to help them better develop their talent pool?

A: In 2001, when I was the First Mayor in Ho Chi Minh city, the Intel research group approached me for advice on whether Vietnam is a good location for their assembly line and chip-manufacturing project. I was asked three questions:

1) How safe is it to live in Vietnam?

2) What is the crime rate, and

3) If a fire breaks out, how long do you have to wait until the fire truck arrives? They had asked questions about safety and not about human capability.

In 2008, as they begin to build their factory in Vietnam, they asked us where they could find chip designers and chip engineers. We’d never had chip manufacturers in Vietnam hence we didn’t have a chip design curriculum in our universities. So this was a ‘chicken and egg’ question – with no chip industry, therefore no engineers for chip industry. Intel and us then worked together to find a solution. They took some of our second year students from our four best universities and sent them to Seattle for their last two years of their university education. After two years, we received 20 engineers from the United States, and to our surprise, 90% of all their grades were A’s. That meant they satisfied all of the requirements of the US universities. Now they are working for Intel. In addition, Intel worked with four Vietnamese universities to introduce a new chip design curriculum and provide training software.

Today, Intel is satisfied with the Vietnamese workforce working for them. The lesson is that, if they had told us this requirement not just three years before the operation commenced but five to six years prior, it would have been much easier. Our recommendation to investors is if you want to invest in Vietnam, have your human resource planning done in advance. Work with us from the start so that we can find local training institutions to partner with you according to your curriculum and your needs. I believe if we start in time, we will be able to get the right workers and managers in time for you.

A: I’d never planned what I wanted to be or do in my life. Things just happened this way.

There are some advantages to being a professor. You already have some basic knowledge in your field, in my case it was economics. You can then move on to work in the public administration if needed. Secondly, you get into the habit of asking the right questions, organising research, and finding solutions for any problems you identify. Thirdly, you also have the habit of learning continuously. These advantages are also relevant for politicians.

There are in fact more advantages to being a professor than being a politician! As a researcher — you can pick any topic to do research on — as long as you believe they are good topics. Politicians do not have this freedom. You have to identify areas to manage and solve problems that the society demands for, not because you would like to. Analysing and finding the critical and key areas to work on have become the driving force during my term as Minister.

Also, problem identification works differently for both occupations. You cannot make a policy decision if you cannot find the real life examples to prove your solution. Therefore, you have to go out to the street and talk to people, or go to the fields and talk to farmers, or go to the enterprise and talk to managers and employees. These will help you to identify the missing pieces of the solution. Only when you have both the theory plus the practical examples can you find real solutions. The next step you have to do is to convince people working with you that this task is feasible. I think this process is good.

Overall, I think professors have easier lives. The life of politicians, it’s very tough. And yes, the leadership style has to change too. In Asian culture, if you are a teacher or a professor, the students will always believe you are right. This is not so when you are a politician – it’s the people that are always right. Only when people accept your solution, can you start to be sure you are on the right track. As such, you will have to change your position from telling others what to do, to listening to others telling you what to do. This is the only way to be successful as a politician.

Q: From your own perspective, what is a key paradigm shift you see occuring?

A: I think the paradigm shift is the move from “productivity-oriented growth” toward “productivity-and-happiness oriented growth”.

It may sound strange. However, think about it, productivity is a tool while happiness is a target. If people are not happy, you cannot sustain growth. Productivity is important, but not the only foundation of growth. Productivity also relates to competition and economics while happiness is the social aspect. There is no market for happiness. Being poor is not good and in the long term does not bring you happiness, but being rich does not mean you are happy either. By the way, our ancestors were very poor, but generally somehow happy. Listen to the folk songs and watch the traditional dances, you will understand.

I am not sure whether this is correct but this is my opinion that there is a shift from ‘one-legged’ growth to ‘two-legged’ growth: Productivity and happiness.  

This article was first published in HQ Asia (Print) Issue 04 (2012).