Informal Sector Statistics VIET NAM Informal Sector Statistics Informal Sector Statistics Training Bangkok, Thailand | 14-15 November 2017

Outline of presentation Definition of informal sector Status of the informal sector in your country Country policies for informal sector Current statistics being produced What data sources do you collect? National Accounts and the informal sector Country specific issues in statistics Development plans How development partners can help

Definitions . General Statistics Office of Vietnam has not taken into account the informal economy sector independently, but measured and published the informal labor (labor having informal works). The united methodology of informal economy sector has not been available yet. Promotion policies for informal sector mainly focus on individual sector. Policy perspective Informal labour is identified as labour who have informal works. Informal work is defined that all works which are not contributed to Social Security, not ensured by contracts (for works implemented more than 3 months). In Vietnam, almost all works in informal economy sector are considered informal work.

Definitions . Statistical definitions: Statistical Studies identified that establishments which do not have legal entity, produce at least 1 product or service for sale or exchanging, do not register or have no business permit license and are not classified into agriculture, forestry and fishery industry are considered informal establishments and classified into informal sector. SNA definitions: including observed informal economy sector and non-observed informal economy sector.

Definitions . Observed informal economy sector includes establishments which produce at least 1 product or service for sale or exchanging, not classified into Agriculture, forestry and fishery industry, have small scale, do not register, have no legal entity, can not separate capital/asset, labour and expense between enterprises and individual ownership; collected data from the statistic survey program; but measured into national accounts Non-observed informal economy sector includes establishments which produce at least 1 product or service for sale or exchanging, not classified into Agriculture, forestry and fishery industry, have small scale, do not register, have no legal entity, can not separate capital/asset, labour and expense between enterprises and individual ownership; out of the statistic survey program; but have not yet measured into national accounts

Status of informal sector statistics Working labor by employment status 2014-2016 Employment Number (1000 người) Share 2014 2015 2016 Total labor 52744,5 52840 53302,8   Formal labor 11789,8 12553 13470,8 22,35 23,76 25,27 Informal labor 16829,1 17534,2 18018,4 31,91 33,18 33,80 Labor in Agriculture, forestry and fishery industry 24042 22716 21807,1 45,58 42,99 40,91 Other (Not specified) 83,7 36,8 6,5 0,16 0,07 0,01

Status of informal sector statistics Nature of informal labor in Vietnam Having a large share of total, and show the increasing trend in both urban and rural areas Concentrating mostly in rural area Having less equipped technologies and working skills or others professional skills Informal labor (excluding in Agriculture, Forestry and Fishery industry) concentrate mainly on Activities of households as employers (account for about 99%), Construction (over 90%), Accommodation and food service activities (over 80%), Other activities (over 83%), Trade (over 70%), and Transportation (over 65%). The group age of 25-49 has a large of informal labor by ages

Status of informal sector statistics SDG 8 & 10 – indicator status 8.5.1 Average hourly earnings of female and male employees, by occupation, age and persons with disabilities: has not conducted yet 8.5.2 Unemployment rate, by sex, age and persons with disabilities: average monthly data and could not be classified by persons with disabilities 10.4.1 Labor share of GDP, comprising wages and social protection transfers: This data has not been regularly collected yet, it is calculated every 5 years

Status of informal sector statistics SNA has measured observed informal economy sector together with formal economy sector. The observed informal economy sector is only obtained relatively by separating the individual sector from the official formal sector Value added by individual sector 2014-2016   Value added at current price (Thousand bill VNĐ) Share 2014 2015 2016 Total Value added 3.542 3.773 4.051 100 Individual sector (including Agriculture, Forestry and Fishery industry) 1.241 1.314 1.370 35,02 34,82 33,83 Estimated individual sector excluding Agriculture, Forestry and Fishery industry 585 594 612 16,52 15,75 15,10

Country polices The Government issues and implements supporting policies to promote the development of informal sector, such as: Loosening and limiting the regulations on administrative procedures for incorporated enterprises. Encouraging individual households establishment and individual establishments to change their individual business model to enterprise business model in order to look for more opportunities of expanding market and developing to the overseas, then increase their production. Tax reduction, tax delay policies applied for incorporated enterprises and individual establishments which are new comers or facing to difficulties in production. The Ministry of Industry and Trade increases its research and development on market through organizing domestic and overseas exhibition fairs for handicraft products and traditional craft village products to help incorporated enterprises, individual establishments and craft villages to expand the their market.

Data sources Annual enterprise surveys + Survey all enterprises which have more than 10 employees + Sample surveys are done for enterprises which has less than 10 employees based on the list of all enterprises less than 10 employees, then extrapolate for total. Annual establishment surveys + Economic establishment census implemented every 5 year surveys all establishments in Vietnam + Survey with the sample frame basing on the list of all establishment in industry, trade and services which is set up every 2 year between the next 2 economic establishment censuses; then extrapolate for total. Vietnam living standard surveys every 2 year s

National Accounts SNA has not measured informal economy sector independently and officially. Individual sector (excluding Agriculture, Forestry and Fishery industry) is considered to classified in informal sector. Individual sector appear in almost all industries, except for Activities of Communist Party, Social political organizations, public administration and defense; compulsory security In enterprise sector, incorporated enterprises are identified as informal sector but its data can not be separated from that of the enterprise sector.

Issues Obtaining the standardized definition of informal sector for Vietnam Identifying the coverage of informal sector Improving and adding data resources Non-operating of interviewees in surveys Controlling and monitoring the step of listing establishments Lack of information to fulfill SDG indicators as commitment

Development plans for NSO Plans to develop and enhance informal sector statistics Being aware of the importance of informal sector, the Government required General Statistics Office set up the Project “Statistics on Non-observed Economy“ which is expected to implement in 2018. Please rank the priorities for the development of informal sector statistics

Development plans for NSO The priorities for the development of informal sector statistics Researching and formulating the entire system of theory, i.e, definition, methodologies, information resources and time series based on international recommendation Constructing, standardizing and synchronizing the data resources for compiling the outputs of informal sector. Training, improving capacity of GSO’s staff on the informal sector Researching, installing information needed into the available surveys. Doing surveys to collect data on informal sector Processing and integrating data from surveys Measuring indicators for the informal sector.

Development partners Propose the technical assistance from development partners to measure the Informal Economy Sector in Vietnam

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