Vietnam: Education Law and Economic Growth


Associate Professor Binh Tran-Nam

Vietnam's National Assembly passed the Education Law for the first time in April 1997. After much public discussion, debate and anticipation, the amended Education Law was ratified on 20 May 2005 with effect on 1 January 2006. The amendments, approved by less than 72 per cent of representatives, were disappointingly small in number and relatively trivial in nature. The main changes were: (i) the adoption of one national textbook for each education program, and (ii) the abolition of the Graduation Examination at the end of junior secondary school (Year 9). The Standing Committee of the National Assembly also indicated that it would take many years to perfect Vietnam's education law.

This reflects the current status of play in Vietnam. From the public viewpoint, there is an increasing need for widespread (sometimes radical) and urgent changes in the education sector. From the government's perspective, education policy must be an integral part of wider socio-economic policy. Since socio-economic reform in Vietnam has been gradual and piecemeal, education changes must accordingly be incremental. In other words, the nature and speed of education reform is not a choice, but is constrained by the government's approach to broader socio-economic policy objectives. This has frustrated the public, particularly those university professors who have been calling for immediate action.

The pace of education reform has slowed down in Vietnam after a promising start in the early 1990s when the 1992 constitution reaffirmed education as a top priority, and public spending on education as a percentage of GDP increased substantially in 1993. As a result, Vietnam's achievements in education have not matched its achievements in the economic sphere. A clear evidence of this is the decline of the difference in Vietnam's human development index ranking and its economic development (purchasing power parity GDP per capita) ranking. In 1994, this difference was at least 25. In 2002, this difference was a mere 12.

Examining more closely, this is partly due to the decline in the enrolment ratio of primary students in Vietnam. According to official data released by the Ministry of Education and Training, the total number of primary students in Vietnam declined annually from over 10.1 million 1999-2000 to 8.4 million in 2003-04. After adjusting for the decline in birth rate in recent years, the net result is a steady reduction in the enrolment ratio of primary students. This reduction, mainly attributable to school fees, affects low-income households disproportionately. It raises an equity issue about access to basic education, and contradicts the 1991 Law on Primary Education Proliferation, which reaffirmed the role and responsibility of the government in providing universal primary education to Vietnamese children.

In the last few years, the slowdown in FDI and grow rates (compared with those in the early 1990s), together with rapid regional integration, have focused the attention of both the public and policy makers on education as a process of human capital development. The catchy phrase 'socialization of education' has become increasingly used in public, despite its unclear meaning. Market privatization and international integration have revealed many weaknesses and challenges facing the Vietnamese education sector. Some of the broad issues and potential solutions will now be briefly mentioned.

It is clear that there is an excess demand for education, particularly at the post-secondary level. Since public funding is insufficient to satisfy public demand, the government should establish a more viable framework to encourage the role of the private sector (including foreign investors), especially not-for-profit organizations, in education, particularly at the tertiary level. This would allow the government to devote more of its limited resources to providing 'freer' education to primary students. A desirable associated development would be income tax reform aimed at collecting more taxes from high-income households. This would not only increase the amount of resources available for public education, but also minimize the effect of the implicit bias in education which favours higher-income families.

In terms of outcomes, the education sector should aim at producing graduates who can easily adapt and respond to a rapidly changing society. Unlike the previous generation of graduates who mainly served in public institutions, the new generation of graduates must possess a range of technical skills to work effectively in the public sector as well as the private sector. It is important to ensure that outcomes of the education system are broadly compatible with the demand for skilled and unskilled labour of the economy. But graduates need to possess more than just up-to-date technical knowledge and skills. The education system should also aim to nurture a new generation of entrepreneurs, the agents of change, who will contribute to Vietnam's market economy through a process of destructive creation. This calls for radical changes in teaching methods as well as learning culture.

To summarize, the challenges facing Vietnam's education sector are massive and urgent. Better outcomes in this sector can only be achieved through the leadership's determination and the public's sacrifice.

WATCHPOINT: How the government reacts to the current calls from educational experts for changes will shape the direction of education reform in Vietnam for the rest of this decade.


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