HANOI -- In Vietnam, there is a growing number of jobless university graduates: as many as 192,500, or 15% of the country's unemployed, according to the General Statistics Office. Despite high education levels and a growing pool of talent, those with college degrees are often stuck without jobs due to structural problems.
First, the Vietnamese economy is dependent on foreign capital, which is attracted to the country's low-wage workforce. South Korea's Samsung Electronics, for instance, employs 110,000 people at its factories in Thai Nguyen and Bac Ninh provinces. Most of them are blue-collar workers, and only a fraction has a university degree. Excess dependence on foreign capital has hampered the growth of domestic industry, and an increasing number of university graduates are now toiling at such factories.
Second, business is concentrated in two locations -- Hanoi and Ho Chi Minh City. Big companies are mostly in those cities, and few major names are based in the third-largest city of Danang, where the average monthly pay is about $300, or 20-30% lower than that in Hanoi or Ho Chi Minh City. Vietnam's 63 specially designated cities and provinces are making, in principle, separate efforts to lure foreign capital, resulting in a lack of balance in the distribution of industries.
On the positive side, though, Vietnam's educational level is rising. With the number of universities increasing every year, the number of graduates has gone up by 40% from 2010, to 4.42 million in 2015. Many schools are so enthusiastic about teaching that the government had to ban homework in elementary schools.
Vietnam's economy has been expanding at around 7% a year, one of the fastest in Southeast Asia. If the Trans-Pacific Partnership free trade agreement eventually takes effect, it will provide a tailwind for the economy. Nurturing domestic industry and attracting foreign capital to places outside the two major cities would improve employment among university graduates. An economy that does not benefit its own people will not endure.